PA Non-Profit, Victim of Fraud, Seeks Restitution Whilst Facing Possible Revocation of its Corporate Franchise

Thesentencing of Ruth Arnao, former aide and longtime friend of convicted ex-StateSenator Vincent J. Fumo, brings limited closure to a sordid tale of petty theftfrom a Pennsylvania non-profit.  Arnao, once the headof Citizens’ Alliance for Better Neighborhoods, was found guilty of conspiringto defraud the nonprofit by getting it to pay for hundreds of personal and consumerservices.  She was sentenced to serve 12 months and 1 day behind bars while Fumo got 55 months.

Meanwhile the state Attorney General’s Office took the first step toward dissolvingCitizens’ Alliance in April, filing a civil complaint seeking revocation of itscorporate franchise.  The non-profit has issued a statement casting itself as a victim of Fumo and Arnao’sfraud scheme.  According to the Philadelphia Inquirer, in the victim impactstatement submitted last week just prior to Fumo’s sentencing, Citizens’ Alliance said that it wantedrestitution, including the $2.1 million it had contributed to Arnao’sdefense.  The report stated that the non-profit’sreputation had been “damaged irreparably as a result of its constantassociations with the illegal activities of the defendants.”  It also said that in addition to having to discontinuemany of its programs and discharge employees, the reputation of its board ofdirectors had been harmed. 

As for the financial loss, Assistant U.S. Attorneys John J. Pease and Robert A. Zauzmer contended that as aresult of Fumo and Arnao’s fraud, which included purchases of tools, expensive paint, farm equipment and cars,  the non-profit suffered $1.7 million inlosses, not including the money spent on lawyers.

SS