Group’s Staffer Indicted on Count Of Embezzlement

By Marc Perelman

Published September 16, 2005, issue of September 16, 2005.
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A grand jury in New York has indicted a longtime employee of one of the country’s most storied and influential Jewish organizations for diverting at least $1 million from the company, the Forward has learned.

The employee, Donalde Fergus, worked in financial department of the American Jewish Committee. He was indicted August 24 for grand larceny in the first degree and could face a 25-year prison sentence.

Fergus could not be reached for comment.

According to the office of the Manhattan district attorney, which is conducting the investigation and pressed the charges, he pleaded not guilty.

Fergus’s lawyer could not be reached for comment.

Jeffrey Sinensky, the AJCommittee’s general counsel, told the Forward that in July the organization discovered that Fergus, who was in charge of payroll, had devised an “ingenious scheme” to divert money. Sinensky said that this scheme had been going on for years.

Founded in 1906, the AJCommittee historically has pushed for a strict separation of church and state, and has played a lead role in fighting antisemitism in the United States. In recent years, it has significantly increased its profile on Middle Eastern affairs and on other international issues. The organization has 280 employees worldwide and an annual budget of $37 million.

After Fergus was terminated from his job at the AJCommittee, the organization contacted the Manhattan district attorney’s office, Sinensky said. Fergus was taken in for questioning on July 13 and imprisoned after he admitted his guilt in a statement, according to Sinensky and Edison Alden, a spokesman for the Manhattan district attorney’s office.

“It was the conduct of one individual,” Sinensky stated. He added that AJCommittee officials acted swiftly, and that the organization’s board and staff members were kept informed of the investigation’s progress.

Fergus was first indicted August 12 for grand larceny in the second degree — which means a minimum diversion of $50,000 — based on testimony that he had embezzled about $450,000 during the past four years, according to Alden, the D.A.’s spokesperson. However, Fergus was indicted again in late August for grand larceny in the first degree, which means the total sum allegedly diverted had totaled at least $1 million.

Sinensky refused to divulge the actual amount. He said the destination of the funds is still unknown and remains the main focus of the D.A.’s ongoing investigation.

Alden said that Fergus would appear in court October 11.

The AJCommittee leadership informed board members and staff in writing about the incident back in July and pledged that it would tighten its oversight mechanisms.

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