Feds want clients' money they say HARC stole - WFLA News Channel 8

Feds want clients' money they say HARC stole

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Former HARC Offices - Kirby Street, Tampa FL Former HARC Offices - Kirby Street, Tampa FL
Vicki Caldwell - HARC Client Vicki Caldwell - HARC Client
Former HARC Chief Executive Officer Richard Lilliston Former HARC Chief Executive Officer Richard Lilliston
Franklin's parents pictured Franklin's parents pictured
TAMPA, FL (WFLA) -

The federal government has set in motion plans to seize $87,000 that it claims the Hillsborough Association for Retarded Citizens (HARC) unlawfully took from its clients. The money is sitting in a Synovus bank account held in the name of "HARC Endowment." The office of the U.S. Attorney has filed a complaint for forfeiture on the grounds "that the funds are the proceeds of the theft of government property."

1/31/2013 Related Story: HARC faces investigation, assets sold 

The action follows a series of 8 On Your Side investigative reports that started airing in January. The reports revealed that HARC, a decades old non-profit, created as an alternative to institutionalizing retarded citizens, took what investigators believe is up to $700,000 from clients with their knowledge or permission.

2/11/2013 Related Story: HARC took clients' money to stay afloat

According to an affidavit attached to the government's complaint, the U.S. Department of Health and Human Services, Office of Inspector General and the Florida Department of Financial Services began a joint criminal investigation into HARC, in February based on allegations that HARC took "social security benefits owed to and intended for the mentally retarded clients of the Hillsborough Association for Retarded Citizens."

2/25/2013 Related Story:
Safeguards fail HARC clients, where is law enforcement?

The money came from clients like 44 year old Vicki Caldwell. Vicki's mother, Carolyn, placed her in a HARC group home more than 20 years ago.

In April, an 8 On Your Side investigation revealed HARC removed $49,000 of Vicki's social security benefits.

4/11/2013 Related Story:
Florida attorney general investigating HARC

Carolyn Caldwell says she had no idea HARC took any of Vicki's money.

"I think that they should have to account for every penny," Caldwell said.

Of the more than 50 clients whose money was taken, Vicki lost the most.

The money was intended for clients' supplemental care and needs.

In May, 8 On Your Side profiled the late Robert Franklin, an individual with Down syndrome. HARC took at least $7,100 of Robert's money.

5/1/2013 Related Story: State hits HARC for $310,000

His brother Ralph was stunned.

"That money was stolen from them in my opinion, without their knowledge," Franklin said.

HHS-OIG Special Agent Charles Thomas wrote in the affidavit attached to the government's complaint that HARC obtained the signatures of 47 developmentally disabled clients on complicated contracts called joinder agreements. Several of those clients, including Robert Franklin, had legal guardianships already established.

Read the affidavit: Click Here

Ralph Franklin learned that his brother Robert signed a joinder agreement, when he saw Robert's contract featured on television in an 8 On Your Side report.

"They knew that he wouldn't have the mental capability to enter into this kind of legal agreement," Ralph Franklin said.

5/14/2013 Related Story: Guardian; HARC violated trust

Attorney Peter Hobson now represents Franklin in an attempt to recover the money that the government now claims was unlawfully taken.

"You can't under Florida law ask somebody who doesn't have the competency to understand the document to execute the document. It's 101 in contract law," Hobson said.

8 On Your Side reported that Robert Franklin's joinder agreement was signed by former Chief Executive Officer Richard Lilliston and notarized by former Chief Financial Officer Frank Pannullo in 2007. The HARC employees who signed as witnesses to the execution of the paper did not start working for HARC until 2009.

The feds found similar discrepancies on several of the joinder agreements. The affidavit calls the contracts "Sham Agreements."

The joint federal and state criminal investigation discovered that HARC unlawfully set up bank accounts for Vicki, Robert and other clients, then siphoned away their social security benefits.

According to the affidavit, in 2010, deposits totaling $99,010 were transferred from 56 HARC client accounts at Synovus Bank alone, into the HARC Endowment Fund account.

In 2011, deposits totaling $120,477 were transferred from 56 HARC client accounts at Synovus Bank alone, into the HARC Endowment Fund account.

In 2012, deposits totaling $69,400 were transferred from 56 HARC client accounts at Synovus Bank alone, into the HARC Endowment Fund account. The money was then spent by HARC.

"It is criminal fraud under the social security law if you receive payment from social security for the benefit of an individual and then appropriate to anything other than the benefit of the individual," Hobson said.

When confronted, in February, by 8 On Your Side, about what happened to the clients' money, former HARC CFO Pannullo at first said he didn't know. Moments later, when reminded, he remembered.

"It was probably borrowed for operations, it should show in the foundation book," Pannullo said.

The federal investigation confirmed 8 On Your Side's earlier reports, that HARC used clients' money to fund its daily operations. Their money was also used in part to help pay for $1,800 a month car allowances for Pannullo and former CEO Lilliston.

Pannullo confirmed that if the clients' money was used for operations, then it helped pay for those car allowances. He said CEO Lilliston had to know about the movement of the money.

Both Pannullo and Lilliston were fired by HARC.

Lilliston has refused all comment about HARC.

The agency, on the verge of financial collapse, sold its assets in February to Sunrise Community Inc., a non-profit out of Miami.

Following 8 On Your Side reports about HARC taking money from his brother, Ralph Franklin contacted the office of the U.S. Attorney in May asking for an investigation.

"Somebody in government needs to stand up for these kind of children," Ralph Franklin said. "These kind of children can not protect themselves."

U.S. Attorney spokesperson William Daniels relayed via email that "persons with potential legal interests in the account will be notified of the complaint and provided with information about how to file a claim."

4/18/2013 Related Story: New company distances itself from HARC 

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