Charity embezzler gets 7-year term

United Way fraud earns 'tough' time

By Desda Moss
USA Today
June 23, 1995

William Aramony, the high-living ex-chief of United Way, was sentenced to seven years in prison Thursday for looting the coffers of the nation's largest charity network.

Aramony's lawyer, William Moffitt, had asked for leniency, saying his client, 68, suffers from a degenerative brain disease and has other medical problems.

"A long sentence is tantamount to a life sentence for Mr. Aramony," he said.

But U.S. District Judge Claude Hilton gave Aramony all but one of the eight years he faced under federal sentencing guidelines. He also must serve three years of probation and was ordered to repay $552,000 in misused funds.

He is expected to surrender to a minimum-security federal prison within four to six weeks, as soon as space becomes available. Until then, he remains free on bond.

Although it isn't known which of the federal prison system's 81 facilities Aramony will be assigned to, Federal Bureau of Prisons spokesman Dan Dunne said prison life will be much different from the jet-setting lifestyle Aramony enjoyed as head of United Way.

"Living conditions are spartan. It's not 'Club Fed.' The negative impact of confinement is real," he said.

"This is a tough, hard sentence that certainly sends a message to anyone responsible for stewardship of charitable accounts," said Assistant U.S. Attorney Randy Bellows.

In April, Aramony and two former United Way associates, Thomas Merlo, 64, and Stephen Paulachak, 50, were found guilty of federal fraud and conspiracy charges.

Merlo and Paulachak were accused of helping to funnel money to Aramony, as well as themselves.

Merlo was sentenced to four years and seven months in prison and ordered to repay $552,000. Paulachak was sentenced to 2 1/2 years. All say they'll appeal.

During the three-week trial, prosecutors portrayed Aramony as a corrupt womanizer who spent hundreds of thousands of dollars of the charity's money to finance flings with young women and trips to Egypt, London, Paris and Las Vegas, among other places.

Bellows put the final tally on the amount Aramony defrauded United Way at $1.2 million, taking into account such things as untraced trips and gifts.

Aramony headed the United Way for 22 years before allegations of financial impropriety forced him to resign in 1992.

The scandal was a stunning blow to the nation's largest charity, which funds 47,000 programs through its 2,100 autonomous locals nationwide.

It caused donations to falter. Hundreds of independent United Way locals withheld dues from the Alexandria, Va.-based national office. The office is now about one-third smaller than before 1992.

United Way officials said the sentencing closes a painful period in the organization's past.

"Obviously, this is a personal tragedy for the individuals involved but a self-inflicted one. It is important that the United Way system direct its focus to the future and not dwell on the past," said board chairman Keith Bailey.