Continued probing into the inner financial workings of Peter Young Housing, Industry and Treatment has stymied state funding for the massive network and placed it precariously close to insolvency, a lawyer for the founder said.
E. Stewart Jones, an attorney representing the Rev. Peter Young, said the investigation by Attorney General Eric Schneiderman’s office has dragged on for more than a year and has led to other state agencies withholding funding for the programs he oversees. Jones said a grand jury empaneled in Schenectady County has been the latest step in an aggressive investigation that has continued to pick up steam since a high-profile raid in December 2012 and the arrest of an executive who had worked out of 820 River St. in Troy.
“The consequence is devastating to Father Young’s ministry,” he said. “It would be a tragedy if the consequence of this investigation is an undoing of his ministry and a loss of all those programs.”
Peter Young’s organizations receive state funding through grants, legislative member items and contracts. The five nonprofit organizations under the Peter Young umbrella provide a number of services, including substance-abuse treatment, transitional housing and vocational training.
With its administrative offices based in Schenectady, Peter Young industries oversee services in 17 counties extending from New York City to Buffalo. The organization employs roughly 450 workers across the state and serves 10,000 people annually.
A spokesman for the attorney general would not acknowledge the grand jury probe and declined to comment on any investigation by the office. Young couldn’t be reached for comment Tuesday.
Jones said there’s no allegation of wrong-doing on Young’s part and the financial irregularities in his organization were self-reported. Yet as the investigation drags on, he said the vital programs Young created over the course of five decades are coming unraveled because of a lack of funding.
“He’s exhausted his resources,” Jones said. “He has nothing left to give financially.”
State and federal investigators raided the Schenectady offices in December 2012, shortly after former River Street Chief Operating Officer Dennis Bassat was arrested in Florida. Investigators claimed he and another former manager stole more than $200,000 from the home between 2006 and 2011.
Investigators accused him of writing bogus checks he represented as operating expenses for River Street, having them cashed and then pocketing the proceeds. Bassat and an unnamed accomplice engaged in a scheme in which he wrote checks to fictitious individuals, according to an indictment.
Bassat admitted to personally taking $160,000 when he pleaded guilty to one count of second-degree grand larceny in June. He is expected to receive up to six years in prison, but has had his sentencing repeatedly postponed since his plea last year.
Jones said the arrest led to “a much broader investigation” of Young’s organization. He said the probe seemed to pick up momentum midway through last year and seems to reside solely now with the attorney general.
But Jones claims there is no more wrongdoing to be probed, just bookkeeping errors that are already being corrected. “We’re not talking about individuals who may have taken money,” he said. “We’re talking about mistakes that were made on paper that did not have any consequence on anyone. Ninety-nine percent of this operation is unaffected by the bad behavior of a few individuals.”
The lack of funding has prompted Young to shut down facilities in Altamont and outside Syracuse. Jones said he’s already laid off a number of workers, but didn’t know the exact number. Jones said Young has offered to resolve any issues with the attorney general’s investigation civilly with a “global resolution.” He said a criminal indictment against the organization could bring it to an end.
“If this continues, eventually everything is going to collapse,” he said.