For two months the director and board of the Coalition for Compassion and Justice (CCJ) had been bracing for release of the news that the group’s former finance director, Sheena Holmes of Paulden, had allegedly embezzled more than $111,000 from the group’s cash-based income. The Prescott Police Department issued a press release after officially charging Holmes, arresting her and placing her in lockup at the Yavapai County Jail. The court set a bond of $50,000.
CCJ Executive Director Allison Lenocker says she can’t comment directly on the ongoing investigation, but that she was “emotional” about the nature of the theft. The missing funds were from clients who paid to stay in the group’s shelter, as well as rental tenants, many of whom had been homeless. “To think that that money is not being used for our mission is gut-wrenching,” Lenocker said. “The money was stolen from people who have nothing.”
Lenocker sent a newsletter to stakeholders explaining the situation and outlining everything the organization is doing to prevent future issues and recoup the stolen funds. “As soon as we had knowledge of this situation, I want to assure the public that I took immediate action to protect the organization and safeguard its remaining assets,” Lenocker wrote. “Additionally, I have put in place protective factors that will prevent such incidents from happening in the future. These internal and external safeguards were implemented immediately.”
While the theft is a blow to the organization, a positive aspect to come out of it is the strength of the outpouring of support for CCJ. Lenocker said she has been overwhelmed by the calls, emails and comments from donors and community leaders expressing their concerns and standing by her and CCJ during a difficult time.
Carole Benedict, executive director for USVets, said she called Lenocker to express her support for two reasons. “First, it was disappointing to hear someone would do that and victimize the organization in that way,” Benedict said. “Second, I was outraged because nonprofits work hard, and stealing from the most vulnerable people in the community is the worst.”
Benedict said she thought Lenocker and CCJ handled the situation appropriately by waiting for the charges to be filed and contacting stakeholders immediately afterward. “I commend them for their quick response and for working with the organization and the police in the investigation,” Benedict said. “Allison did the right thing, and that’s why it’s important to have transparency so people can be aware.”
Ross Schaefer, executive director of Flagstaff Shelter Services, said, “It’s definitely everyone’s worst nightmare, in the top five things you don’t want to see as a nonprofit. There’s a lot of responsibility to agencies and clients and the community that you serve.” Schaefer called Lenocker to reach out and encourage her, telling her, “you’re going to get through this and come out stronger on the other side.”
Incidents like embezzlement are rare among nonprofits because of the “very strong policies and procedures in place by federal funders to make sure organizations are fiscally secure” and deserving of public trust, Schaefer said. Tapping housing-grant funds requires years of evidence from agencies that they are already raising money and doing the work required to help people. Among other grants CCJ recently received $200,000 from the Arizona Housing Fund and $87,603.75 from the Arizona Housing Coalition.
The missing cash was drawn from CCJ programs that include the Second Chance Housing program rental income, the Second Glance Thrift Store, and the Stagger Straight Shelter for emergency housing — not grants or direct donations, which are closely tracked.
Lenocker said the monetary loss doesn’t affect the income from grants or foundations, but that it’s still a significant amount that could have built a manufactured home in the group’s Chino Valley housing development, Paloma Village, for a family to live in. CCJ has delayed development of the project so that it can ensure its reporting to funding agencies is accurate following an audit.
“It’s not just money that’s been stolen, it’s lives, it’s hope, it’s dignity,” Lenocker said.
A history of bad checks, fraud
Holmes has many charges on her record outlining financial malfeasance of various kinds. In 2015 she was charged with writing bad checks worth over $5,000, for which she paid restitution and fines on July 5 of this year. In 2016 and 2018 she was charged with writing bad checks worth under $5,000, and paid restitution. In 2019 she was charged with a felony for fraudulent use of a credit card. The case was closed in Prescott and deferred to another court, and it’s unclear whether those charges were dropped or reduced and restitution made. Court records show she filed for bankruptcy in September 2022, and that case was closed on July 7 this year.
CCJ fired Holmes as soon as she became a suspect. In the course of the investigation police discovered an allegation that Holmes had embezzled $33,000 from a company she worked for between April '22 and May '23.
The nonprofit is seeking to recover the stolen funds and working with its insurance company to see if it can recoup any money that way. Court cases can take months or years, Lenocker notes.
In the meantime, Lenocker says she thought it important to get the word out about the allegations so no other nonprofit falls victim. “I would never want anything like that to happen to anyone else.”