Thursday, October 24, 2013

Corruption: Former Treasurer of Catholic Charity Charged in Fraud Scheme

U.S. Attorney’s Office 

Southern District of Florida

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the arrest of Hershel F. Smith, Jr., 80, of Ponte Vedra, Florida. Smith is charged with devising a scheme to defraud a charity from 2005 to 2012. The indictment charges nine counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Smith made his initial appearance yesterday before U.S. Magistrate Judge John O’Sullivan.

According to the indictment, Smith was the treasurer of Malta Projects of Southeastern Florida Inc. (Malta Projects), a non-profit corporation associated with the Order of Malta, a lay religious order of the Roman Catholic Church. Among other things, the Order of Malta and its associated organizations administer and fund charitable activities to serve the sick and the poor.

According to the indictment, Smith devised a scheme to unlawfully enrich himself by making material omissions and materially false and fraudulent representations regarding monies Smith withdrew from the Malta Projects bank account for his own benefit and for unauthorized purposes. Smith was an authorized signer of the Malta Projects bank account and also received the bank statements. According to the indictment, from December 2, 2005 through September 18, 2012, Smith withdrew money through interstate wire transfers, interstate electronic payments, and other means from the Malta Projects bank account for purposes unrelated to Malta Projects and for his personal benefit. Smith concealed his conduct by providing false financial summaries to Malta Projects as well as to the Order of Malta, American Association (American Association). Smith also submitted altered bank statements to the American Association.

If convicted, Smith faces a maximum sentence of 20 years in prison on each count.

Mr. Ferrer commended the investigative efforts of the FBI. This case is being prosecuted by Assistant U.S. Attorney Ana Maria Martinez.

An indictment is only an accusation and defendants are presumed innocent until proven guilty.