Man sentenced for embezzling at least $2M from Palm Beach charity

Nov. 30--WEST PALM BEACH -- Before Paul Hughes retired after spending 12 years as a physical therapist at the Rehabilitation Center for Children and Adults, he repeatedly asked the pension administrator of one of Palm Beach's signature charities if his retirement money was safe.

"He lied over and over to me face-to-face," the 72-year-old Lake Clarke Shores resident told a federal judge on Thursday. "It was such a terrible fraud."

Instead of protecting the pension fund as promised, former insurance agent William Minor spent 22 years draining the account, leaving nearly 30 former employees without the nest eggs they were promised.

While Minor admitted he stole more than $2 million from the 78-year-old agency on Royal Palm Way, center officials said the total loss was nearly $5.8 million. The center tracked the losses back further than federal prosecutors and also included interest the money would have earned.

In addition to robbing former employees of their retirement money, Minor's thievery damaged the charity's good name, said attorney J. Cater Randolph, president of the center's board.

"He put our reputation at risk," Randolph told U.S. District Judge Donald Middlebrooks. The agency was formed as the Crippled Children's Society in 1940 to fight polio. "We're working to rebuild our trust with our donors," he said.

Randolph asked Middlebrooks to give the former center board member a lengthy sentence to punish him for his decades of crime and duplicity.

But while Middlebrooks agreed Minor's actions justified a harsh sentence, he said he couldn't ignore the 69-year-old former Lake Clarke Shore resident's serious health problems.

Instead of handing Minor the maximum 12-year sentence allowed under federal sentencing guidelines, Middlebrooks ordered him to spend nearly 3 1/2 years behind bars. He allowed Minor to remain free until Jan. 28 when he must report to prison.

Sitting in a wheelchair as a result of a stroke and other unspecified ailments, Minor apologized for his actions. "It's my responsibility. No one else," said Minor, who pleaded guilty in September to a charge of mail fraud.

But, according to a lawsuit the center filed in hopes of recouping the pension money, Minor had been accused of similar misdeeds before. In 1994, the former insurance agent was sued for fraud by the South County Mental Health Center for mishandling its pension fund, according to the recent suit.

The Delray Beach treatment center claimed Minor churned its investments and insurance policies to boost his commissions. The mental health center's lawsuit was settled in 1995 and Minor was fired by the insurer he represented, according to the rehabilitation center's suit.

The mental health center sued Minor at about the same time he joined the rehabilitation center's board and volunteered to use his expertise as an insurance agent and financial planner to handle its pension fund. His fellow board members didn't find out about the allegations made in the mental health center's lawsuit until April 2016. That's when they discovered the rehabilitation center's pension fund was nearly empty.

In what prosecutors described as a carefully crafted scheme, Minor for years produced phony documents to convince rehabilitation center officials and their auditors that the pension fund was in good health.

Instead, the baseball fanatic, who coached his sons who were standouts at Lake Worth Christian School, was using the fund as his personal piggybank, prosecutors said.

Initially, he would give Pam Henderson, executive director of the center, papers to sign so Transamerica Life Insurance Co. would issue a check for a former employee, said Assistant U.S. Attorney Adrienne Rabinowitz. But, instead of distributing the check to the former worker, Minor pocketed the cash.

Later, Minor came up with a way to circumvent Henderson. He formed a company, Trustees for Rehabilitation, had Transamerica make out the checks to his new venture and simply cashed them, Rabinowitz said.

According to the center's lawsuit, the fraud was obvious. In one nine-month period, Minor requested $160,000 in multiple lump sum payments for one former employee. In another case, he received $1 million in payouts for an employee who made $44,000 annually and had only worked for the center for 12 years.

Transamerica should have realized what was happening, it says in the lawsuit. "Transamerica has an obligation to properly supervise its agents to avoid this type of situation," the suit claims.

A spokesman for Transamerica said the company doesn't comment on pending litigation.

Randolph said he is hopeful the lawsuit will be successful, allowing the center to replenish the pension fund. Minor is also expected to be forced to pay restitution.

But, Rabinowitz said, the money is gone.

As for Hughes, he and his wife, Debbie, said they aren't enjoying the retirement they envisioned. After receiving what Hughes called a "small lump sum payment" shortly after he retired in 2016, he has received nothing. Other employees haven't gotten a dime. While center officials said they hope to begin sending out checks soon, the wait is difficult, employees said.

"I planned my retirement based on the money I was supposed to receive," Hughes said. "The center was good to me. But you have to wonder how it lasted so long."

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