Charity Whose Director Was Suing Board Over $750K Theft Says It Will Shut Down

Just days after it fired its executive director and chief financial officer amid controversy over $750,000 in embezzled funds, New York arts charity Healing Arts Initiative said it will shut down.

The charity has been at the center of an increasingly bizarre series of events dating back to last year. In August, the organization's executive director, D. Alexandra Dyer, was attacked with drain cleaner, leaving her disfigured. Officials say Dyer was targeted after informing the board of the missing funds. In April, three people, including Healing Arts Initiative's bookkeeper, were charged in the theft and assault.

Dyer sued the board, claiming it was negligent in preventing the embezzlement, and asked for the board's removal. But last week, the charity fired Dyer and chief financial officer Frank Williams, claiming that the pair had failed to provide "critical financial information" despite numerous requests from the organization. Dyer and Williams denied the claim, saying the firings were retaliatory.

“This is happening because we exposed them,” Williams said of the board. “They’re trying to kill a great organization.”

On Wednesday, Healing Arts Initiative abruptly announced it would close. Timothy Gilles, a spokesman for the board, told The New York Times that "expenses for program, payroll and administration had exceeded revenue for many months," but that the charity had only recently realized the extent because Dyer and Williams had withheld information.

Dyer and Williams' camp had a different explanation. Via The New York Times:

“If the board thinks that by firing Alexandra Dyer, who uncovered the thefts, and by putting Healing Arts Initiative into bankruptcy, they will thwart the investigation into their incompetence, they are sadly mistaken,” Ronald G. Russo, a lawyer for Dyer, said.

Williams said that as recently as last month, the chairman of the board, D. Leslie Winter, insisted that $100,000 from city contracts that should have gone to pay performers be used instead to pay off a loan from a small-business development organization of which Winter is president. Winter said, through Gilles, that he did not and would not issue any such instruction.

At a glance, the sudden closure is shocking. Established in 1969 as Hospital Audiences Inc., Healing Arts Initiative grew to a $5 million operation and served more than 350,000 people a year, according to its website. But given the charity's recent history, the move comes as less of a surprise.

In its excellent coverage of the organization's downward spiral, The New York Times reported that Healing Arts Initiative's debt increased from $100,000 in 2012 to more than $2.5 million in 2015. The charity cut its staff by 50 percent—including its chief financial officer. That left Kim Williams, who had come to the organization as a payroll clerk, in charge of the organization's finances, but with little oversight.

Williams (no relation to Frank Williams) would eventually be charged with embezzling the $750,000 and orchestrating the assault on Dyer, ultimately leading to the charity's demise.