Accountant For Harvard Hillel Arrested After Nearly $800,000 Disappears

To add to what already has been a bad year for fraud at Jewish organizations, Harvard University’s Hillel announced that it had lost nearly $800,000, and a former accountant has been accused of diverting funds into his personal account.

William O’Brien was indicted July 6 on 17 counts in connection with the five-year, $780,000 fraud.

The incident was another reminder, after Bernard Madoff’s massive Ponzi scheme, of the vulnerability of funds held by not-for-profits. Bernard Steinberg, president and director of Harvard Hillel, stressed in an e-mail to the student community that the incident served as a teachable moment.

Harvard Hillel used the missing funds as a jumping-off point for a “thorough review” of its financial operations, conducted by an outside team of financial experts, the July 6 e-mail said.

“With this guidance, we have strengthened our business processes, internal control and oversight of all financial transactions in order to safeguard the assets of the organization and prevent similar situations from occurring in the future,” the organization wrote.

O’Brien, who handled Harvard Hillel’s accounting and bill payment, came to the university in 2003 as a contract worker with InSource Solutions.

According to the Massachusetts Attorney General’s Office, Steinberg discovered the money was missing when American Express called him to inform him that his corporate account would be closed after not being paid. After an internal investiagation, Steinberg alleged that O’Brien had funneled payments from the group’s corporate account into a separate account in his own name.

At that point, in October 2008, Hillel referred the matter to the Attorney General’s Office, which began its own investigation.

Harvard Hillel spokeswoman Melissa Monahan said that the organization hopes to regain at least some of the funds, potentially through civil suits. Despite the fiscal losses, Monahan said Hillel anticipates it will be able to continue operations uninterrupted.

“The organization has not been forced to curtail programs and services as a result of the fraud,” she said.

A press secretary for the Attorney General’s Office said that the arrangements for O’Brien’s trial have not yet been set.