Less than 24 hours after the South Shore Press published an explosive investigation exposing years of missing financial filings and alarming audit red flags at a multi-million dollar nonprofit in NYS Governor Kathy Hochul's hometown, the organization’s Executive Director resigned, and now the agency is shutting down.
The rapid unraveling of the Seneca Babcock Community Association (SBCA) has stunned the other side of the state in Buffalo, with critics saying the speed of the collapse raises serious questions about what regulators and political leaders in Albany knew, and when they knew it.
On Wednesday, our newspaper reported that the taxpayer-funded nonprofit failed for years to file required audited financial reports with the New York State Attorney General’s Charities Bureau, despite laws requiring annual disclosures from large charities receiving public funding.
Public records reviewed by the South Shore Press showed filings appearing to stop after 2004 and not resume until 2020, when the organization submitted a report covering the 2017 tax year.
That filing contained troubling concerns from the very same accounting firm that produced the financial statement.
The audit attached to the report, prepared by accounting firm Bonadio & Co. LLP, issued what accountants call a “disclaimer of opinion,” meaning the auditors could not verify the nonprofit’s finances because the underlying records did not exist.
“Detailed accounting records have not been maintained and supporting data was not available,” the auditors wrote in the scathing financial document.
Accounting professionals say that kind of audit outcome is extremely rare.
“This is the kind of thing you learn about on the CPA exam,” one accountant familiar with the situation said to the South Shore Press after reviewing the report, but their private sector position prevented them from being publicly identified.
“In the real world you almost never see it because it means there were basically no records to audit.”
Within hours of the South Shore Press bombshell going live, the focus of our reporting, longtime Executive Director Brian Pilarski, resigned from his leadership role at the nonprofit. Pilarski, however, remains a sitting Democrat member of the Cheektowaga Town Board. He is also the Chairman of the Town of Cheektowaga Ethics Committee.
In a statement provided to local media following his resignation, Pilarski confirmed that the organization’s operations are shutting down almost entirely.
“Daycare is shutting down next week so parents have at least a week to find a new childcare center,” Pilarski said. “All other programs, youth after school, athletics, workforce development, pantry, senior citizens lunch and recreation, are ending tomorrow (Friday).”
The shutdown means the immediate loss of services for many low income families.
The sudden collapse of the nonprofit has also ignited political controversy because of Pilarski’s dual role as both the non profit's Executive Director and an elected Democrat official in Erie County.
Cheektowaga, where Pilarski serves on the Town Board, is one of the largest municipalities in the region and often viewed by political strategists as a bellwether for statewide elections.
The nonprofit itself sits just a short drive, roughly 12 miles, from Hamburg Town Hall, where Governor Kathy Hochul once served on the Town Board before she became Erie County Clerk, a member of Congress, and now Governor of New York State.
Despite the nonprofit missing required state and federal filings for more than a decade, there has so far been no public explanation from the New York Attorney General’s Charities Bureau, the New York State Comptroller, or the Governor's Office, about why enforcement action was not taken earlier.
Erie County Legislator Frank Todaro has now formally asked Attorney General Letitia James and State Comptroller Thomas DiNapoli to investigate the organization’s finances and compliance with nonprofit laws.
In letters sent earlier this week, Todaro warned that the situation could involve “fraud, waste, abuse, theft and mismanagement of taxpayer dollars.”
The controversy is already drawing comparisons to one of the largest nonprofit scandals in recent American history.
In Minnesota, the massive “Feeding Our Future” fraud scheme where the infamous "Somali Learning Center scandal" dropped, is believed to have siphoned hundreds of millions of taxpayer dollars through nonprofit programs.
That scandal forced Minnesota Governor Tim Walz to answer tough questions before Congress about how state regulators failed to detect the scheme sooner.
Now critics say troubling similarities are emerging in New York.
In both cases, nonprofit organizations receiving public funds appear to have operated for years despite serious financial reporting failures that regulators were supposed to catch.
And in Buffalo, the collapse came almost instantly once the issue was brought into the public spotlight by the South Shore Press.
Within a single day of the South Shore Press publishing our explosive investigation, the nonprofit’s executive director resigned and the agency announced it was shutting down major programs serving thousands of residents.
Following the our hard hitting reporting, the story quickly spread beyond print and into Western New York’s talk radio conversation.
Medal of Honor recipient and NewsRadio 930 WBEN host David Bellavia devoted a segment of his program to the South Shore Press investigation, telling listeners the situation surrounding the Seneca Babcock Community Association raised serious questions.
“It doesn’t look good,” Bellavia said on air, referencing the reporting that showed the nonprofit’s last publicly available IRS Form 990 dated back to 2017.
Bellavia questioned how an organization receiving millions of dollars in public funding could go years without filing the required federal disclosures.
“How do you go six years without filing a 990 form?” he asked listeners. “We’re talking millions of dollars.”
The decorated war hero and radio host also challenged the explanation offered by Pilarski, who said the lapse in filings was an administrative oversight.
“You’re telling me the only reason this happened is because the IRS didn’t send you a letter?” Bellavia said during the broadcast. “That’s the explanation?”
For Bellavia, the issue ultimately comes down to public accountability.
“We’re talking about taxpayer dollars,” he said. “And people deserve answers.”