HARTFORD – The state has filed suit against the former executive director of the now-defunct South Arsenal Neighborhood Development, Inc. over allegations that she misappropriated charitable funds in violation of state law, Attorney General George Jepsen and Department of Consumer Protection Commissioner William M. Rubenstein announced on Tuesday.
Karen Lewis served as executive director of SAND from at least Jan. 1, 2000 to Dec. 31, 2009. The state alleges that beginning in November 2006, Lewis used SAND’s ATM/debit card to withdraw charitable funds and to make purchases at the state’s two casinos, at retail stores for personal items and for payment of a personal credit card. The state believes Lewis misappropriated more than $200,000 in charitable funds.
“The behavior we allege in this complaint represents a breach of fiduciary duty on the part of an individual who had a responsibility to protect charitable funds,” Jepsen said. “These funds were intended to support the Arsenal Neighborhood, but were instead used by Ms. Lewis for her personal gain. This conduct simply will not be tolerated.”
“Charitable donations are expected to be utilized for good works, and the sad fact of the matter in this case is that the good works and programs of SAND, which helped so many, appear to have been diminished by the very person responsible for ensuring that those programs happened,” Commissioner William M. Rubenstein said. “Whenever such funds are diverted from their intended charitable purpose, we will act to hold accountable those responsible for managing the funds.”
The state’s suit seeks a permanent injunction against Lewis holding any office, directorship or position of employment or any other association with a charitable organization in Connecticut where she will have control of the funds of the organization or authorization over the disbursement of funds. Additionally, the suit seeks forfeiture of all ill-gotten gains and civil penalties.
Connecticut law requires that any asset intended for public or charitable use or any bequests held as a charitable trust shall forever remain to the uses and purposes to which such asset was granted according to the true intent and meaning of the grantor and to no other use. The Attorney General is required by state law to “represent the public interest in the protection of any gifts, legacies or devises intended for public or charitable purposes.”
SAND was a §501(c)(3) organization based in Hartford that was created to support social and economic improvements in the South Arsenal neighborhood. SAND received charitable gifts and grants to use exclusively for its charitable purposes. The organization dissolved in 2010.