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February 12, 2015

N.Y. Authorities Reportedly Investigating Charity's Collapse

New York City and state investigators are looking into the finances of a major New York City social-service nonprofit that is closing in the face of a gaping budget shortfall, according to the New York Daily News.

Citing unnamed sources, the newspaper reports that the Manhattan district attorney and the state attorney general's office are probing the collapse of the Federation for Employment and Guidance Services, which unexpectedly announced two weeks ago that is winding down. Representatives of both law-enforcement agencies declined to comment.

FEGS, as the 80-year-old charity is known, is one of New York's biggest providers of taxpayer-funded social services for needy, elderly, and disabled residents. The organization, which has an annual budget of $250-million, revealed in December that it is $19.4-million in the red. A source told the Daily News that the deficit has continued to grow and is now millions of dollars higher than reported.