A federal grand jury has indicted a Vallejo woman in what prosecutors called a $257,000 embezzlement scheme that put a San Francisco nonprofit organization out of business, authorities said.
The indictment charges the 53-year-old Vallejo woman with four counts of wire fraud, U.S. Attorney Ismail Ramsey of the Northern District of California said in a statement. The nonprofit, which provided academic support and employment assistance to students in the Sunnydale and Visitacion Valley neighborhoods of San Francisco, is now defunct.
U.S. Magistrate Judge Alex Tse released the woman on her own recognizance following her first court appearance to face the charges Wednesday. She next will appear for a status hearing on Aug. 30.
The woman was the organization’s director of operations, Ramsey said. The organization received donations from several sources, including the City of San Francisco, San Francisco County and the U.S. Department of Housing and Urban Development.
The indictment alleges that from April 2015 until December 2018, the woman wrote herself 119 checks on the nonprofit’s bank account and prepared paperwork suggesting that the funds from many of those checks would be used to pay the organization’s payroll taxes. Authorities say she instead deposited those checks into other bank accounts she controlled and used the money on herself.
The organization went out of business in 2018 because it was unable to pay about $257,000 in payroll taxes, Ramsey said. It laid off the woman and hundreds of employees before collapsing.
According to the indictment, the woman withdrew cash; traveled; shopped online; went out to restaurants, hotels, casinos and various retail stores; and paid for her rent, utilities and gas with money earmarked for the organization’s payroll taxes, Ramsey said.
She also spent some of the money on expenses for a bakery she’d owned and operated, he said.
The indictment also alleges the woman took several steps to conceal her actions, Ramsey said. Among those actions, he said, was altering the nonprofit’s records to show the payee on the checks she wrote to herself was ADP, a payroll processing company that once worked with the organization.
Ramsey said prosecutors also allege the woman intercepted dozens of communications over several years from state tax authorities to the non-profit regarding the organization’s unpaid payroll taxes. He said she also had a fake email address, purportedly from an employee of the California Department of Economic Development to help her conceal her scheme.