Earlier today, Senior U.S. District Judge Edward R. Korman sentenced Waf Abboud to 33 months in prison in federal court in Brooklyn. As part of the sentence, Judge Korman also ordered Abboud to forfeit $836,000 and pay $1,415,000 in restitution to Human First, Inc. (Human First), a non-profit agency that Abboud led for more than five years. Abboud was convicted after a two-week jury trial in July 2019 of theft from programs that receive federal funds, bank fraud and conspiracy to commit those crimes.
Breon Peace, U.S. Attorney for the Eastern District of New York, announced the sentence.
“The theft of taxpayer dollars intended for youth with developmental disabilities to pay for vacations, cosmetic surgery and luxury vacations is shameful,” said US Attorney Peace. “Today, the defendant was held accountable for betraying the most vulnerable among us who were entrusted with the job and for treating the nonprofit’s bank accounts as if they were her own.”
Mr. Peace thanked the New York Federal Bureau of Investigation Field Office for its investigative work on the case.
From January 2011 until her termination on May 27, 2016, Abboud was the executive director of Human First, a nonprofit corporation that provided services to individuals with autism and other developmental disabilities. In this role, Abboud exercised almost complete control over the charity’s finances. During Abboud’s tenure, Human First received tens of millions of dollars annually from the New York State Office of Developmental Disabilities, which is largely funded by Medicaid. The money was paid to Human First in support of its mission to provide residential, rehabilitation and other services for youth with developmental disabilities.
Abboud entered into an agreement with co-defendant Marcelle Bailey that caused Abboud to pay Human First Bailey’s company, MPB Management Services LLC (MPB), approximately $16,000 per month in alleged “consulting” fees. Bailey deposited about half of each monthly payout into bank accounts controlled by Abboud, who used the money to fund a lavish lifestyle, including expensive international vacations, visits to luxury spas and high-end beauty salons and restaurants, and elective cosmetic surgery. Abboud also withdrew approximately $120,000 in cash from the accounts and transferred tens of thousands of dollars to an overseas account. Between May 2011 and February 2016, Abboud stole a total of approximately $420,000 through the MPB embezzlement scheme.
Abboud also conspired with co-defendant Rami Taha to steal more than $400,000 through a scheme in which Abboud intentionally issued overpayments to contractors who performed work on Human First properties with the knowledge that the overpayment would be returned to her. The overpayments were concealed using inflated invoices submitted to Human First, and payments to Abboud were concealed by transferring funds through a number of fake bank accounts before finally being deposited into accounts controlled by Abboud. Abboud used the stolen money to finance the down payment and renovation of her residence. In order to conceal the true source of the funds, Abboud lied to her mortgage lender and falsely claimed that the funds were payment for a settlement she received for damage caused to her previous home.
Bailey pleaded guilty to embezzlement and bank fraud in December 2017 and was sentenced to 33 months in prison by Judge Korman in August 2021. Taha pleaded guilty to embezzlement in May 2019. A fourth defendant, Arkadiusz Swiechowicz, pleaded guilty to obstruction of justice in September 2018. Taha and Swiechowicz are awaiting sentencing.
The government’s case is being handled by the office’s public integrity division. The prosecution is led by Assistant US Attorneys Robert Polemeni and Turner Buford. Assistant U.S. Attorney Tanisha Payne of the Bureau’s Asset Forfeiture Division is handling the forfeiture matters in this case.
EDNY Docket No. 16-CR-396 (ERK)