RISA on Defensive after Former Director Pleads Guilty

August 26, 2017

The board of the Roosevelt Island Senior Association (RISA) has found itself on the defensive following a guilty plea to larceny charges by its former program director, Rema Townsend, who admitted stealing money from the non-profit’s coffers.

 

 Former RISA Director Rema Townsend speaking at a 2015 public purpose fund meeting. Image from Roosevelt Islander

 

One of the most vocal critics has been Michael Shinozaki of the Roosevelt Island Operating Corporation (RIOC) Board. At the board’s August meeting, he brought a motion to withhold Public Purpose funds previously awarded to the group, “given the revelations and charges and other issues.” Had it passed, the motion would have stripped RISA of approximately $12,000 in public purpose funds awarded in May.

 

Shinozaki accused current RISA President Barbara Parker of lying to the RIOC Board about the existence of an investigation against her, and he accused her of overpaying herself as an instructor and approving her own paychecks, in violation of IRS guidelines. Shinozaki would not speak to us; neither would other former RISA board members who might have knowledge of this activity.

 

Current RISA board members say they have no knowledge of any such investigation. RISA Secretary Sherie Helstien said, “They [the authorities] have come to none of us. None of us were interviewed. We were not questioned. We don’t know if there is another investigation. We don’t know that there isn’t.”

 

RIOC General Counsel Jacqueline Flug said she has no knowledge of another investigation and affirmed that, as far as the District Attorney’s office is concerned, the investigation is closed and there are no other open investigations. (The Department of Investigation [DOI], which referred the case against Townsend to the DA’s office, would not confirm or deny that there are other investigations pending.)

 

After heated discussion, the motion by Shinozaki was ultimately voted down by the rest of the Board.

 

Conflict of Interest?

 

Responding to Shinozaki’s allegations, Parker says she was paid $40 per class under the previous RISA board for teaching zumba, and that the former RISA board approved her teaching while also serving as a board member. At an April 3, 2015 RISA meeting, chaired by former RISA Vice President Wendy Hersh, Hersh addressed the issue, saying, “We all voted, and agreed, it is not a conflict of interest.” (Parker provided audio of the meeting.)

 

Parker also points out that she couldn’t have “paid herself” because she didn’t have signatory authority at that time. Under the prior board, checks had to be signed and approved by former RISA Treasurer Bubu Arya and former RISA President Dolores Green. The duty fell  to Hersh, then vice president, when Green became ill in 2016.

 

In one of those bureaucratic structural oddities, RISA effectively operated under two identities during the time it received support from the City Department for the Aging (DFTA). As a Roosevelt Island membership organization, officers received no pay. In its separate role as DFTA’s effective operating arm on the Island, it paid teachers, including Parker, who received no compensation as a RISA officer.

 

“I was not the secretary at the time I started teaching the zumba fitness classes at RISA,” Parker said, “but I was on the board. There was no issue regarding any conflict of interest when I started teaching.” A year later however, Arya, the treasurer raised the issue as a possible conflict of interest.

 

Parker added, “When the issue was brought up again, we consulted a lawyer for verification.” Parker has the memorandum RISA lawyer Stanley Chinitz prepared, in which he advised RISA to modify its bylaws to read, “All Directors and Officers of RISA shall serve without compensation by RISA in any form.” He wrote, “RISA and you will both be best served – and the organization will comply with New York law, if RISA adopts a Conflicts of Interest Policy and you disclose in writing what the Board already knows – that you are employed on a part-time basis as an instructor, paid by the DOA (Department of the Aging, now known as DFTA).” Therefore under the proposed bylaw modification, Parker could not be paid by RISA, but could be by DFTA, which is how she was being paid.

 

Ultimately, the group never formally adopted a policy on conflicts of interest.

 

Criminal Charges

 

At the August RIOC board meeting, Flug confirmed Rema Townsend’s guilty plea to one felony charge and one misdemeanor charge. She said the charges stemmed from money paid to RISA by DFTA. Apparently, RIOC granted Public Purpose funds to RISA in 2014 and they were used to purchase a refrigerator, a stove, and some painting services. In 2016 Townsend applied to DFTA to cover those same expenses – refrigerator, stove, and painting.

 

Flug explained that the other criminal charge was for payments to an Arnold Williams, now known to be the father of Townsend’s child. Those checks went into Townsend’s bank account. Williams was not known to have ever done work for RISA.

 

New RISA

 

The WIRE asked current RISA board members Barbara Parker, Sherie Helstien, Marie Luarca-Reyes, Lorraine Altman, and Donna Chenkin to discuss the allegations Shinozaki made at the RIOC meeting.

 

Luarca-Reyes, RISA’s treasurer, said her initial goal was to get the finances in order to prevent the organization from going into default. She started her forensic accounting by reconstructing whatever was available in terms of bank statements. She affirmed that the bank account was her only source of information as to the group’s finances, but “that didn’t look like everything.” She said, “Amounts were sort of questionable in terms of, ‘Are these all supplies?’” She credited former RISA Vice President Hersh with leading her to online account access. She said she began her reconnaissance mission with the June 2016 statement.

 

In preparing that year’s 1099 payment reports, required by the IRS for payments to consultants, Luarca-Reyes noted that there was neither an address nor social security number on file for Arnold Williams. She said, “We sent out the 1099 to people who we had addresses for. We have to enter social security numbers onto the 1099. We didn’t know who Arnold Williams was –could never establish who the person was.”

