A major investigation by the South Shore Press into troubling financial irregularities at a government-funded nonprofit has triggered a rapidly unfolding political response in Albany, including a formal request from a Long Island legislator urging state officials to launch a sweeping investigation into similar agencies across New York.
Less than 24 hours after the South Shore Press published its investigation into the Seneca Babcock Community Association, the Erie County nonprofit’s longtime executive director resigned, and the agency announced it would shut down most of its operations.
The sudden collapse has intensified scrutiny of the organization and raised broader concerns about oversight of nonprofit agencies that receive millions of dollars in taxpayer funding.
Public records reviewed by the South Shore Press showed the nonprofit failed for years to file required audited financial reports with the state Attorney General’s Charities Bureau, despite laws requiring annual disclosures from large charities receiving government funding. Records appeared to stop after 2004 and did not resume until 2020, when the organization filed a report covering the 2017 tax year.
That filing included an extraordinary warning from the accounting firm that prepared the financial statement. The audit from Bonadio & Co. LLP issued what accountants call a “disclaimer of opinion,” meaning the auditors could not verify the organization’s finances.
“Detailed accounting records have not been maintained and supporting data was not available,” the auditors wrote.
Within hours of the South Shore Press report being published, Executive Director Brian Pilarski resigned. Shortly afterward, the nonprofit announced it would begin shutting down programs that served thousands of residents.
The developments prompted Assemblyman Joseph DeStefano, a Republican who represents the Third Assembly District, to send a formal letter to Attorney General Letitia James calling for a broader investigation.
“In light of the closure of the Seneca Babcock Community Center, I am writing to encourage you to investigate similar organizations throughout New York State to ensure that proper reporting guidelines are being followed,” DeStefano wrote. He noted that the timing of the nonprofit’s collapse after the newspaper’s investigation raised serious concerns.
“The fact that the organization’s executive director resigned soon after reporting irregularities were exposed by a local newspaper, and that the nonprofit announced it would shut down major operations almost immediately afterward, raises serious concerns that warrant a thorough investigation to rule out potential criminal behavior,” he wrote.
The Assemblyman warned that the situation may point to a larger systemic problem. In Minnesota, a massive fraud scheme known as the “Feeding Our Future” scandal siphoned hundreds of millions of dollars through nonprofit programs intended to serve vulnerable communities. Investigators later determined that the total amount of fraud connected to the case could reach into the billions.
“The multi-billion-dollar fraud uncovered in Minnesota gives us reason to believe that similar schemes could be operating in New York,” DeStefano wrote, noting that New York spends far more on social service programs than Minnesota, raising the possibility that the scale of potential abuse could be even greater.
“If we confirmed that one major nonprofit in Western New York did not file audited financial reports as required by law with your office, how many more have not done the same across our state?” DeStefano wrote.
DeStefano said the issue ultimately comes down to protecting taxpayers.
“New Yorkers deserve confidence that funds intended to serve children, seniors, and struggling families are being used responsibly and transparently,” he wrote. “It is incumbent upon state officials to assure the public that taxpayer dollars are not being stolen.”
The Assemblyman copied Governor Kathy Hochul and State Comptroller Thomas DiNapoli on the request, urging their offices to coordinate with the Attorney General on a comprehensive review of nonprofit organizations receiving significant public funding.
“At a minimum,” DeStefano wrote, “this critical and alarming situation highlights the need for a comprehensive and thorough review of nonprofit organizations across New York to ensure that they are complying with financial reporting requirements and properly safeguarding taxpayer dollars.”
With the Seneca Babcock organization now shut down and questions mounting about years of missing financial records, DeStefano said the investigation should move quickly.
“We must root out fraud, waste and abuse wherever it exists,” he wrote, “and ensure that every dollar intended to help vulnerable New Yorkers is accounted for.”