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Posted: 4:12 p.m. Tuesday, April 23, 2013

Former Woodruff Arts employee pleads guilty to embezzlement



By By Howard Pousner and Bill Rankin

The Atlanta Journal-Constitution

At a time when theaters and orchestras nationwide were suffering through the economic downturn, Ralph Clark found a way to make the arts pay. Unfortunately, Clark admitted Tuesday, he was a thief.

Clark started working at the Woodruff Arts Center in 2004 as a heating and air conditioning mechanic. By the time he left, eight years later, he had risen through the ranks and embezzled $1.1 million from the city’s largest cultural organization.

Clark, 42, of Ellenwood pleaded guilty Tuesday to the embezzlement charge. When sentenced Aug. 7, Clark faces a likely term of between 41 months and 51 months in prison, according to a plea agreement he reached with federal prosecutors.

The embezzlement came during an already touchy time for the Woodruff, the nonprofit arts center whose four divisions (Atlanta Symphony Orchestra, Alliance Theatre, High Museum of Art and Young Audiences) cast a giant shadow across Atlanta’s arts scene.

Last summer, Atlanta Symphony management, determined to limit mounting debt that it projected would reach $20 million, went through acrimonious contract negotiations with its musicians that led to a work stoppage. A deal was reached in late September, barely averting a postponement of the fall season.

“The Woodruff Arts Center is an important part of the fabric of our community,” U.S. Attorney Sally Yates said. “This defendant embezzled over $1 million from funds intended for the benefit of our citizens.”

Virginia Hepner, the Woodruff’s president and CEO, said, “We are pleased that this process has been resolved and are grateful for the work of the U.S. attorney’s office and law enforcement authorities who have brought it to closure.”

The arts center has filed an insurance claim for the loss, but it has not been settled, she added.

When the center announced last November that it had been defrauded, it said it had been victimized out of $1.438 million. On Tuesday, neither the U.S. Attorney’s Office nor the Woodruff would explain the discrepancy between that amount and the amount cited in Clark’s plea.

According to federal prosecutors, Clark defrauded the Woodruff from November 2005 to this past October.

Clark, wearing a red-checkered, button-down shirt, told Chief U.S. District Judge Julie Carnes he attended Briarcliff High School but did not graduate from college.

Carnes said she would order Clark to repay the money he stole. But when she told Clark that she reckoned he couldn’t pay that kind of restitution now, he nodded in agreement.

Assistant U.S. Attorney Benita Malloy told Carnes that when Clark’s supervisor became suspicious he was embezzling money, the center asked the Jones Day law firm to conduct an audit. When the firm confronted Clark with its findings, he admitted wrongdoing, Malloy said.

At the Woodruff, Clark ultimately was promoted to director of facilities, in charge of making sure the center was properly maintained. In that position, Clark was authorized to approve vendor contracts of up to $50,000.

In one scheme, Clark submitted about $780,000 in bogus invoices to the Woodruff from Lowe’s Services, his wife’s apartment-cleaning business, which was paid for goods and services that were never provided, Malloy said. Clark’s wife was not charged in the case. Prosecutors did not say whether anyone else might be charged.

Clark also defrauded the Woodruff by requiring a maintenance services vendor to pay him about $165,000 in kickbacks based on inflated invoices, said Malloy, who did not identify the company. Clark told the vendor that in order for him to get future work, he would have to overbill the Woodruff by 30 percent, with Clark getting the padded expenses, Malloy said.

Clark also billed the Woodruff for almost $41,000 for services he said were performed by students and for $153,000 for services he said he himself performed after hours, Malloy said.

When the Woodruff went public with the embezzlement news in late November, some observers in the city questioned its management oversight.

But Atlanta’s corporations and foundations, whose donations to the Woodruff help make it the Southeast’s biggest arts entity, seem to be sticking by it. Earlier this month, the Woodruff reported that it had raised $6.8 million in the first six months of its Annual Campaign, reaching nearly three-quarters of its $9.2 million goal. The campaign continues through the end of May.

Annual Campaign funds support shared services across the arts center, including finance, facility maintenance, human resources, information technology, security and outreach initiatives. A portion is distributed to the four Woodruff divisions for educational and artistic programs.

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