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Authorities: Nonprofit Exec. Used $1M In City Funds To Pay For LI Home, Car

NEW YORK (CBSNewYork) -- A Long Island couple is now facing fraud charges after being arrested for allegedly using almost $1 million in city money designated for nonprofit organization contracts to make personal purchases.

U.S. Attorney Preet Bharara and Commissioner of the NYC Department of Investigations Mark Peters allege that United Block Association Executive Director Kwame Insaidoo and his wife Roxanna Pearson, of Bay Shore, misappropriated $953,875 in city funding to the nonprofit to pay off loans, buy a luxury car, make mortgage payments on their Long Island home, as well as other expenses.

United Block is a nonprofit which provides meals for the elderly, and has secured several contracts with New York City to operate in four senior centers on the Upper West Side.

"They stole money out of the mouths of New York's elderly," Peters told 1010 WINS' Darius Razdius. 

The charges allege United Block to have overcharged the City for nonprofits' purchases of food and other supplies for the contracted senior centers. According to a statement released by the U.S. Attorney, a report shows United Block may have overreported these claims by 500 percent.

"Very serious criminal conduct, and it's exactly the kind of thing that the Department of Investigations every day is rooting out," Peters said.

A DOI investigation also revealed that Insaidoo allegedly embezzled funds from United Block into undisclosed accounts, including one for an alleged shell corporation.

The U.S. Attorney also claims Insaidoo, 59, allowed for United Block to continue to pay Pearson, 62, after the nonprofit terminated her in 2012 due to violations of the City's anti-nepotism policies.

The couple is charged with conspiracy to commit wire fraud, wire fraud, embezzlement from a federally funded program and money laundering -- each which result in up to 20 years in prison if convicted. The couple is also charged with conspiracy to embezzle from a federally-funded program -- which leads up to another five years if convicted.

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