By Donald H. Harrison
SAN DIEGO – Two former trusted employees of the Lawrence Family JCC—Nancy Johnson, 59, who had served as its chief financial officer, and Tamara Azizov, 62, who had served as its accounts payable clerk—pled guilty on Thursday, June 4, to charges including embezzlement, income tax fraud, and wire fraud in return for recommendations of reduced federal prison sentences from the U.S. Attorney.
Prison terms of 18 to 24 months for Johnson and 12 to 18 months for Azizov were recommended by the office of U.S. Attorney Laura Duffy, but it will be up to U.S. District Court judges to decide whether to accept the plea deal or to impose different sentences. Johnson is scheduled to appear Aug. 28 for sentencing by U.S. District Judge Dana M. Sabraw. Azizov will appear before U.S. District Judge Barry T. Moskowitz on Sept. 11.
Under the agreement, Johnson, an Escondido resident, will be required to make restitution for $412,289.64 she admitted to embezzling over a number of years from the JCC, and is responsible for $115,441.10 in income taxes that she would have been required to pay if her tax returns reflected the income she had received from her criminal activity.
Azizov, who lives in San Diego, is required to make restitution for $154,192.74 she stole from the JCC and is responsible for payment of $43,173.97 in taxes on her undeclared income.
Both women also will have to pay such other fines as may be assessed by the court.
According to Assistant U.S. Attorney Phillip Halperin, Johnson used the money she embezzled to pay for a stay at a resort in Maui, airfare to the Bahamas, shoes, tickets, and upscale dinners. At the same time, to make up for the money she was siphoning from the JCC, Johnson ordered JCC department heads to reduce their program expenses, Halperin said.
Azizov, in what Halperin described as “an entirely separate scheme unknown to Johnson,’ used the money she stole for thousands of dollars worth of clothing from Neiman Marcus, Nordstrom, Simone Perele lingerie and Anthropologie. She also spent $1,820 for sushi at Zip Fusion.
Johnson and Azizov admitted that they used JCC credit cards to pay for their personal expenses, and then disguised the nature of those expenses on various JCC accounting forms over which they had exercised responsibility.
“Johnson and Azizov were able to carry out the embezzlement by virtue of their access to the full range of the JCC’s financial records and accounts,” Halperin said. “On most occasions they would simply use the JCC’s credit cards to make personal purchases. In order to fool the JCC”s executive staff, auditors and bookkeepers they both (without knowledge of the other) falsely characterized their purchases as legitimate JCC expenses. At the end of the year, Johnson would then allocate her personal expense to the JCC departments that had not exceeded their budgets.”
Larry Katz, president of the Lawrence Family JCC, issued a statement on Thursday, June 4, that Johnson and Azizov “had been misappropriating funds for their personal and other unauthorized uses, through credit card charges hidden in program expenses.”
He said that the “misappropriation of funds was not detected by the independent audits conducted every year for the LFJCC by an outside accounting firm or the quality internal controls our agency had in place. Upon discovery, the LFJCC leadership took immediate steps to examine and scrutinize our processes, including an independent forensic audit. As a result, we have reinforced existing procedures and implemented several new accounting controls and practices to avoid, to the extent possible, any reoccurrence. Additionally, we have recovered a substantial portion of the misappropriated funds and anticipate receiving further restitution from the defendants.
“While it has not been easy to learn that people we came to trust for more than 20 years violated that trust, we can reassure our community that although significant, the embezzlement did not materially affect the LFJCC’s operations, level of services or our overall financial condition. The LFJCC is thriving and remains strong as it continues to provide the highest quality of programming and service for the community.”
U.S. Attorney Duffy said: “San Diego has many fine charitable institutions like the JCC. I will do everything in my power to insure that individuals who donate to these charities know that their funds are going to be used in an appropriate manner.”
FBI special Agent in Charge Eric S. Birnbaum commented: “While the FBI investigates many types of fraud, when charitable organizations are victimized by those it entrusts to safeguard its assets, it is profoundly disturbing. These defendants in this case stole money intended to help children and senior citizens to indulge their lavish lifestyles. The FBI remains committed to pursuing those who abuse their position of trust to unlawfully enrich themselves.”
Eric Martinez, Special Agent in Charge of IRS Criminal Investigation, said: “The defendants misappropriated funds from a local community center designed to enrich the lives of those it served. IRS Criminal Investigation will not stand still while criminals line their pockets with illicit proceeds, while community programs go underfunded. The defendants have overstepped their bounds feeling entitled to these funds.”
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Harrison is editor of San Diego Jewish World. You may comment to donald.harrison@sdjewishworld.com or post your comment on this website provided that the rules below are observed.
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