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Charity Ex-Chief Admits to Theft

Courts: Former head of N.Y.'s Hale House gets probation. Husband also pleads guilty in the case.

July 04, 2002|JOHN J. GOLDMAN | TIMES STAFF WRITER

NEW YORK — A judge Wednesday sentenced Lorraine E. Hale, the former president of Hale House, to five years' probation after she admitted siphoning thousands of dollars from the nationally known charity for children.

Her husband, Jesse L. DeVore, pleaded guilty to attempted forgery and received the same sentence.

In exchange for the guilty pleas, prosecutors did not press for prison time. The couple also agreed to return $600,000 to the Hale House in Harlem.

During the proceedings in New York Supreme Court in Manhattan, Justice Herbert Altman asked Hale, the 76-year-old daughter of the organization's founder, Clara Hale, whether she had used "thousands of dollars for personal expenses and other non-charitable expenses."

"Yes, I did," said Hale, who pleaded guilty to larceny.

Altman then turned to DeVore, 70, who admitted shifting hundreds of thousands of dollars into a bank account for his personal use.

"Did you do that?" Altman asked. "Yes," DeVore answered.

Both were forbidden to run another charity and could face prison time if they fail to return the funds.

"This closes an unfortunate chapter in the otherwise extraordinary history of Hale House," the charity's board Chairman Zachary W. Carter, a former federal prosecutor, said in a statement.

The convictions culminated multiple investigations into the charity, which over the last 30 years has provided a home in Harlem for more than 1,800 children, many of whose parents took drugs and had contracted AIDS. Its founder, known as Mother Hale, drew widespread praise, including from President Reagan, who called her an "angel" and "national heroine."

Lorraine Hale took over the Hale House after her mother died at age 86 in 1992.

In 2000, members of the charity's board of directors criticized Hale for spending lavishly on antiques and furnishings for her office, while leaving the children in far lesser surroundings.

That turned out to be the least of the problems.

After a series of articles in the New York Daily News and an investigation by Kroll Inc., a risk consulting company hired by Hale House's directors, New York state Atty. Gen. Eliot Spitzer in February indicted Hale and DeVore for allegedly stealing more than $700,000 from the charity.

Court papers charged that Hale diverted almost $250,000 in charity funds to a secret checking account that was never disclosed in the organization's records. Hale also was charged with grand larceny for cashing in a $488,000 insurance policy owned by Hale House on her life and shifting the money to her private bank account.

Part of the money was used to make lavish improvements on the suburban home of Hale and her husband, finance a play DeVore produced and pay the college tuition of Hale's nephew, the indictment alleged.

Hale's lawyer, William Dowling, labeled the embezzlements "an aberration" and said the couple were spared prison time because of their age and poor health.

He said authorities had seized $100,000 of their funds, and after pledging to return about $600,000 to Hale House, they were "destitute."

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