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Attorney General James Recoups State Funds Earmarked for Children’s Program Pocketed by Rochester Nonprofit Director

NEW YORK – New York Attorney General Letitia James today announced her office has recouped more than $57,000 in state and taxpayer funds pocketed or otherwise misallocated by a former program director at the Rochester Area Community Foundation Initiatives, Inc. (RACFI). The nonprofit organization RACFI reported the misallocation of state grant funds by Adam McFadden, a former executive director of its Quad A for Kids program, after an independent investigation found that McFadden had diverted funds for personal use and misallocated additional funds for programs not eligible for state funding. 

“Adam McFadden abused the public trust and the office he held by misusing state and taxpayer funds intended for children’s after-school enrichment programs,” Attorney General James said. “Any organization that accepts taxpayer dollars has a responsibility to account for those funds and ensure they serve the public good, not allow one individual to personally benefit from those funds. RACFI’s prompt and active steps to identify and correct the misconduct and scandal surrounding this incident, and immediately report the misuse to my office are to be commended. Mr. McFadden’s behavior should never be tolerated, which is why I will continue to fight for the effective and corruption-free use of state money to benefit New York’s children and other vitally important causes.”

On February 22, 2019, McFadden — who was also vice president of the Rochester city council — was arrested and charged with federal crimes associated with a scheme to defraud the Rochester Housing Authority. RACFI promptly retained outside counsel, which hired an independent forensic accounting firm to investigate McFadden’s use of its program funds in his capacity as executive director of Quad A for Kids. RACFI also promptly notified the Office of the Attorney General (OAG) that state grant funds may have been affected and of the steps it was taking to confirm the amounts misappropriated.

RACFI’s investigation confirmed that McFadden diverted $57,598 of the nonprofit’s program funds as an executive director of one of its programs, the vast majority of which he pocketed for personal use. Those funds included state grant money — specifically the Advantage After School Program grant funds — which were intended to fund quality after-school programs for local children. 

In light of RACFI’s prompt self-disclosure of the misconduct, and good faith efforts to investigate and correct it, the OAG has accepted a repayment of $57,598, without penalties. The funds will be returned to the Office of Children and Family Services — the source of the grants.

In connection with federal investigations, McFadden has pled guilty to felony wire fraud for engaging in a scheme to defraud the Rochester Housing Authority, to felony wire fraud for submitting false invoices and receipts to RACFI for reimbursement, and to filing a false tax return. RACFI has terminated McFadden’s employment, and, as a result of his guilty pleas, he has also been removed from public office.

The OAG’s investigation of RACFI was led by Assistant Attorney General Sujata Tanikella, with the assistance of Legal Support Analyst Megan McDaniel, under the supervision of Taxpayer Protection Bureau Chief Thomas Teige Carroll and Deputy Bureau Chief Scott Spiegelman. The Taxpayer Protection Bureau is a unit of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.