LYNNCAM under scrutiny!

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Board members at non-profits need to look carefully at this line in the AG's Press Release:

The complaint further alleges that Demakes, the treasurer, and McCully, a LynnCAM director, did not exercise proper oversight over LynnCAM’s affairs and failed to prevent the misappropriation and misuse of its charitable funds.


For Immediate Release - March 13, 2015 

AG’s Office Sues Directors of Lynn Community Access and Media for Misappropriation of Charitable Funds

AG’S ACTION SEEKS TO RECOVER MISAPPROPRIATED FUNDS FOR THE CHARITY 

HTTP://WWW.MASS.GOV/AGO/NEWS-AND-UPDATES/PRESS-RELEASES/2015/2015-03-13-LYNNCAM.HTML

BOSTON — The current and former president of Lynn Community Access and Media, Inc. (LynnCAM), along with two of their family members, have been sued for misappropriating tens of thousands of dollars of the charity’s funds for their own personal use, Attorney General Maura Healey announced today. Two other board members have also been sued for failing to exercise proper oversight of the charity’s operations. 

The AG’s Office filed a lawsuit yesterday in Suffolk Superior Court against Karen Chapman, LynnCAM’s former president; her husband, John Chapman; Robert Sewell, LynnCAM’s current president; Almanzo Rodriguez, Robert Sewell’s brother-in-law; Cynthia Demakes, LynnCAM’s treasurer; and Lawrence McCully, a LynnCAM director. A preliminary injunction hearing has been set for April 2 in Suffolk Superior Court.

LynnCAM is a Massachusetts charitable non-profit corporation organized in 2005 that operates a community television studio for the purpose of providing public, educational and municipal access.

“We allege that these defendants abused their positions of power and were responsible for the misappropriation of charitable funds from this non-profit,” said Attorney General Healey. “Actions such as the ones alleged here cause financial harm to the charity and its mission and undermine the public’s trust. We hope that through this action, we can recover the money rightfully owed back to the charity.”

In the lawsuit, the AG’s Office alleges that Karen and John Chapman, along with Sewell, treated LynnCAM’s charitable funds as their own, using several thousands of dollars to make purchases at various retail stores, home improvement stores, restaurants and gas stations. The complaint also alleges that John Chapman, a plumber, used LynnCAM funds to purchase items used in connection with his business and never repaid the organization. 


Further, Sewell and John Chapman allegedly caused LynnCAM to issue numerous checks as payment for services that were never rendered, or to payees that did not exist, and then personally cashed those checks and retained the proceeds for their own personal use. 

The complaint alleges that Rodriguez benefited from those checks.
John Chapman was also allegedly paid more than $30,000 by LynnCAM in after-tax salary between 2012 and 2014, despite the fact that he was not an employee and a provision in the by-laws expressly precluded the organization from hiring relatives of its officers and directors. Likewise, Karen Chapman received more than $14,800 in payroll checks during that time despite the fact that the by-laws prohibited her from receiving compensation for her work there.

The complaint further alleges that Demakes, the treasurer, and McCully, a LynnCAM director, did not exercise proper oversight over LynnCAM’s affairs and failed to prevent the misappropriation and misuse of its charitable funds.

The AG’s lawsuit seeks to have the six defendants pay restitution to LynnCAM and also seeks to prohibit them from serving in any position of authority in any other Massachusetts public charity.

The Attorney General’s Office, through its Non-Profit Organizations/Public Charities Division, is responsible for overseeing the public’s interest in the Commonwealth’s non-profit charitable organizations.

This matter is being handled by Assistant Attorney General Brett J. Blank and Deputy Chief Nora Mann of AG Healey’s Non-Profit Organizations/Public Charities Division, and with assistance from Investigator Daniel Ferullo, also of the AG’s Non-Profit Organizations/Public Charities Division. The Lynn Police Department provided assistance in this case.