Judge orders Community Resource Collaborative to be liquidated

A state Supreme Court judge in Monroe County has ordered the dissolution of Community Resource Collaborative, a Rochester-based nonprofit that misused American Rescue Plan Act funding intended to bolster local organizations that provide support to city communities.

The decision, announced Tuesday, appoints David Tang of Underberg & Kessler as an independent receiver to liquidate CRC’s property and assets. Tang will also oversee the distribution of funds to the organizations CRC owes money under its debt obligations and grant agreement with Monroe County. The decision bars CRC and its officers and directors from operating the company, collecting charitable funds, or transferring any of CRC’s funds and property.

The court order culminated a process that began with a petition filed Oct. 7 by state Attorney General Letitia James, who sought to break up CRC for violating state nonprofit laws.

CRC, created in 2021 by Tina Paradiso, was engaged in November 2022 by Monroe County to act as a fiscal sponsor on behalf of the Neighborhood Collaborative Project, a collaboration of 12 local organizations that were due to receive portions of more than $7.1 million in federal ARPA funds over a four-year period ending in 2026. 

However, in 2023—the first year of the agreement—CRC failed to deliver nearly $244,000 of the $1,067,971 it received to those local organizations while its executives used tens of thousands of dollars to pay for personal expenses, according to a March forensic review by EFPR Group conducted on behalf of Monroe County.

Credit cards initially issued to Paradiso, Anthony Hall, and Janelle Snow were charged with $35,000 in rent and hotel costs, $28,000 in transportation costs (including $26,000 in Uber fees), approximately $18,000 in Amazon charges, and thousands of dollars in additional misused funds, including money that went to paying Hall and Paradiso both directly and—in just Paradiso’s case—through two other companies she owned.

The forensic review also found that CRC is likely insolvent and burdened with outstanding loan balances probably “in excess of $150,000,” though the auditors lacked documentation for these loans. 

It is unclear how this potential insolvency will impact reimbursements to the community groups. The court order directs CRC’s creditors to file claims with the court while authorizing Tang, the independent receiver overseeing the liquidation, to pay out the organizations due grant money. 

Tang, who was appointed recently, said he can’t comment on CRC’s assets since he hasn’t had time to conduct his own analysis, but he said he is aware of the insolvency claims and of CRC’s “substantial obligations to creditors.” He said the court should approve or confirm whether creditors or grant recipients would be prioritized in liquidation.

The attorney general’s office would not go on the record when questioned whether the funds can be recovered from CRC’s assets. In Tuesday’s announcement of the liquidation order, James said the funds will be returned.

“For families struggling to make ends meet in Rochester, and throughout the region, community-service organizations are an essential lifeline, and those groups need the support and funding they expect so they can help others,” she said. “The Neighborhood Collaborative Project was established to help address poverty, food insecurity, and other issues affecting New Yorkers in Rochester, but instead the CRC pocketed money that belonged to community-service organizations. Today’s court order will return funds to Rochester-area organizations that were owed money so that they can help New Yorkers access housing, food, and other essential services.”

The nonprofits that may be owed money from CRC, according to the forensic review, are ABC Action Front Center, Baden Street Counseling and Support Center, Barakah Muslim Charities, Beyond the Sanctuary, Cameron Community, Father Tracy Advocacy Center, Lyell Avenue Business Association, SWAN at Montgomery Center, and The Peoples’ Pantry.

C3 Consultancy Services, MC Collaborative, and On the Ground Research—all for-profits—were also found by the audit to be due money from CRC, but the attorney general’s October petition said their claims should be “subject to disqualification on the grounds of self-dealing if it is determined that the services or goods rendered by these vendors were not arm’s-length transactions.”

In her own written analysis, Monroe County Legislator Rachel Barnhart in March alleged that these three for-profits inked their involvement with the NCP thanks to connections between their various board members and officers. She questioned the amount of NCP funds going to the for-profits and raised doubts about whether the firms should be considered subrecipients rather than contractors. Barnhart says she wrote to the U.S. Attorney’s Office calling for the for-profits to be investigated “for giving themselves no-bid contracts.”

The attorney general’s office said decisions about which organizations and companies ultimately qualify for funds from CRC will be under the purview of the independent receiver. If a creditor disqualification issue is unresolved, the court may need to weigh in or decide it, Tang said.

The attorney general’s petition is being handled by Benjamin Bruce, deputy assistant attorney general in charge, and Audrey Cooper, former assistant attorney general, both of the Rochester regional office.

Justin O’Connor is a Rochester Beacon contributing writer. The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. See “Leave a Reply” below to discuss on this post. Comments of a general nature may be submitted to the Letters page by emailing  [email protected].