The heartless scam could have bilked Catholic Charities of St. Paul and Minneapolis of $750,000, the nonprofit said in a statement ― money that state and local governments had given the charity for homeless outreach.
One of the defendants, Shaneka Lashay Mzee, pleaded guilty to a conspiracy charge on Monday. Federal prosecutors have charged at least four others allegedly involved in the scam, the Star Tribune reports ― Aisha Lenee Davis, Leteaste Henry-Davis, Rachael Elizabeth Ekholm, and Sharre O. Rush.
Prosecutors say defendants took advantage of a program Catholic Charities uses to help Minnesota’s homeless population. The organization reportedly makes direct rent payments to landlords who agree to provide homeless clients with housing.
According to court documents, an unnamed Catholic Charities employee recruited Mzee, who was not an employee, and others to pose as landlords pretending to rent to homeless clients. The defendants allegedly used fraudulent IRS W-9 forms, lease agreements and check requests to obtain payments from Catholic Charities. Mzee and others then cashed the checks and split the proceeds between themselves and at least one Catholic Charities employee for their own personal use, prosecutors say.
The scheme allegedly began around April 2012 and continued until June 2017.
The funds from Catholic Charities of St. Paul and Minneapolis originally came from the Minnesota Housing Finance Agency, a state agency tasked with reducing homelessness and preserving affordable housing.
Homelessness is a major issue in Minnesota, one that has had an outsized impact on the state’s Native Americans. Minnesota saw a 4.5 percent increase in its homeless population between 2016 and 2017, according to the Star Tribune.
Mzee is accused of stealing over $26,000, according to court documents.
“She has fully accepted responsibility for her actions,” Mzee’s attorney Steven Wolter told the Star Tribune.
Catholic Charities of St. Paul and Minneapolis is part of a nationwide network of charities associated with the U.S. Catholic Church. The Minnesota branch said in a press release that an internal investigation beginning in March 2017 uncovered the fraud. The staff members suspected of being involved in the scheme were fired. The organization said it is working with its insurer to cover the losses.
“Catholic Charities was the victim of criminal acts of fraud and deception,” the charity said in a statement. “The organization discovered the acts, took action and is cooperating with law enforcement in the ongoing legal proceedings.”