ACS insiders' $1M 'phantom-tot bilk' fake adoption busts
Cornell, Kati, Jennifer Fermino and Stephanie Cohen. New York Post, July 17, 2008.
Two top ACS officials were among four people charged yesterday in a million-dollar scheme to rip off the city's child- protection agency by funneling cash through fake adoptions of kids who didn't exist.
The Administration for Children's Services duo allegedly spent the last three years setting up the phantom adoptions and cutting checks for nonexistent computer services.
Calling the case a "weighty and tragic situation," Department of Investigation Commissioner Rose Gill Hearn called for a major overhaul of a system that allowed the scam.
She accused Nigel Osarenkhoe, supervisor of adoptions at the ACS payment services unit, and a second agency official, Lethem Duncan, of using the "great river of public money that flows through ACS" as a personal piggy bank.
In a disturbing twist, Hearn said investigators learned of the embezzlement scam during a year-long probe of the agency launched in response to the case of Judith Leekin, a Florida foster mother who allegedly abused 11 New York City kids in her care. Osarenkhoe was the ACS point person in that investigation.
The stolen cash was earmarked for orphaned, abandoned, and often abused kids, Hearn said.
A criminal complaint shows Osarenkhoe hatched the phony adoption plot at least as early as 2005, and recruited Duncan's help in finding people willing to pose as parents.
Osarenkhoe boasted to Duncan that "all he needs is a name, any name" to put in the ACS system in order to cut a check, US Attorney Michael Garcia said in announcing the charges of embezzlement, mail fraud and money laundering.
Stay Thompson, a foster-care worker with Concord Family Services in Brooklyn, snapped up the chance to become "foster mother" to a phantom child in exchange for a share of nearly $80,000 in checks, court papers charge.
At the same time, Duncan allegedly wrote a $375,000 check for computer equipment and services under a fabricated contract with Philbert Gorrick, owner of Contemporary Technologies Inc., which provided services to Concord.
Gorrick used his share to pay for a 2006 BMW, a 2006 Range Rover and $30,000 in rental payments at a doorman building, according to court papers.
The major break in the case came in March when a cooperating Duncan set up an additional, jaw-dropping $711,000 bogus transaction. The charges came one day after Leekin, 63, was sentenced to 11 years in prison for stealing more than $1.6 million from ACS, even as she tortured 11 disabled kids.
Stay Thompson (left) posed as a foster mom and ACS official Nigel Osarenkhoe, at court yesterday, made crooked payments in a scheme (flow chart) that netted another man this BMW, feds say.