Embezzlement from children’s non-profit means prison time for ex-CEO

Lansing, Mich., Feb 17, 2022 / 14:27 pm (CNA).

A former executive of a historically Catholic Michigan non-profit that serves neglected children and young adults has been sentenced to prison and must pay restitution after pleading guilty on a charge related to his embezzlement of almost $250,000 in funds.

John R. Lynch, 57, was CEO of Holy Cross Services from January 2015 to April 2017. He was fired by the Holy Cross Services board after it found apparent evidence of embezzlement. He had joined the organization as its chief financial officer in March 2012.

In September 2021 Lynch pleaded guilty to one count of wire fraud for victimizing the organization.

U.S. District Judge Bernard A. Friedman sentenced Lynch to one year in prison and six months at a halfway house. He must serve three years of supervised release and also pay restitution totaling nearly $248,000, the approximate amount he had embezzled.

Holy Cross Services is based in Clinton, Mich. It was founded as Boysville of Michigan in 1948 by the Catholic bishops of Michigan. In 2019, Boysville of Michigan became Holy Cross Services and is not under the auspices of any diocese.

Holy Cross Services serves abused and neglected children, youth, and young adults with substance abuse and mental health problems, and homeless children and adults. Its statewide work includes financial support, welfare and behavioral health care for children and their families in need. It also operates Samaritan Center, which provides community resources and health care on Detroit’s East Side.

Lynch, at the time of his plea, admitted to using stolen money to pay for personal car repairs, a new roof for his house, and mortgage and personal credit card payments, the U.S. Attorney’s Office for the Eastern District of Michigan said Feb. 16.

He used the charity’s money to pay his own consultant company and to pay for security services through another company he secretly controlled through a relative. He used bogus invoices to record some of these payments

He used his corporate credit card for expensive personal purchases like shopping sprees, personal travel and lodging, and dinners.

Lynch’s salary had been $200,000 a year.

“John Lynch stole from Holy Cross Services,” the non-profit told McClatchy News Feb. 16. “For nearly 75 years, the Holy Cross team has worked hard to help children, adults, and families who have been hurt. We know what recovery looks like, because we see it every day in the resilient communities we serve. Holy Cross is stronger today, having built the safeguards that prevent future abuses of power.”

In 2012, after Lynch had begun working at the charity, he filed for bankruptcy in U.S. District Court, claiming he was over $10 million in debt. This included credit card debt, student loan debt for his children, business loans, and a debt related to a bankruptcy proceeding for a collision company, the Detroit Free Press reported. At the time, he claimed $400,000 in assets and $18,000 in monthly expenses, with an income of $16,500.

Holly Fournier, associate communications director for the Detroit archdiocese, told CNA in April 2021 that although all Michigan dioceses once had a role in supporting the nonprofit, it has been 20 to 25 years since the Detroit archdiocese had any direct involvement.

Though the Archbishop of Detroit has the ability to appoint someone to the board, there was no active board member appointed by the archbishop.

The charity received federal funds through the National School Breakfast Program, the School Breakfast Program. Its federal funds through the Title IV-E of the Social Security Act paid for foster care and adoption and guardianship assistance.

The Federal Bureau of Investigation conducted the investigation of the case, the U.S. Attorney’s Office said.