ELYRIA — The South Elyria Neighborhood Development Corp. will not receive grant money it is due to receive while police investigate allegations of employee theft in the nonprofit organization.

During this year’s public hearings to determine how the city would divide its allotment of Community Development Block Grant funds, representatives of SEND advocated for more money for the city’s nonprofit organizations. In the end, city officials changed the original budget, making thousands available to non-profits groups. SEND was budgeted to receive $20,000.

But that was before the nonprofit shuttered its Middle Avenue office, terminated the executive director and a criminal investigation was launched. Now the group will receive no money until the matter is cleared up, said city Law Director Terry “Pete” Shilling.

“Disbursement of all monies has been put on hold pending the outcome of the criminal investigation,” he said. “No formal charges have been filed against anyone, but I think it’s better to wait before the group receives more money.”

Elyria police Lt. Andy Eichenlaub said no arrests have been made. Investigators are still poring over financial documentation from the group, and it’s too early to determine if any charges could result.

In the meantime, council members are exploring whether SEND’s $20,000 should be redistributed to other nonprofit organizations. When CDBG funding was doled out this year, SEND received the most, while other groups were allocated less than or none of the money they requested.

It’s too early to definitively say the city will cut SEND off, but such talks will likely take place in the near future, said Council’s Community Development Committee chairman, Tom Callahan, D-at large.

Callahan said he has already been in touch with Carol Nawrocki, director of Community Development, to ensure not only that the $20,000 allocated for SEND is safe, but also that the ongoing criminal investigation does not jeopardize future grants from the U.S. Department of Housing and Urban Development. Neither is an issue, Nawrocki said.

Detectives have been looking at the nonprofit organization since March 10 when a police report was filed alleging that as much as $3,000 was missing from the nonprofit’s coffers. At that time, SEND attorney Stephen Beranek said during a review of the organization’s financial records board members uncovered bookkeeping irregularities and falsified bank statements. It is believed that the theft took place over the course of several months.

SEND got its start in 2001 and has since worked to turn around south Elyria — an area plagued with drugs and violence. Predatory mortgage lending and the foreclosure crisis threatened to further deteriorate the neighborhood, but SEND has stood up for residents fighting for homeowners.

When this year’s CDBG applications for funding were filed, SEND originally requested $64,000 to cover $59,000 in operating expenses and $5,000 in training. In 2007, SEND received more than $28,000 from the same program.

Contact Lisa Roberson at 329-7121 or lroberson@chroniclet.com.

 

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