CEO admits stealing from religious nonprofit, spending money on luxuries

Robert Snell
The Detroit News

Detroit — The former CEO of a religious charity serving the poor and homeless pleaded guilty Wednesday to embezzling approximately $250,000 to pay for car repairs, a new roof on his house, his mortgage and credit card bills.

Former Holy Cross CEO John Lynch, 57, of Grosse Pointe Park could spend 33 months in federal prison for wire fraud when he is sentenced by U.S. District Judge Bernard Friedman in January.

The home of John Lynch in Grosse Pointe Park. The former Holy Cross CEO could spend 33 months in federal prison for wire fraud when he is sentenced by U.S. District Judge Bernard Friedman in January.

Lynch, who was paid $200,000 a year, also used the Clinton nonprofit's credit cards to pay for air travel, resorts, dining, clothes, groceries and federal income taxes from 2014-17. Lynch also transferred Holy Cross money to his brother-in-law, according to a copy of his plea deal filed in federal court. In turn, his brother-in-law paid kickbacks to Lynch.

"It's a terrible tragedy," Lynch's lawyer William Swor said.

Prosecutors believe the amount embezzled by Lynch totaled $248,000 but a final figure will be determined at sentencing.

Lynch pleaded guilty five months after being arrested by federal investigators.

At the time of his arrest, prosecutors said Lynch tried to hide the embezzlement by submitting bogus invoices and by setting up companies that he claimed were controlled by a relative but were really controlled by Lynch.

The criminal allegations span Lynch's tenure as chief financial officer and chief executive for the nonprofit, previously known as Boysville of Michigan. Holy Cross provides welfare services to disadvantaged children, adolescents and the homeless in southeast and mid-Michigan.

The government’s allegations about spending sprees read like a TV game show prize package.

Lynch used his Holy Cross-issued credit card to make approximately $36,500 in unauthorized charges, according to the government.

In January 2015, he spent $1,457 at Boyne Highlands Resort in Harbor Springs. Four months later, the credit card was used for a $212 purchase at Lululemon Athletica in Ann Arbor.

In February 2016, the charity’s credit card paid for a $1,300 vacation at the beachfront Ocean Sky Hotel & Resort in Fort Lauderdale and a $278 meal at a farm-to-table restaurant in Boca Raton.

The card also was used to pay for a Labor Day weekend getaway trip to Mackinac Island that included $515 for a condominium, $290 for the ferry ride and $120 at an island restaurant in September 2016.

Prosecutors say the alleged fraud was uncovered in spring 2017 when a Holy Cross employee noticed what appeared to be Lynch's use of the nonprofit's credit card to pay personal expenses, according to the criminal complaint.