Sept 4, 2019 By Allie Griffin
Board Members of a non-profit cemetery in Middle Village pocketed thousands of dollars meant for the cemetery upkeep, while complaining about a lack of funds, according to a suit filed Tuesday by New York State Attorney General Letitia James.
The suit claims that seven former and current board members of the nonprofit Lutheran All Faiths Cemetery racked up “millions of dollars in operating costs” to enrich themselves from at least 2014 onward, while the cemetery grounds fell into disarray.
The board members “exploited their positions at the Cemetery to draw fees, salaries, and loans from the Cemetery’s charitable assets while ignoring their basic fiduciary obligation to manage the assets under their control for the benefit of the Cemetery and its property,” the suit alleges.
Among the charges, Attorney General James claims the board members embezzled thousands, paid themselves exorbitant salaries and unauthorized retirement benefits and director fees, lent restricted funds to family members as mortgage “investments,” and ignored the outside auditor’s recommendation to curtail their spending.
The board chairman and former president Daniel Austin, Sr. made out with about $5.4 million in salary for the various positions he served at the cemetery from 1990 and 2014. He retired as president and CEO in May 2014 and received $900,000 in retirement pay, yet continued to work as a salaried chairman of the board for another five years.
In December 2018, Austin, Sr. told the Queens Daily Eagle that the crumbling graves and lack of proper upkeep at the 225-acre Lutheran All Faiths Cemetery was due to a chronic lack of cash. He told the newspaper that funds tied up for perpetual care couldn’t be used to maintain gravesites that haven’t been paid and doing so would mean committing a misdemeanor.
Yet Austin and the board continuously drained thousands and sometimes millions of dollars legally allotted only for perpetual care for other operating costs, according to the suit.
The mismanagement and embezzlement of the cemetery also involved Austin’s son Daniel Austin, Jr., who was appointed president after his father stepped down from the role. The son embezzled $63,000 in unapproved bonuses through the Cemetery payroll, according to the lawsuit.
To top it off, in a July 2018 board meeting, the mismanagement escalated to a physical altercation between board members and Austin Jr. in which he was in possession of a firearm, according to court documents.
Other board members used restricted cemetery assets to provide private mortgage loans to their close relatives, totaling nearly $1 million between 2015 and 2017, according to the complaint.
Attorney General James is seeking to remove the three current board members from their positions, recover any charitable assets lost or stolen, end further payments to board members and recover salaries previously paid to them.