Providence Plan chair: Tip that employee had ‘significant gambling losses’ led to discovery of forged checks

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PROVIDENCE, R.I. (WPRI) – A tip that the former finance director for The Providence Plan had suffered “significant gambling losses” led the organization to discover “hundreds of thousands of dollars” were missing from its coffers, according to the chairman of the nonprofit’s board of directors.

In a letter to supporters, board chairman Richard Spies said outside lawyers hired by the organization to review several questionable expenditures confirmed that checks were forged by an employee and “the employee was also in a position to cover his tracks through various accounting entries.”

“This is a challenging time for us at The Providence Plan, but we are committed to moving forward in a straightforward, transparent manner,” Spies wrote in the letter.

Spies did not name the employee accused of the crime and no criminal charges have been filed, but The Providence Plan has confirmed previously that finance director Charles Denno was fired after admitting to the organization’s attorneys that he stole money. The Rhode Island State Police has confirmed a separate investigation is underway.

Denno did not respond to a request for comment Monday.

The organization announced last week that executive director Pat McGuigan had resigned. Jim Berson is now serving as interim executive director.

Spies said the organization hired New York-based law firm Brown Rudnick LLP to review its finances. Justin Weddle, a former assistant United States attorney, was among the lawyers who worked on the review.

Founded in 1992, The Providence Plan is a 501(c)3 nonprofit that was established to assist with the “preparation of a comprehensive strategy for alleviating poverty in the capital city of Providence,” according to annual corporation filings with the secretary of state’s office.

The organization’s board of directors is comprised of a who’s who list of public and private sector leaders, including Macky McCleary, the administrator of the R.I. Division of Public Utilities; Gonzalo Cuervo, chief of staff to Secretary of State Nellie Gorbea; Stephen Hourahan, a former advisor to former Gov. Lincoln Chafee who now works for Family Service R.I.; attorney and former City Councilman Malcolm Farmer III; Providence School Supt. Chris Maher and Nicole Pollock, chief of staff to Mayor Jorge Elorza. Five of the board’s members are appointed by the governor, five by the mayor and five by the board.

The Providence Plan reported $8.4 million in revenue and $7.8 million in expenses between July 2013 and June 2014, according to its most recent IRS Form 990.  The organization, which accepts contributions from federal, state and local agencies, reported $7.3 million in government contracts during the same period.

Denno’s compensation package totaled $98,058 for an average of 35 hours per week during the 2013-14 fiscal year, tax records show. McGuigan earned $159,301.

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Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan

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