HARC, an agency that provided services, support and care for developmentally disabled people in Hillsborough county for 60 years, took hundreds of thousands of dollars from its clients without their knowledge or permission. The money has not been returned to clients.
Florida's Attorney General investigated, closed the case without filing charges in December 2012 and referred it on to the Florida Department of Financial Services, which is conducting a false claims investigation involving HARC.
The Hillsborough Association for Retarded Citizens, doing business as the Hillsborough Achievement and Resource Center (HARC) grabbed the money beginning in 2007 to help meet payroll and keep the lights on.
"It was clearly improper, it was clearly wrong, it was not authorized and we were shocked and very surprised that in fact it had happened," said Steven Brannock, chairman of HARC's Foundation.
Brannock's brother-in-law lives in a HARC group home and is one of the clients from whom money was taken.
Brannock laid the blame on former HARC CEO Richard Lilliston and CFO Frank Pannullo.
Clients who live in HARC's 9 group homes typically receive money from Social Security and Medicaid as well as private donations from family and friends.
According to Brannock if clients accumulate more than $2,000 in their personal accounts, they may lose their eligibility for Medicaid and Social Security. A common solution is to set up a special needs trust.
Brannock claims Lilliston and Pannullo came up with a do-it-yourself solution for the operating shortfall. He said without HARC's board of directors' knowledge, Lilliston and Pannullo pooled the clients' money into a pool trust account that was similar to a money market account.
According to the A-G's investigation, former HARC CFO Jane Frank told an investigator in November 2011 that at that time the fund should have contained $380,000, but it only had $2500. Frank says she found where money was regularly withdrawn from the account.
Pannullo initially said he doesn't didn't remember where the money went.
Frank told the attorney general investigator the money was used to cover HARC's operating expenses.
When asked who gave him permission to use the clients' money for operating expenses Pannullo stated, "The CEO, he had to know about it."
"It was absolutely wrong it was never authorized by the board. As soon as we found out it had happened, and it happened, my brother-in-law was one of the clients who's monies were transferred into operating, we immediately hired an attorney and an accountant to try to determine exactly where the money went. And we then notified the affected family members," Brannock said.
"I have absolutely no comment about HARC," Lilliston said when contacted by telephone.
HARC contacted an attorney and hired a forensic accountant to track the money.
Brannock says HARC also contacted, met and has cooperated fully with the attorney general's office.
Brannock claims the agency, which was strapped for cash, ran out of money to pay the accountant before he could finish his audit and determine exactly where the clients' money was spent.
Frank also told the attorney general's investigator, that Lilliston and Pannullo enjoyed privileges such as $1,800 a month vehicle allowances. She went on to say those benefits were paid from the general fund. The general fund, she claimed, was covered, at least in part, by clients' money.
Pannullo admitted that if the clients' money went into operations, it may have paid for his car allowance.
Brannock concedes the general fund pays for whatever benefits HARC's administrative staff enjoyed.
However he's adamant that HARC's board was not aware of those expensive monthly vehicle allowances.
"We would never have approved a car allowance in that range. I think we all were under the assumption that the car allowance had remained in the same $200 to $300 dollar range that it had been historically," Brannock said. "As soon as we found out that Mr. Lilliston had increased his car allowance, he was terminated almost immediately."
According to Brannock, the board never approved a car allowance for Pannullo.
"Mr. Lilliston approved it," Pannullo said.
"You never touch the funds for the people you serve. That's their money it's for them to decide how they're going to spend it. In this field that's an absolute. nobody does that, nobody should do that," Jim Freyvogel, president of the MacDonald Training Center said. The MacDonald Training Center is another local non-profit that works with and supports developmentally disabled people.
8 On Your Side obtained an audio tape of the July 23, 2012 HARC board of directors meeting. At that meeting, HARC attorney Cynthia Mikos relayed to the board she had met with state investigators.
"I can tell you the dollar amount at issue is like $750 thousand to $800 thousand dollars, it is a very significant amount of money,." Mikos said.
According to Mikos, HARC's general expenses also included some other perks for Lilliston.
"It does appear that there are some interesting reimbursements, things like cell phones, car insurance policies etc, etc, etc. that were probably for family members," Mikos told board members.
"Mr. Lilliston was authorized to have his own cell phone but not authorized to have cell phones for the rest of his, the members of his family and that was part of the grounds for the employment action that we took after we discovered that and the car allowance," Brannock said.
HARC did not have the money to reimburse the clients and also keep its doors open.
"The monies in those pool trust accounts are supposed to be used for the support and maintenance of the clients and to the extent that the monies went into operating it was in fact used for the support and maintenance of the clients," Brannock said.
Freyvogel maintains even if the money was used to keep HARC's lights on, administrators should have notified the clients up front.
"If they didn't have the individual's permission, there is no responsible use, regardless of how you justify it, at all, because it's not your money," he said.
The Attorney General closed its investigation in December 2012. It did not find that Medicaid money was taken. It referred the matter to Florida's Department of Financial Services. DFS is investigating HARC for filing false claims, billing the state for services it did not provide.
Saddled with debt, facing fines, penalties and expensive legal bills, HARC sold its assets January 31st to Sunrise Community Inc., ending its 60 year run of caring for the developmentally disabled.
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