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6 accused of mismanaging $1 million in charity funds
by Jo Ann Zuniga
Houston Chronicle; Houston, Tex.; May 15, 1986

After an investigation of a charity for multiple sclerosis research, the state attorney general has filed a lawsuit accusing six of the charity's officers of mismanaging more than $1 million of its assets.

Attorney Ron Sommers, appointed receiver to check the charity's finances, filed the lawsuit Wednesday saying officers of Action for Research into Multiple Sclerosis of America had granted only $75,000 to research while an average of $1,870 per day had been spent on administrative expenses.

``By March 1986, only $100,000 remained of the $1.2 million ARMS had received,'' Sommers stated.

ARMS was initially funded with more than $1 million raised from a 1983 concert tour partly organized by former ARMS officer and singer Ronnie Lane, who now lives in Austin and is diagnosed to have multiple sclerosis.

The lawsuit names Lane, former ARMS Director Mae Nacol and former officers Barbara Leigh Hunt, Stanley Jacubowski, Dr. Jennis Tucker and Carol Kent.

The plaintiffs include Phillip James, a former ARMS board member who tipped investigators to possible wrongdoing.

The lawsuit said Nacol, an attorney and ARMS director from Sept. 20, 1984, to Nov. 6, 1985, received at least $236,833 for salary, legal retainers, reimbursements and purchase of a 1972 Lincoln limousine.

Neither her salary nor other reimbursements and receipts were authorized by the ARMS directors, the lawsuit said.

Hunt, ARMS president from Sept. 20, 1984, until her termination last December, received at least $86,433 during that time, including salary, purchase of a Jeep Wagoneer and non-authorized reimbursements.

Kent, ARMS vice president and executive committee member from Sept. 21, 1984, through July 2, received at least $26,795 in salary and $925 in expense reimbursements, the lawsuit said.

Lane, an ARMS director from Sept. 24, 1984, through Dec. 30, 1985, received $5,000 in consulting fees, $4,278 in rents, $3,018 for personal expenses and $2,000 worth of unidentified disbursements.

The lawsuit accused the defendants of fraud and self-dealing and requested the court impose a trust upon any assets Nacol, Hunt, Kent and Lane possess as a result of their transactions with ARMS.

The lawsuit also requests that the charitable assets wasted must be returned and damages assessed for the harm suffered.''

However, Nacol has filed an intervenor lawsuit questioning the attorney general's authority to have ARMS placed under receivership.

A hearing on her lawsuit is scheduled for 11 a.m. May 19 before state District Judge Louis Moore.

 

 


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