Urban League of Long Island sues CEO Theresa Sanders

A leadership battle at the Urban League of Long Island escalated this week as the nonprofit filed a lawsuit against its longtime president.

The Plainview-based organization is suing Theresa Sanders, alleging a July forensic audit revealed she mismanaged its money. The Urban League says in the lawsuit filed Thursday that she was fired Aug. 9 but that she is still publicly saying she represents the organization.

Nicole Turso, a spokeswoman for Nassau County District Attorney Anne Donnelly, said: "I can confirm an ongoing investigation into this matter." She declined further comment.

Sanders' attorney, E. Christopher Murray, denied the allegations. Sanders said she is still in charge and that Su Chen, who said she is interim chair of the nonprofit’s board, was removed from the board this summer and does not have standing to file the lawsuit.

The lawsuit, filed in state Supreme Court, says the audit uncovered nearly $200,000 in improperly documented expenses, including a $43,046 check to the Internal Revenue Service to have a tax lien removed from Sanders’ home. According to the lawsuit, auditors also questioned expenses from a trip to an all-inclusive resort in the Dominican Republic for Sanders and her daughter, nearly $4,500 in ATM withdrawals and other expenses.

Murray said they were all business expenses. He said the money pales in comparison to the amount the organization owes Sanders for taking a reduced salary while it was undergoing financial issues. She took a $45,000 salary for one year although she was contractually owed $135,000, he said.

“We are trying to address the questions that were raised in the audit, and we provided a ton of documents, which they seemed to ignore,” Murray said Friday. “If anything, we believe the Urban League owes her money.”

A spokeswoman for the National Urban League declined to comment on the lawsuit and said she could not clarify who controls the local organization. 

“Each of our affiliates is a separate 501(c)(3) with its own board of trustees, who appoint the president,” league spokeswoman Teresa Candori said in an email.

The lawsuit came nearly a week after Chen sent a mass email to league members and community partners saying that Sanders was "no longer affiliated" with the group and that an interim leader would be appointed soon. Sanders disputed the announcement in a mass email the following day.

In April, Chen became interim board chair of the 50-year-old local organization, which advocates for economic and social justice for Blacks and other minorities. Chen, who declined to comment for this story, said in court papers she immediately noticed problems.

“Shortly following my appointment as Chair of the Board, I became troubled by the financial practices of ULLI, particularly with respect to a pervasive lack of accountability, [oversight] and checks and balances,” Chen said in an affidavit attached to the lawsuit.

A June 7 letter from the National Urban League said the local chapter was being placed on probation and had 45 days to conduct a forensic audit, according to the lawsuit. Accounting firm Fust Charles LLP issued its report July 31, according to the suit.

“There were red flags identified that provide easy opportunities to misappropriate assets of ULLl,” the audit states. “The red flags identified are a result of management of ULLI being controlled by a single person [President/CEO] … and there being no internal controls that were observed during the audit that supported segregation of duties and safeguarding of assets.”

The report listed $28,000 in out-of-town travel, nearly $24,000 in dining expenses and about $4,500 in groceries that could not be determined as business or personal expenses.

Before the audit was issued, a July 17 board meeting was called where Chen was voted out of office, according to the complaint. Chen said the meeting was not conducted in accordance with the organization’s bylaws and was invalid.

An Aug. 3 letter sent by the National Urban League to Chen recommended the local affiliate take immediate disciplinary action against Sanders and that Chen be named interim director of a transitional board of directors to oversee a reorganization. If the Long Island chapter did not comply, it could lose its status as a National Urban League affiliate, according to the letter, attached as an exhibit in the lawsuit.

The letter said the organization would contact U.S. Sen. Chuck Schumer (D-New York) and the U.S. Department of Labor about transferring a $1.1 million federal grant the Urban League of Long Island received in 2022 to the national organization. Schumer’s office did not immediately respond to a request for comment.

Urban League board members Wayne Thompson, Bonnie Cannon and Marian Conway resigned the same day the letter was sent, according to their resignation letters attached as exhibits in the lawsuit. Board member Kelli Gore resigned Aug. 10, citing a family issue. That left just Chen and board secretary Carla Simpson.

Gore and Cannon declined to comment. Thompson and Conway did not return calls seeking comment.

An order signed by Justice Christopher Quinn prevents Sanders from taking any action on behalf of the organization before the case is due back in court Wednesday.

Murray said Sanders is trying to move forward with a membership meeting Aug. 31 so a new board can be elected.

The state Attorney General's office confirmed that Sanders filed a complaint about Chen in June but did not say if it is looking into the matter or if additional complaints have been made.

By Vera Chinese

vera.chinese@newsday.com@VeraChinese

Vera Chinese covers Suffolk County government and politics. She joined Newsday in 2017 after working as an editor for the East End lifestyle publication northforker and a general assignment reporter for the New York Daily News.