Homeless shelter reeling after alleged $96,000 embezzlement
by Paul Bowers
When Stacey Denaux started her job as CEO of Crisis Ministries nine years ago, Chief Financial Officer Carol Libby had already been working there for about a year. A certified public accountant from New York, Libby had moved to Charleston and taken a job at the homeless shelter, based in a former Piggly Wiggly warehouse on crumbling upper Meeting Street.
On Thurs. June 6 this year, Wells Fargo Loss Prevention called to tell Denaux that some checks written to institutions that work with Crisis Ministries had been deposited into Libby’s personal account. The next day the Crisis Ministries CEO passed that information along to police without ever confronting Libby about it. Denaux says she still hasn’t spoken to non-profit’s chief financial officer since getting the news from the bank. “I was stunned, definitely disappointed, distressed, surprised,” Denaux says. “It was a tough thing to hear.”
Crisis Ministries suspended Libby without pay on Mon. June 10, and on the morning of Thurs. June 13, Libby turned herself in to police. Denaux had originally accused Libby of stealing just over $11,000, but at a bond hearing on the afternoon of the 13th, a police affidavit said that between Dec. 13, 2011, and June 3, 2013, Libby “took checks belonging to Crisis Ministries, and made them payable to [different] vendors, totaling $96,199.01, and then deposited said checks into a personal bank account, belonging to her, and once in her possession used said money for her own personal use.” A judge set her bail at $25,000 on a charge of breach of trust with fraudulent intent.
Attorney Bill Runyon, who represented Libby in bond court, says that Libby is married with a 14-year-old daughter. “She has been an outstanding employee for a substantial period of time, and everyone is shocked that these allegations are being made,” Runyon says.
It remains unclear how $96,000 could disappear from an organization’s bank account without somebody noticing, but Elizabeth Boineau, a spokesperson for Crisis Ministries, says it’s important to remember the size of the organization. “It is a large organization with a $4.5 million annual budget,” Boineau says. “We need to think of it in the context of the budget.”
Denaux says she had no reason to suspect Libby of any possible wrongdoing. Every year when Crisis Ministries submitted its tax-exempt income returns to the IRS, Denaux says it was Libby who signed on the line to indicate, under penalty of perjury, that the enclosed statements were “true, correct, and complete.” According to the most recent IRS returns, Crisis Ministries paid Libby $85,000 a year for her work.
Crisis Ministries isn’t the first local nonprofit organization in recent memory to face an embezzlement scandal. Charleston Animal Society President Charles Karesh resigned in 2011 after being questioned about a missing $69,000. This February, shortly after he was arrested on a charge of vandalism for allegedly spitting soup on a Society board member’s car, Karesh was charged with embezzling $71,388 from the organization. His case is still pending.
Joe Elmore, CEO of the Charleston Animal Society, says the organization was able to recoup 100 percent of the lost funds, and he says the Karesh scandal did not hamper the group’s fundraising efforts. “The community trusted the organization and understood that we were a victim,” Elmore says.
Denaux is hoping for a similar outcome at Crisis Ministries. “If this last week is any indication, we are very encouraged by the outpouring of support, the phone calls, the messages, the donations,” Denaux says. “Unfortunately, this seems to be an issue that lots of people who support us have dealt with in one way, shape, or form in their life.”
Crisis Ministries has hired the accounting firm Dixon Hughes Goodman to conduct a forensic investigation of the organization’s finances, and Denaux says the organization’s leadership is reviewing its procedures. Shortly after the $96,000 bombshell hit, Crisis Ministries also hired Boineau as a public relations expert. Boineau has handled some tough cases in the past, including a controversial property sale that forced residents to move out of North Charleston’s Trailwood Mobile Home Park (where she represented the park’s owner, Truluck Properties) and an inquiry into the Citadel’s handling of the Skip ReVille child molestation case (where she represented the Citadel).
The good news is that, according to Boineau, none of the organizations that work with Crisis Ministries appear to have missed out on any payments. “It seems [Libby] made sure all checks were all accounted for in the system, and it appears that all vendors were paid,” Boineau said in an e-mail early in the week. “She may have created duplicate payments that mirrored the legitimate vendor payments, or fabricated payments with no associated invoice.”
Crisis Ministries is in the midst of a major capital campaign to pay for modernized living, clinical, and dining facilities as well as additional beds for homeless male veterans. Construction has already begun near Crisis Ministries’ current cluster of buildings, and the organization is about $500,000 shy of its fundraising goal of $7.7 million.
“You know, the issue of homelessness didn’t end because this happened,” Denaux says. “We’re focused on our mission, and there will be 70 men sleeping in this room behind us. There will be 40 women and children across the street tonight. That didn’t go away.”