ACORN Founder's Brother Embezzled $5 Million (Not $1 Million) AG Charges

According to a July 9, 2008 article in the New York Times, Dale Rathke, the brother of ACORN’s founder, Wade Rathke, “embezzled nearly $1 million from Acorn and affiliated charitable organizations in 1999 and 2000.” The Times reported Dale Rathke embezzled $948,607.50, “carried as a loan on the books of Citizens Consulting Inc., which provides bookkeeping, accounting and other financial management services to Acorn and many of its affiliated entities.” ACORN “chose to treat the embezzlement of nearly $1 million eight years ago as an internal matter and did not even notify its board.” According to an October 10, 2008 New York Times report, ACORN “had failed to disclose the theft for eight years.” Dale Rathke remained on ACORN’s payroll until June 2008, when news broke of his wrongdoing.

Like all seeds this ACORN Grew... Today Louisiana Attorney General Buddy Caldwell charged that the embezzlement of one million dollars was actually FIVE Million:

ACORN embezzlement was $5 million, La. attorney general says
By Robert Travis Scott


An internal review by the board of directors of the community organization ACORN determined that the amount allegedly embezzled from the community organization was $5 million, well more than the previously reported amount of nearly $1 million, according to a new subpoena in an investigation by Louisiana Attorney General Buddy Caldwell.


The subpoena, released this afternoon, says, "It is still unclear if some of the monies embezzled are from state, federal or private funds."


ACORN Chief Executive Officer Bertha Lewis said the new accusation about the embezzlement is "completely false." She said she would comment further after she and ACORN attorneys have a chance to review the subpoena.


Caldwell issued subpoenas in August seeking documents related to Acorn International then-President Wade Rathke and his brother Dale Rathke, who kept the group's books. Those subpoenas were focused on possible Acorn violations of state employee tax law, obstructing justice and violating the Employee Retirement Security Act. Ellis Lucia / The Times-PicayuneState Attorney General BuddyCaldwell


The attorney general had made inquiries in June into alleged embezzlement within ACORN that happened 10 years ago. The group last year dealt with an internal dispute and a lawsuit involving accusations that Dale Rathke made nearly $1 million in improper credit card charges in 1999 and 2000. The brother and a donor repaid the money.


But Caldwell said last month that the statute of limitations presented obstacles to prosecutors taking action on the alleged embezzlement, and that his investigation was not focused on that issue.


The subpoena issued today changes the tone of the investigation and puts a new emphasis on the embezzlement issue. It appears to be in reaction to documents gathered from the ACORN board as a result of the subpoenas issued in August.


"Current high ranking members of ACORN have publicly acknowledged that embezzlement did in fact occur, but the exact amount of the embezzlement was unknown until it was recently acknowledged in a board of directors meeting on Oct. 17, 2008, by Bertha Lewis and Liz Wolf that an internal review had determined that the amount embezzled was $5 million," the new subpoena says.


The subpoena requests documents from Citizens Consulting Inc., which assisted ACORN, and from various accounting and legal consultants in New Orleans. Wade Rathke could not be reached immediately.