NIHC on road to recovery With alleged thief jailed, nonprofit is looking ahead

COEUR d’ALENE ­— The North Idaho Housing Coalition is reeling from the ongoing saga of former executive director Lori Isenberg, accused of embezzling more than half a million dollars from the nonprofit. But its leaders are determined to get the organization back on track.

Board members Kerri Thoreson and Amy Evans said the organization’s board of directors took immediate action once they stumbled across evidence of Isenberg’s alleged wrongdoing.

Early discovery

According to Thoreson, in late 2017, Isenberg kept giving the nonprofit’s outside accounting firm excuses for why she hadn’t turned in documents necessary for the year-end report. Thoreson said Isenberg kept NIHC’s day-to-day books, but was not a signer for bank accounts and did not do the monthly reconciliation.

“What I was thinking is that Lori had gotten in over her head a little bit,” said Thoreson, who has served on NIHC’s board since 2008 and is a member of the Post Falls City Council. She also writes a weekly column for The Press. “We were thinking that at worst our records would be incomplete, that Lori had been sloppy,” she said.

The day before a regularly scheduled Jan. 24 board meeting, NIHC treasurer Kevin Vedder called Thoreson and told her that he had some concerns. Thoreson explained that Vedder had pulled a random sampling of checks at the bank and noticed that the signatures were not quite right. He scanned them and sent them to Thoreson, who then notified the board that at the next day’s meeting they would talk about the issue in executive session, without Isenberg present.

Evans has served on the NIHC board and the Coeur d’Alene City Council since 2014. She said it was puzzling why Isenberg would not have asked the board members to sign the checks Vedder found. The expenses were legitimate housing-related items, she said.

“Why skip that step?” Evans asked. “It only takes a minute to get a signature.”

The board didn’t then know the depth of what was going on, she said.

Taking action

At the Jan. 24 board meeting, Isenberg was sent out while board members looked at the checks. Thoreson said she immediately recognized someone had faked her signature. At that point, the board brought Isenberg back in, put her on administrative leave, took her office keys and NIHC credit cards, and escorted her out the door, said Thoreson. She hasn’t spoken with Isenberg since, she added.

The board did contact an attorney. However, they did not notify law enforcement right away because they weren’t sure if Isenberg had simply been incompetent or acted criminally, said Thoreson. By Jan. 26 they knew enough to terminate Isenberg’s employment, she said.

“We had to take action to protect the organization,” said Evans.

The board also asked its accountant to start peeling back the layers of what Isenberg had done, to see just how bad the damage might be.

“We would have had trouble imagining it reaching $100,000, much less more than that,” said Thoreson.

To date, the approximate total is more than $500,000, said board members and interim executive director Maggie Lyons. The Federal Bureau of Investigation has taken jurisdiction over the criminal case, which includes a charge of felony grand theft.

NIHC officials said their unofficial tally was just for their use in case they file a civil lawsuit to recover the funds. They don’t have access to all the records and said only the FBI would have the complete figures. Beyond that, Evans said the board couldn’t talk about the details of the case because its members don’t want to jeopardize the success of the ongoing investigation. Thoreson expressed hope that Isenberg will repay the money she had allegedly embezzled.

Burned by betrayal

Thoreson and Evans both said they feel betrayed by Isenberg.

“It is a cautionary tale for anyone who serves on a board of directors,” said Thoreson, who had been acquainted with Isenberg for nearly three decades. “Now I know that sometimes people who are intent on wrongdoing are very good at it. It’s not just taking money out of a cookie jar.”

In June the board brought Lyons aboard to help the organization right its financial ship. Lyons owns Resolve Financial Group and has done extensive work as a court-appointed examiner, receiver, special master and trustee in federal and state courts across the Northwest.

Lyons said that without question, the organization will continue its mission.

“The coalition buys vacant or foreclosed homes, refurbishes them with the help of Idaho Housing grant money, then sells them to low-income individuals who qualify for mortgages,” she said. “Occasionally the coalition facilitates down payment help.”

Since July 2009, NIHC has completed 124 home sales to low-income buyers, said a spokesman for NIHC’s partner, the Idaho Housing and Finance Association.

The rental question

The organization has also put 20 families in nice rental homes, mostly since February 2017, Lyons said. The homes are spread out across North Idaho in Post Falls, Coeur d’Alene, Rathdrum, Spirit Lake and St. Maries.

Lyons described them as “lovely homes with beautiful appliances and beautiful flooring.” Most have three bedrooms and two bathrooms.

Some tenants take great care of the homes, said Lyons. Others have a lot of work to do to meet the standards expected of them by the IHFA. The IHFA offices in Boise and Coeur d’Alene each conduct home inspections at least annually, she explained. IHFA has been working with NIHC to ensure that the rentals continue to meet HUD standards.

“There is reciprocity in response to the gift. This is not a free ride,” said Lyons.

Lyons said part of her job is to help the board know what it has in the rentals, and whether it makes sense to retain them. She predicted that once NIHC has completed its reorganization and hired a new full-time executive director, that the nonprofit would “resume its core mission of home sales.”

In addition to assessing the nonprofit’s rental situation, she is working to re-establish relationships with local city governments and housing nonprofits. The part-time interim director anticipates the hire of a new, full-time executive director within six months.

Lyons said that for the time being, no new money is incoming from IHFA. However, NIHC has enough cash on hand to cover its expenses, and also receives monthly rental income of around $10,000.

“The coalition is reorganizing, and will emerge from this dark cloud and be stronger and more successful than before,” she said.