Grosse Pointe Park man convicted of scheme to defraud and steal funds from religious charity | USAO-EDMI
DETROIT – A resident of Grosse Pointe Park was sentenced today to one year in prison and six months in a halfway house for wire fraud in connection with the fraudulent obtaining, embezzlement and theft of the organization’s funds Holy Cross, a large Clinton, Michigan-based charity that receives federal funds, U.S. Attorney Dawn N. Ison said.
Joining the announcement was Acting Special Agent in Charge Joshua Hauxhurst, Federal Bureau of Investigation, Detroit Division.
John R. Lynch, 57, was convicted. During Lynch’s sentencing, U.S. District Judge Bernard A. Friedman also ordered Lynch to serve three years of probation and pay restitution in the amount of $247,867.75.
According to court records, in March 2012, Lynch became the chief financial officer of the Holy Cross organization, and in January 2015, he became its CEO. Holy Cross was established in 1948 when Boysville of Michigan was incorporated under the auspices of the Roman Catholic Archdiocese of Detroit. Boysville of Michigan later became Holy Cross Children’s Services, which is now known as Holy Cross Services. The Holy Cross organization provides social welfare services to underprivileged children and adolescents, behavioral health services to adolescents and adults, and a number of homeless support services. Holy Cross services are provided primarily to people in Southeast and Central Michigan. The Holy Cross organization also includes the Samaritan Center, a large community resource center that provides health care, employment services, and other forms of support to residents of Detroit’s east side.
At the time of his plea, Lynch admitted that when he was CEO of Holy Cross, he used Holy Cross funds to pay for repairs to his own cars, put a new roof on his house, pay off his personal mortgage balance and make payments to a personal American Express account. Lynch also used Holy Cross funds to pay his own consulting firm, JKL Consulting, and to pay another company hired to provide security services to the Samaritan Center, First Nation Security, a company apparently controlled by a relative but in fact controlled by him. Lynch attempted to justify some of these payments with false invoices. Additionally, Lynch used his corporate Holy Cross American Express card to pay for goods and services of a personal nature, such as accommodations at resorts, meals at restaurants, travel, and purchases at stores. clothing and department stores.
In total, Lynch embezzled approximately $248,000 of Holy Cross funds. Further, aside from that, he violated Holy Cross’s conflict of interest policy by directing Holy Cross’s business to companies that he and/or close relatives controlled.
Holy Cross has received federal funds through the National School Lunch Program and the School Breakfast Program. He also received federal funds under Title IV-E of the Social Security Act, which pays for foster care and provides adoption and guardianship assistance.
The case was prosecuted by Assistant United States Attorney Stephen Hiyama. The investigation was led by the Federal Bureau of Investigation.