Grosse Pointe Park man faces charges of embezzling from nonprofit

By: K. Michelle Moran | Grosse Pointe Times | Published April 20, 2021

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GROSSE POINTE PARK — A Grosse Pointe Park man is accused of embezzling thousands of dollars from a nonprofit that serves Michigan children and adults in need.

As a result of an FBI investigation, on April 8, Grosse Pointe Park resident John R. Lynch, 56, was arrested on federal charges including embezzling, obtaining by fraud and unlawfully converting to his own use funds from Holy Cross Services, a Clinton, Michigan-based private nonprofit that serves children suffering from neglect and abuse, youths and adults grappling with addiction and mental health problems, and homeless veterans, children and adults. Lynch is the former chief executive officer and chief financial officer of Holy Cross Services.

The case is federal in nature because Holy Cross Services receives federal money from the National School Lunch Program and the School Breakfast Program, as well as federal funds under Title IV-E of the Social Security Act for foster care and assistance with guardianship and adoption.

A spokesperson for the United States Attorney’s Office, Eastern District of Michigan, said she couldn’t comment on the case.

In the complaint against him, Lynch is accused of using a Holy Cross Services credit card and checking account to pay for personal expenses including vehicle repairs, mortgage payments, a new roof on his home and purchases from Macy’s in Troy, Lululemon Athletica in Ann Arbor and Bed, Bath & Beyond.

According to a press release from the U.S. Attorney’s Office, Lynch also allegedly “used Holy Cross funds to pay his own consulting company and to pay another company hired to provide security services at the Samaritan Center, a company ostensibly controlled by a relative but actually controlled by him. Lynch attempted to justify some of these payments with bogus invoices.”

Lynch reportedly started working for the nonprofit as an independent contractor circa March 2012, at which time he was paid $15,000 per month, or $180,000 per year, according to the complaint. In January 2015, Lynch became the CEO of HCS, for which he was given an annual salary of about $200,000.

While Holy Cross Services officials weren’t at liberty to comment because of the ongoing criminal investigation, they did release a statement following Lynch’s arrest. Lynch was fired by the Holy Cross Services board in April 2017 after they found what appeared to be evidence of embezzlement.

“In 2017, Holy Cross Services’ management discovered financial irregularities indicative of possible embezzlement activity,” the statement reads, in part. “As a result, HCS initiated an audit which was performed by an outside accounting firm. Holy Cross also immediately notified its insurance carriers and asserted a claim. HCS also reported the matter to appropriate law enforcement agencies (including the FBI). An amicable resolution was reached with HCS’s insurance carriers quite some time ago. During the last several years, HCS has worked closely with the FBI with respect to the matter.

“We want to assure all our donors, stakeholders, clients and partners, that Holy Cross fully cooperated throughout the investigation, and that the organization has implemented best practices and safeguards to prevent this from ever happening again.”

In September 2017 — after Lynch’s tenure — HCS was a co-presenter of VillageFest in Grosse Pointe City; the festival also served as a fundraiser for HCS. A number of the agency’s supporters are from the Grosse Pointe area.

HCS was launched in 1948 when Boysville of Michigan was incorporated under the auspices of the Archdiocese of Detroit. In 2019, it became independent of the archdiocese when Boysville of Michigan became the nonprofit Holy Cross Services.

“Holy Cross Services is a human service agency whose mission is to bring hope, promote change, and help people live free, healthy, and productive lives,” Holy Cross Services Chief Marketing and Communications Officer Kassie Kretzschmar said by email. “Holy Cross has three main service areas: children’s services (residential and community-based foster care), behavioral health services (residential and outpatient substance use and mental health disorders), plus homeless services and shelter.”

Holy Cross has had some concerns about whether Lynch’s arrest and alleged theft might deter future supporters, but the agency is hoping people will continue to contribute to it so that it can continue its mission.

“We are grateful for all those who have donated and helped us throughout the years, and we sure hope they will continue to stand by us in helping all the deserving people that come to us for help every single day,” Kretzschmar said by email. “One person’s misdeeds are not reflective of the many good hearts we have working diligently and tirelessly to help our clients every day.”

The case against Lynch is being prosecuted by Assistant United States Attorney Stephen Hiyama.

William Swor, one of the two attorneys representing Lynch, had no comment on the case at press time.