Wellcore: Youth Prevention Grants Paid Family Bills

The owner of Wellcore, Inc. agreed to pay $500,000 over forged coalition signatures and personal expenses in SAMHSA grants from the Substance Abuse and Mental Health Services Administration. The case involved coalition signatures forged by the nonprofit’s owner and a former Wellcore official. In her settlement agreement, the nonprofit’s owner admitted that Wellcore submitted forged community representatives’ signatures and that she used grant funds for family expenses. Money intended to prevent youth substance use paid for a family member’s legal defense and gym memberships.

What the Drug-Free Communities Grants Required

Drug-Free Communities Support Program grants provide resources to community coalitions working to prevent youth substance use. Wellcore, a nonprofit based in Suffern, New York, secured and administered these grants. Its role put it on both sides of the funding process: preparing applications for coalitions and administering the money awarded to them.

As the Justice Department explains, a community coalition brings together leaders representing twelve sectors to address local prevention needs. The application required copies of signed agreements from representatives of each sector. Each signature was supposed to show that the person had agreed to represent that part of the community.

These were federal assistance awards for community prevention work. Wellcore applied to the Substance Abuse and Mental Health Services Administration on behalf of the coalitions and then managed their awards. The signatures therefore answered a concrete question about participation: had the people presented as representatives actually agreed to serve?

SOCASA’s Application Included Signatures With Wrong Names

In the admissions described by the Justice Department, Wellcore forged sector representatives’ signatures for a 2009 grant application on behalf of South Orangetown Community Awareness of Substance Abuse, known as SOCASA. The forged signatures included those of a local business owner, a physician and a school principal.

The business owner’s signature used the wrong first name. The physician’s surname was misspelled. These were signatures attached to an application that claimed the people had agreed to represent their sectors in a community coalition.

Even the names were wrong.

The owner admitted that Wellcore sent in the forgeries to make it look as if these people had agreed to serve. SOCASA received the grant, and Wellcore administered it. Wellcore subsequently renewed the grant on SOCASA’s behalf in 2011, 2013 and 2015.

For a coalition member, the important connection is between the agreement attributed to a community representative and the version submitted to the government. The signature supplied apparent consent. The application carried that appearance into the funding decision.

SUCASA’s Application Repeated the Forgery

The owner’s admissions also covered a 2015 application to the agency for Suffern United Coalition Against Substance Abuse, known as SUCASA. Wellcore attached forged signatures attributed to a law-enforcement official, a physician and a school guidance counselor.

Again, Wellcore sent in the forgeries to make it look as if those people had agreed to serve as sector representatives. SUCASA received the grant, which Wellcore administered.

Personal Expenses in Federal Grants

The owner admitted using $15,000 from SOCASA’s youth-prevention grant to pay for a family member’s criminal defense in a personal matter. She also admitted spending thousands of dollars from Drug-Free Communities grants on gym memberships for herself and her immediate family.

Here, it paid for the administrator’s family to go to the gym.

The release separately describes evidence the owner provided about a former Wellcore affiliate’s spending while affiliated with the nonprofit. Those examples included home furnishings, a child’s day camp and birthday party, home-improvement work, personal travel and a swim-club membership.

The owner’s admissions also described Wellcore officials’ access to the SOCASA and SUCASA funds and spending at several restaurants in Albany.

What the Grant Administrator Paid

In announcing the grant fraud settlement, the Justice Department said the owner paid far more in damages and penalties than she misappropriated.

The Justice Department announced the owner’s settlement on April 1, 2024. The Department of Health and Human Services Office of Inspector General and the U.S. Attorney’s Office for the Northern District of New York investigated the scheme together.

A Completed Form Can Conceal a Broken Control

A signature requirement can look satisfied when the underlying consent has been invented. Wellcore’s applications show why the content of a completed form matters: the required agreements appeared in the submission, but the signatures were forged.

The 2019 Journal of Forensic and Investigative Accounting study Unique Characteristics of Management Override Fraud Cases compared fraud involving management’s override of controls with fraud involving a lack of controls. Within those fraud cases, stronger anti-fraud environments, including audits and written policies, were associated with a greater relative likelihood of management override. The paper explains its interpretation:

Unique Characteristics of Management Override Fraud Cases, Journal of Forensic and Investigative Accounting, 2019

For us, that distinction directs attention to the people who can make a form appear complete. In the Wellcore matter, the administrator supplied the supposed evidence of community participation and then administered the money.

The Same Spending Problem in Research Grants

Personal expenses also appeared in the grant allegations against Northwestern University. In its cancer research grant settlement, the university agreed to pay $2.93 million over allegations involving improper charges to federal cancer research funding. The alleged expenses included personal travel, meals and consulting payments to unqualified relatives. A former purchasing coordinator brought the whistleblower case.

That case concerns a different grant program, but the spending question is recognizable: what did the federal award fund, and whose expenses did the account actually pay? The person who knows why a purchase was made can explain something an account label alone cannot.

What Proof Do You Need as a Whistleblower?

For a case about forged coalition signatures and diverted grant funds, the useful evidence connects the agreement, the application and the spending. We work with you to understand what the submitted signature page claimed, who prepared it, who knew whether a representative had agreed to serve, and how the grant money was used.

Working out how your knowledge fits that evidence is what we do with you.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We assess how your knowledge of the grant and the spending can support that kind of case.

You Know Who Signed and What the Grant Paid

If you recognize a forged coalition agreement or personal bills charged to a youth-prevention grant, speak to one of our Whistleblower Experts about what you saw. We build your strongest grant fraud whistleblower case with you and bring in federal grant fraud whistleblower lawyers who understand false applications and misuse of grant funds. From the first conversation through the case, we stay beside you and keep the focus on what your knowledge can establish.