Funds Derived from Fraudulent Charity Shut Down by AG’s Office
BROOKLYN – New York Attorney General Letitia James today provided more than $2.4 million to the Brooklyn Community Foundation (BCF) to fund substance abuse treatment programs throughout Brooklyn. The funds are derived from charitable assets that remained after the Office of the Attorney General (OAG) dissolved Canarsie A.W.A.R.E., Inc. for its participation in a scheme that exploited some of New York’s most vulnerable residents and defrauded Medicaid.
“Substance abuse is a harmful and pervasive issue in so many of our communities,” said Attorney General James. “Although recovery is never an easy journey, it can be a lot easier with access to reliable treatment programs. Today's agreement ensures that these funds will finally be used in the manner in which they were intended — to support some of our most vulnerable communities. I thank the Brooklyn Community Foundation for their partnership and dedication to helping New Yorkers access these lifesaving treatment services.”
“We are deeply honored and excited to partner with the Office of the Attorney General to redistribute these funds in a way that will repair harm and provide vital resources to trusted and thoroughly vetted community-based health providers,” said Cecilia Clarke, President and CEO of Brooklyn Community Foundation. “Brooklyn Community Foundation’s approach centers community members as key decision-makers to invest in organizations that share our commitment to racial justice. We hope this partnership will serve as a powerful new model for government and foundation collaboration.”
In 2016, as a part of OAG’s investigation into fraudulent substance abuse providers and their exploitation of individuals living in substance abuse transitional housing, also known as “three-quarter houses,” OAG indicted Canarsie A.W.A.R.E. Inc., a New York not-for-profit organization that provided substance abuse treatment services, and its owner for defrauding Medicaid. In September 2018, Canarsie A.W.A.R.E. pleaded guilty to grand larceny in the first degree. In 2019, OAG won a New York Supreme Court order to dissolve Canarsie A.W.A.R.E. and distribute its assets for use by other substance abuse treatment programs. Today’s agreement between OAG and BCF is in connection with OAG’s settlement of its claims against Canarsie A.W.A.R.E. Inc.
Under New York’s Not-for Profit Corporation Law, assets remaining after the dissolution of a non-profit organization must be distributed to another non-profit organization engaged in similar activities to those of the dissolving nonprofit. The BCF, a well-established grant-making organization dedicated to mobilizing people, funds, and expertise for a fair Brooklyn, will award grants to Brooklyn not-for-profit providers of substance abuse treatment. The funds will support treatment programs provide technical assistance and capacity-building support to the grant recipients, including assistance with fundraising, financial management, and strategic planning. The BCF will also conduct site visits to the grant recipients, and monitor the recipients’ use of funds through regular reporting requirements and communications. The BCF will award the grants in each of three successive years, beginning in 2021.
“I am pleased that the Brooklyn Community Foundation will be offering grants to substance abuse treatment programs that will operate in our community,” said State Senator Roxanne J. Persaud. “The services offered are much needed as we fight the scourge of addiction while helping people to uplift their lives.”
“I applaud Attorney General Letitia James for her efforts to redistribute assets recovered in a previous settlement against a dishonest drug treatment provider back into our communities,” said Assemblymember Nick Perry. “The $2.4 million disbursement to the Brooklyn Community Foundation should go a long way to providing much needed substance abuse treatment for those Brooklynites struggling with addiction, and get them on the road to recovery rather than on a path through our criminal justice system.”
“The Substance Abuse and Mental Health Administration reported that in 2019, more than 6 million Black Americans suffered from a mental health illness and or substance abuse issue,” said New York City Council Majority Leader Laurie A. Cumbo. “Mental health and substance abuse are urgent issues that often go unaddressed due to stigma and lack of accessible resources, and COVID-19 has further deepened the mental health and substance abuse crises our communities are facing. Although it is gravely disappointing when patients are victimized by organizations meant to help them, I could not think of a better organization to recover funds from Canarsie’s A.W.A.R.E program. The Brooklyn Community Foundation, located in District 35, has provided over $50 million dollars in grants to non-profit organizations throughout our community for over a decade. I am confident that their community-based approach will allow these newly acquired resources to reach those who need them most at a time when we are all suffering. Thank you to the Charities Bureau for making this possible and to Attorney General James for her unwavering dedication to uplifting our Brooklyn community.”
This matter is being handled by Assistant Attorney General Peggy Farber, under the supervision of Charities Bureau Enforcement Section Co-Chief Yael Fuchs and Bureau Chief James G. Sheehan. The Charities Bureau is a part of the Division for Social Justice, led by Chief Deputy Attorney General Meghan Faux, and all under the oversight of First Deputy Attorney General Jennifer Levy.
Attorney General’s Press Office/212-416-8060 firstname.lastname@example.org