DETROIT – A Grosse Pointe Park resident was sentenced today to one year in prison and six months at a halfway house on wire fraud charges in connection with obtaining by fraud, embezzling, and stealing the funds of the Holy Cross organization, a large charitable organization based in Clinton, Michigan, that receives federal funds, announced United States Attorney Dawn N. Ison.
Joining in the announcement was Acting Special Agent in Charge Joshua Hauxhurst, Federal Bureau of Investigation, Detroit Division.
Sentenced was John R. Lynch, 57. In sentencing Lynch, United States District Judge Bernard A. Friedman also ordered Lynch to serve three years of supervised release and pay restitution in the amount of $247,867.75.
According to court records, in March 2012 Lynch became the CFO of the Holy Cross organization, and in January 2015 he became its CEO. Holy Cross was established in 1948 when Boysville of Michigan was incorporated under the auspices of the Roman Catholic Archdiocese of Detroit. Boysville of Michigan later became Holy Cross Children’s Services, which is now known as Holy Cross Services. The Holy Cross organization provides welfare services to disadvantaged children and adolescents, behavioral health services to adolescents and adults, and a number of support services to the homeless. Holy Cross services are provided mostly to individuals in Southeast and Mid-Michigan. The Holy Cross organization also includes the Samaritan Center, a large community resource center that provides healthcare, employment services, and other forms of support to residents of Detroit’s east side.
At the time of his plea, Lynch admitted that when he was Holy Cross’s CEO, he used Holy Cross funds to pay for repairs to his own cars, install a new roof on his house, pay down his personal mortgage balance, and make payments on a personal American Express account. Lynch also used Holy Cross funds to pay his own consulting company, JKL Consulting, and to pay another company hired to provide security services at the Samaritan Center, First Nation Security, a company ostensibly controlled by a relative but actually controlled by him. Lynch attempted to justify some of these payments with bogus invoices. In addition, Lynch used his corporate Holy Cross American Express card to pay for goods and services of a personal nature, such as lodging at resorts, dining at restaurants, travel, and purchases at apparel and department stores.
Altogether, Lynch embezzled approximately $248,000 of Holy Cross’s funds. Moreover, apart from that, he violated Holy Cross’s conflict-of-interest policy by steering Holy Cross business to companies that he and/or close relatives controlled.
Holy Cross received federal funds under the National School Lunch Program and the School Breakfast Program. It also received federal funds under Title IV-E of the Social Security Act, which pays for foster care and provides adoption assistance and guardianship assistance.
The case was prosecuted by Assistant United States Attorney Stephen Hiyama. The investigation was conducted by the Federal Bureau of Investigation.