Financial Fraud: Wafa Abboud, Marcelle P. Bailey and Rami Misbah Taha Indicted For Embezzling And Laundering From Charity
Former Executive Director And Two Co-Defendants Indicted For Embezzling And Laundering Hundreds Of Thousands Of Dollars From Charity
On Friday, July 15, 2016, a federal grand jury in Brooklyn returned a seven-count indictment charging Wafa Abboud, the former executive director of a charity that provides services to individuals with developmental disabilities, and Marcelle P. Bailey and Rami Misbah Taha, with embezzling and laundering hundreds of thousands of dollars from that charity for Abboud’s personal use. The defendants were also charged with bank fraud in connection with Abboud’s purchase of her residence in Merrick, New York.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Eric Schneiderman, New York State Attorney General; and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
As is alleged in the federal indictment, between January 2011 and her termination in May 2016, Abboud served as the Executive Director of Human First, Inc. (Human First), a not-for-profit social services provider based in Nassau County, New York, that provided services to children and young adults with autism and other development disabilities throughout the metropolitan New York City area.
The government’s investigation revealed that, during the relevant period, Abboud directed Human First to pay approximately $900,000 in purported consulting fees to a company controlled by her co-defendant, Bailey. Abboud, in turn, used hundreds of thousands of dollars of these funds to pay her personal expenses, including more than $114,000 in personal credit card debt, which included charges for cosmetic surgery, family vacations, jewelry, meals, and spa treatments. She also used the funds to pay property taxes on her Merrick residence and to make large international wire transfers.
In December 2014, Abboud purchased the Merrick residence for $1.3 million, making a down payment of $340,000. In the months prior to that purchase, she authorized hundreds of thousands of dollars in payments from Human First to companies controlled by her co-defendant Taha, payments that were purportedly for renovation work being performed on Human First owned properties. Instead, those funds were re-routed to Abboud and used to fund the down payment on her residence. Similarly, between April and December 2015, Abboud directed Human First to pay more than $400,000 to Taha-controlled entities, the vast majority of which were then transferred to a construction company as a payment for renovations on Abboud’s residence.
Abboud, Bailey, and Taha are also charged with conspiracy to commit bank fraud in connection with false statements they made to secure the $1 million mortgage on Abboud’s residence.
United States Attorney Capers stated, “Embezzlement of public funds meant to aid individuals with developmental disabilities impacts some of the most vulnerable members of our community. With this indictment, we serve notice that those who engage in such crimes will be vigorously investigated and held to account.” Mr. Capers extended his grateful appreciation to the New York State Office of the Inspector General for its assistance.
“The crimes alleged by state and federal prosecutors are troubling, particularly because they involve funds intended to benefit the developmentally disabled community,” said Attorney General Schneiderman. “When individuals embezzle funds intended for a charitable purpose it undermines the mission of the charity and harms all donors and honest non-profit organizations.”
“As alleged, Wafa Abboud embezzled and laundered hundreds of thousands of dollars from a charity she was entrusted to run over a time period of five years. Abboud used co-conspirators to help her steal funds that were intended to help children with disabilities; instead the funds were used to finance a lavish lifestyle. Corruption is corruption wherever it exists. The FBI is committed to investigating and rooting it out, whether it happens in a public office or a nonprofit organization,” stated FBI Assistant Director-in-Charge Rodriguez.
The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the embezzlement charges, the defendants face a maximum sentence of 10 years’ imprisonment. If convicted of conspiracy to embezzle public funds, the defendants face a maximum sentence of five years’ imprisonment. If convicted of bank fraud or conspiracy to commit bank fraud, the defendants face a maximum sentence of 30 years. If convicted of conducting an unlawful monetary transaction over $10,000, the defendants Abboud and Taha face a maximum sentence of 10 years.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Robert Polemeni and Nathan Reilly, along with Special Assistant United States Attorney John Chiara (Special Counsel, Office of the New York State Attorney General) are in charge of the prosecution.
Merrick, New York
MARCELLE P. BAILEY
Floral Park, New York
RAMI MISBAH TAHA
Bronx, New York
E.D.N.Y. Docket No. 16-CR-396