The former provider of child welfare services in the Omaha-metro area, St. Francis Ministries, is suing its leader, IT director and general counsel claiming they abused their positions of trust to bilk the nonprofit operation.
The executives are accused of overcharging St. Francis ministries for services and using expense account for lavish gifts, travel and entertainment.
This comes less than a year after the state of Nebraska dropped the troubled child-welfare provider after financial issues plagued St. Francis, which was also accused of not adequately providing child welfare services to Douglas and Sarpy Counties.
Robert “Bobby” Smith, the former executive director, David Schaffer, former general counsel and his former law firm Miller, Canfield, Paddock, and Stone, and William Whymark, former chief information officer, are all being sued for breach of their fiduciary duty in Saline County District Court in Kansas.
The law firm and Schaffer are also being sued for legal malpractice.
Court documents say Smith spent almost $500,000 on travel for business purposes, expensive meals, entertainment, and gifts for himself and family members.
It also claims Smith hired his friend, Schaffer, as general counsel and that Schaffer charged St. Francis for over $1 million in legal bills going to his law firm, and that another $500,000 was charged and given to Schaffer directly. It also claims Schaffer billed St. Francis for business that had nothing to do with the nonprofit.
The documents also say Schaffer’s brother, William Whymark was brought on as chief information officer and used his company, WMK Research for IT work, even though Whymark was unqualified.
WMK was paid a total of $11 million but court documents claim St. Francis overpaid for the work by $7 million. And after Whymark wiped the hard drives clean, it halted a financial audit.
In total St. Francis claims it cost $3.2 million to repair the damage WMK did.
Signs of financial issues were evident in Nebraska for some time.
The State of Nebraska announced in December of 2021 that it would cease a case management contract with St. Francis for Douglas and Sarpy Counties.
That seemed, at the time, to end a long saga of controversy surrounding Saint Francis Ministries. In 2019, they were awarded a five-year, $197 million contract. Then after serious financial issues, the state renegotiated the contract, which gave Saint Francis a two-year, $147 million contract amounting to around $2 million more a month.
This prompted the Nebraska Legislature to launch a special committee investigation on how Saint Francis got the bid and the quality of foster care services they've provided.
While the Legislature was investigating, St. Francis’ CEO William Clark admitted to Nebraska lawmakers that St. Francis' bid was too low.
“Simply put, the bid was bad,” said Clark.
The Kansas Reflector reportsthat Nebraska State Sen. Machaela Cavanaugh is seeking a conversation on making St. Francis reimburse the State of Nebraska for the botched contract.
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