Former Treasurer of New England Figure Skating Club Sued for Misappropriating $120,000 of Club Funds for Personal Use
The Attorney General's Office filed a lawsuit against Barry Eavzan, of Sherborn, the former treasurer of a Marlborough-based public charity, New England Figure Skating Club (NEFSC). It is alleged that Eavzan misappropriated approximately $120,000 of the club's funds and assets for uses unrelated to legitimate costs incurred for skating instruction, rental of ice time and travel expenses related to skating competitions.
It is alleged that Eavzan used club funds for personal expenses including airline tickets, limo rides, and the purchases of shoes, flowers, and rugs.
"Misuse of charitable funds not only harms well intentioned organizations and their members, it undermines the public trust and good will of all charitable organizations," Attorney General Coakley said. "We allege that this defendant abused his authority to misappropriate tens of thousands of dollars of charitable funds for his own personal use. Through this action, we are seeking to recover the money that is rightfully owed back to the charity."
A preliminary injunction hearing is scheduled for Thursday, March 25 at 2 p.m. The order requests that Eavzan be prohibited from transferring, spending or dissipating any of the NEFSC's assets; from failing to provide the Attorney General's Office with financial records; and from altering or defacing any of the club's records.
The Attorney General's Office obtained a temporary restraining order, entered by Suffolk Superior Court Judge John Cratsley late last week, which immediately prohibited Eavzan from all of the terms of the request for a preliminary injunction.
The civil lawsuit alleges Eavzan violated Massachusetts public charities laws by authorizing expenditures unrelated to legitimate costs and in violation of public charities laws in Massachusetts. The complaint alleges Eavzan used club funds for personal use, including approximately:
- $33,00 in ATM withdrawals and checks made out to petty cash, and to Barry Eavzan and his wife, Julie Eavzan;
- $27,000 at online and retail stores for lingerie, shoes, flowers, rugs, and yard mulch;
- $22,000 in services such as accounting, cell phones, and investment advice;
- $11,700 at supermarkets and drug stores;
- $15,000 paid to credit cards not owned by NEFSC;
- $5,000 in entertainment related expenses including airline tickets, limo rides, auto repair and restaurants;
- $10,000 in unauthorized expenditures to individuals, charitable organizations, and Eavzan's companies.
In its suit, the Attorney General's Office is seeking to have Eavzan pay civil penalties to the Commonwealth and restitution to NEFSC.
The New England Skating Club was incorporated in 1996 to train young ice skaters and is registered as a public charity with the Attorney General's Office. They are also recognized as a tax-exempt charity by the Internal Revenue Service.
Eavzan served as a volunteer treasurer of NEFSC from 1996 to 2007. Eavzan filed NEFSC's annual financial reports with the Attorney General's Office through 2006, as required by public charities laws in Massachusetts. Eavzan always reported that he never received any income from NEFSC, including in response to questions on the Attorney General's financial reporting forms regarding (i) goods or services provided to related parties; (ii) compensation paid to related parties; (iii) income or assets transferred for use by related parties; and (iv) receipt of anything of value by any NEFSC officer, director or trustee not reported as compensation.
In May 2008, the Attorney General's Office reached a separate settlement with NEFSC relating to its financial practices. In that settlement, the club acknowledged that its record-keeping practices were inadequate and that it had failed to maintain accurate documentation of income and expenses. The settlement also required the club to adopt and implement new financial policies and procedures, hold elections for officers and directors by and provide for greater involvement of the voting membership.
The Attorney General's Office, through its Non-Profit Organizations/Public Charities Division, is responsible for overseeing the public's interest in the Commonwealth's non-profit charitable organizations.
This case is being handled by Assistant Attorneys General Eric Carriker and Leslie Bennett, of Attorney General Coakley's Non-Profit Organizations/Public Charities Division, with assistance from Christine Murphy and Magdalena Borzymowski of the Investigations Division.