 

Parker said, “We were not aware of this A. Williams until we investigated further by getting the bank statements of the DFTA account.” (The group had two bank accounts: one, a RISA account where membership fees went; the other was called “the DFTA account,” even though Public Purpose grant funds were also kept there, in violation of DFTA requirements.)

 

“He [Williams] was paid from the DFTA account. Once we accumulated the bank statements, we accumulated the cancelled checks from A. Williams and started asking questions. I called Annie, who had been the caseworker [under the former board]. She had no clue. I had no contact with Rema at that point, and didn’t want to. We had no clue who this was being paid to until we got those bank statements.” (Luarca-Reyes’ resume includes 24 years as a financial controller for Citibank, and in doing budget planning for foundations.)

 

Two Accounts

 

Noting that DFTA (City) money and Public Purpose (RIOC) funds were commingled in one account, Luarca-Reyes said, “A separate account for DFTA money is a requirement. The Public Purpose funds should never have been commingled [with funds from DFTA].”

 

Parker suggested that funds were commingled because, “the [RISA] board did not write the grant; [Townsend] did. For years, RISA trusted [her] to write the grant [proposal] on behalf of RISA. She was the one who set up the meetings with Sean [Singh, Grant Writer for RIOC].” Parker added that there have always been two kinds of memberships at the Senior Center. DFTA membership, the one Carter Burden Networks has now, she says, “is your 9-5 membership. RISA was a separate membership.”

 

Under this structure, DFTA-sponsored programs are free to all seniors. Under the paid RISA membership, that organization ran parties, fashion shows, and other events.

 

Townsend

 

“The board that goes back 13-14 years ago, that board then hired [Townsend] to handle the grants, handle the DFTA money,” explained Parker. “That’s what they interviewed and hired her for. They turned all of their finances over to her.”

 

Not only that, but former RISA president Dolores Green gave Townsend permission to sign Green’s name on checks. (Parker pointed out that this permission predated her involvement: “By the time I came on the board it was an official practice. It was a done deal. So I didn’t know what resolutions [had been passed] prior, or how it was done.”

 

Of Townsend, Department of Investigations Commissioner Mark G. Peters said, “This defendant siphoned thousands of dollars from a City-funded senior center steadily over time, slowly robbing both the City and Roosevelt Island’s senior community who rely on the center’s programs and services every day. DOI will continue to bring cases in which an individual’s self-indulgence results in the theft of essential City funds and services.”

 

Signing Checks

 

Parker said that, in May, 2016, DFTA called a meeting attended by Arya, Hersh, and herself. “DFTA called this meeting in reference to a letter served to us with questions about Townsend.”

 

Parker recalls that the meeting was also attended by “five commissioners, one an attorney. They wanted our input regarding Townsend’s oversight and information they had heard in terms of her handling the DFTA accounts.”

 

According to Parker, “Buba Arya made it very clear that every time she left to go to India, she’d sign 50 blank checks. The commissioner said, ‘You have to stop because it’s not legal.’ That’s when I said that Green gave Townsend permission, in writing. The lawyer said, ‘Well it’s not really legal unless she did it with power of attorney and [had it] notarized.’”

 

Parker believes that Arya, who refused to comment for this report, should have been more responsible. She said, “[Arya] really should have been overseeing and questioning the validity of any checks she was putting her name to. She was aware that Green gave Townsend permission to sign her name. It was common practice. But the checks that Arya signed in advance, she never questioned.”

 

In the recording of the April 3, 2015 RISA board meeting, the board is heard discussing Townsend’s control of the money at the exclusion of the board. Parker is heard advising Arya to take back control: “You can complain all you want, but if you don’t step in to do it, it will never happen.” Arya responds, “We can’t do it.”

 

The WIRE reached out to Arya. She said she has moved on and declined to comment.

 

Loss of Sponsorship

 

Vice President Chenkin, who has served on the board for one year, but says it “feels like eternity,” says she was not surprised when RISA lost the Senior Center sponsorship. “We always understood why the contract was taken away.” Parker remembers that period as “so convoluted and crazy. People kept saying, ‘How could RISA let this happen?’ Well, you have to look at the leadership. It wasn’t a strong leadership.”

 

Parker said that, in May, the DFTA commissioners informed RISA that, when the contract with RISA ended, they would be bringing in a new sponsor. She says that she and her fellow board members were relieved.

 

Suzanne Myklebust, Deputy Director of Public Affairs for DFTA, summed up DFTA’s version of events in a statement, “DFTA followed up on complaints as they were received and took appropriate actions, including site visits, meeting with representatives of RISA’s Board of Directors, and making a referral to DOI. Lacking confidence in the Board’s ability to properly manage the center, DFTA determined it was in the best interests of the City to move forward with a different provider and not exercise a renewal of RISA’s contract.”

 

The result was that, as of July 1, 2016, the Carter Burden Network (CBN) won sponsorship of the Center. The relationship between the CBN and RISA has not always been easy. 

 

Looking ahead, the RISA board is optimistic. Parker believes, “Two organizations can do  so much for this community. This is what we want to do moving forward.” Chenkin seconds that desire, “We want to move positively ahead. We are not going to linger in negativity.”

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