DETROIT — A Michigan CEO has been accused of stealing $240,000 intended to help poor and homeless people and spending it on trips to Florida resorts, shopping sprees, Lululemon athletic wear and a new roof on his $700,000 house, according to a criminal complaint unsealed Thursday in federal court.
John R. Lynch, 56, of Grosse Pointe Park, Michigan, allegedly abused his position as chief financial officer and chief executive officer for the Holy Cross organization to help himself, his family and friends.
Holy Cross is a nonprofit that receives government funding and helps provide financial support, welfare and behavioral health careservices to disadvantaged children and families across Michigan.
The government alleges that Lynch, who made $200,000 a year at Holy Cross, used his job at the charity to help bankroll his lifestyle, and pulled off his scheme by submitting phony invoices and paying businesses that he pretended were operated by a relative, when they were really his.
He is charged with wire and mail fraud — which carry a 20-year maximum prison sentence — and stealing from an organization that receives federal funding, a 10-year felony.
For more details:Feds say Grosse Pointe CEO stole $240K from the poor to buy trips, new roof, Lululemons
Lynch popped up on the federal government’s radar in 2017 when a Holy Cross employee noticed Lynch appearing to use his Holy Cross American Express corporate card to pay his personal expenses, according to an FBI agent’s affidavit on file in federal court. An investigation followed and auditors discovered that between 2014-17, Lynch misused his corporate card to the tune of $36,500.
According to the FBI, all of this money was supposed to help needy children and families who turned to Holy Cross for help.
During their investigation, auditors also red-flagged numerous checks that Lynch had written to various entities over the years, none of which involved Holy Cross business matters, the FBI affidavit says.
For example, in 2016, Lynch wrote two Holy Cross checks totaling $12,500 that were used to put a new roof on his 4,000-square-foot brick tudor.
And there was scheming with an unnamed brother-in-law, says the FBI. According to the FBI, Lynch ended up issuing 14 checks drawn on the checking account of Holy Cross Children’s Services to his brother-in-law, totaling $39,150. His brother-in-law deposited the checks into his personal checking account, and then wrote Lynch eight checks, splitting the amount.
According to court records, Lynch also steered Holy Cross funds to his own consulting company and a security services business that he secretly controlled through a brother-in-law. Court records show that Holy Cross hired this security firm to work at the Samaritan Center on Detroit’s east side without any bidding process, not knowing that Lynch was secretly controlling the business through a relative.
Lynch became the CFO of the Holy Cross organization in 2012, according to court documents. He was paid $180,000 that year, though his salary jumped to $200,000 when he became a Holy Cross employee in 2015.
He was terminated in 2017 after his credit card activities raised suspicions.
Lynch made an initial appearance in federal court Thursday and was released on a $10,000 unsecured bond. His court-appointed lawyer, Benton Martin, declined comment.
More: Grosse Pointe Park residents express bias concern with police, call for diversity
Follow Tresa Baldas on Twitter: @TBaldas