Crime & Mayhem

Husband and Wife Accused of Taking $1 Million in Non-Profit Fraud Case

February 3, 2016 7:22pm | Updated February 3, 2016 7:22pm
Insaidoo and his wife Roxanna Pearson are accused of taking nearly $1 million in taxpayer dollars meant to feed seniors to pay for their mortgage, bills and a luxury car, according to the U.S. Attorney.
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NEW YORK CITY — The executive director of a non-profit that feeds seniors and his wife embezzled almost $1 million in taxpayer money to pay the mortgage of their four-bedroom Long Island home and their bills as well as buy a luxury car, according to federal prosecutors.

Kwame Insaidoo, the executive director of United Block Association misappropriated funds by transferring them from the non-profit to another bank account and writing checks to a shell corporation he controlled with his wife Roxanna Pearson, according to the city's Department of Investigation.

Additionally, Pearson worked as a consultant for UBA until 2012 but kept receiving over a hundred thousand dollars in funds from the nonprofit.

The city’s investigation also looked at the city agency that kept funding UBA

“Our investigation revealed systematic vulnerabilities in the Department for the Aging’s practices that we are now working with the agency to correct so that city services get to New Yorkers in need not to crooks who prey on them,” said DOI Commissioner Mark Peters.

The investigation found that the city’s Department for the Aging only has two staff members responsible for conducting hundreds of audits. Each auditor has a case load of more than 100 non-profits.  

Insaidoo was able to exploit the fact that the city agency collects a limited number of supporting documents to substantiate invoices to the point of over-reporting total expenses by more than 500 percent, according to the DOI report.

According to their 2014 tax filings, UBA received $1.5 million from the government, which accounted for 89 percent of their total revenue of $1.676 million.

Their expenses that year totaled $1.672 million — 37 percent went to pay salaries and wages while 25 percent paid for food for seniors.

The U.S. Attorney for the Southern District of New York Preet Bharara announced the charges Wednesday.

Insaidoo and Pearson have been charged with conspiracy to commit wire fraud, wire fraud, embezzlement of government funds and money laundering conspiracy. The federal charges are each punishable by up to 20 years in prison.

The couple could not immediately be reached for comment.