Beverly Hills fundraiser sued by attorney general
Officials from a private Santa Monica elementary school that was bilked out of more than $500,000 applauded a state lawsuit Friday that accuses fundrais-er Aaron Tonken of fraud.
The Westside Waldorf School on Fourth Street was forced into an economic crisis two years ago after Tonken allegedly arranged for a major donation from the Cynthia Gershman Foundation that never came through, school officials said.
In a lawsuit filed this week by the state attorney general, Tonken and his associates are accused of defrauding former President Bill Clinton and several celebrities out of more than $1.5 million by organizing fundraisers and allegedly pocketing the money.
The Waldorf School was one of more than a half dozen organizations that was allegedly defrauded.
The lawsuit alleges Tonken put donations intended for charities into his own bank account and then allegedly refused to give the charities an explanation of where the money went.
Waldorf parents, teachers and administrators expressed hope Friday that the lawsuit will prevent other organizations from falling victim to Tonken’s alleged scheme.
“Everything he said he was going to do, he hasn’t done,” said Waldorf parent and former event coordinator Wendy Salz, who worked with Tonken in the past. “The children of the school have really suffered because of him. It’s unconscionable.”
“Everything he said he was going to do, he hasn’t done. The children of the school have really suffered because of him. It’s unconscionable.” — — WENDY SALZ Parent and former event coordinator
Tonken, whose fundraising and consulting business is based in Beverly Hills, couldn’t be reached for comment.
Waldorf officials said Tonken brought two donors to the school in January of 2001. Cynthia Gershman, trustee of the Cynthia Gershman Foundation, signed a pledge to Waldorf for $650,000. Another donor, Loren Arbus, agreed to put on four annual fundraisers for the school, officials said.
Waldorf then paid Tonken $25,000 for “consultation services,” and began expansion and relocation plans for the private school, which must move out of its current location at St. Augustine Church by the Sea by July 1 because its lease expires, school officials said.
When Gershman’s first $120,000 check came through, the school hired more teachers and an administrator who was paid $80,000 a year to help find a new home for the school and oversee its move.
Tonken’s reliability came into question shortly after when the first annual fundraiser failed to generate any revenue, school officials said.
Waldorf put up $65,000 as a “good faith” deposit which Tonken was supposed to return after the event, along with any additional revenue generated by the fundraiser, school officials said. But officials said Tonken was slow to return their deposit. Vendors from the event soon began calling the school, saying they had not been paid for their services by Tonken or Arbus.
“From then on, it kind of became an adversarial relationship,” said Jeffrey Graham, former board president and co-chair of Waldorf’s finance committee.
Waldorf officials said Tonken eventually returned the school’s $65,000 by depositing money into its bank account from a separate donor. But no extra revenue was ever brought in by the event, they said.
“We don’t know exactly what happened,” said Christiaan Wagener, a Waldorf parent and secretary to the board. “He kept moving the money around like a little pansy scheme.”
Shortly after the first fundraiser, Gershman withdrew her pledge, which sent the school into further economic tail-spin. Graham said Gershman didn’t provide any reason for the change of heart.
With the money suddenly gone, Wagener said the school had to lay-off temporary workers, cut back on services, ask vendors for grace periods and seek loans just to avoid bankruptcy.
“We tried to keep the children from being effected,” he said. “The teachers took on an enormous amount of work and we had parents come in and volunteer.”
Wagener estimates it will take three years for the 165-student private school to recover from the alleged fraud. The school charges an annual tuition of about $11,000 per student.
Parents and teachers said they are relieved that the lawsuit may hold Tonken accountable for his alleged improper actions.
“He is beyond rude,” said Salz, who worked as a coordinator directly with Tonken. “He’s self-centered. He was money thirsty in his motives — it didn’t matter who got hurt or what he had to do, he did it anyway.”
Attorney General Bill Lockyer, who filed the lawsuit, said his first priority is to “shut down Tonken’s operation.”
“The lawsuit details a sordid scheme to steal money from worthy charities, use it for improper purposes, and refuse to account for the donations,” Lockyer said in a press release Thursday. “Allowing egregious misconduct like this to go unchecked can chill charitable donations and harm the organizations they support.”
The lawsuit, which seeks a permanent injunction barring Tonken and the other defendants from fundraising or disbursing donations, is for $1.7 million in general damages, civil penalties of at least $350,000 and unspecified punitive damages.
Named as defendants in the case are Tonken, Aaron Tonken & Associates, Cynthia Gershman, lawyer Kevin Clarke and Los Angeles resident Robert Freedman.
The charities allegedly defrauded by Tonken include the Kids Campaign, the Joan English Fund for Women’s Cancer Research, the Michael J. Fox Foundation, the Betty Ford Center, City of Hope, Inner-City Games Foundation, Waldorf, the Isabelle and Leonard Goldenson Association and the Robert H. Lorsch Foundation Trust.
Former President Bill Clinton, Sen. Hillary Rodham Clinton and a wide spectrum of celebrities — including singer Rod Stewart, pop group N’Sync, comedian Whoopi Goldberg, actors Michael J. Fox and Michelle Pfeiffer, and the cast of “Ally McBeal” — are among the supporters of the charities.
Originally published in the Santa Monica Daily Press print edition on March 15, 2003. Read the original PDF.