The indictment named Asquith Reid, who is the chief of staff for Brooklyn Council Member Kendall Stewart, and a staff member, Joycinth Anderson, as co-conspirators in the case.  According to the indictment, the pair pocketed funds allocated to a fraudulent non-profit organization Reid created called the Donna Reid Fund, whose services were said to include providing after school tutoring to students. 

Councilman Stewart allocated $356,000 to the organization and although the case says that there was evidence the Donna Reid Fund did use some of the money to conduct its mission, it appears that it served primarily as a vehicle to enrich Reid and his associates.  The case doesn’t name the other co-conspirators, but says that Reid used both Anderson and others to help him cash $93,000 in checks that he then kept or spent.  Reid also sent $31,000 via Western Union wire transfers to friends and family in Jamaica. 

It’s unclear what knowledge Councilman Stewart had of the improprieties.  He is not named as a defendant in the indictment, but the case said that $18,000 of the money was used for events at Grand Prospect Hall, a Brooklyn political hall used by the Councilman.  $3,000 was used to pay for the Councilman’s campaign literature.

The case is the first evidence that money stowed away by the City Council, a practice that has gone on for years but only came to light publicly in recent weeks, has been used fraudulently.  Garcia’s indictment says that $14,000 of the funds Reid and his cohorts embezzled was from accounts for two imaginary non-profit organizations the Council created to hold funds, the New York Foundation for Community Development and the American Association for Concerned Veterans. 

It didn't appear that the practice of allocating funds to bogus organizations caused or played a direct role in the embezzlement, but Garcia said in a statement that it make cases of fraud harder to detect.

“Taxpayer money allocated to fake non-profit entities, organizations that do not exist, is even more difficult to trace and more easily diverted for personal gain,” Garcia said in the statement. “This investigation will continue to take a hard look at this process, scrutinizing those allocations most vulnerable to abuse by those in positions of public trust.”

The funds that the Council allocates have to be approved by a city intermediary before they can be dispersed.  Reid first sought clearance to begin providing finances for the Donna Reid Fund through the New York City Department for the Ageing in June 2004 according to the indictment.  The department found problems with his application however, including the fact that Reid’s home address was the same as that listed for the organization.

In November 2004, Reid gained clearance through the Department of Youth and Community Development to begin disbursing the funds.