Scott Ball / Rivard Report
A former board member of the Coppini Academy of Fine Arts allegedly embezzled $216,000 from the small nonprofit organization, according to documents and several people who have been associated with the academy.
The Coppini Academy of Fine Arts is the legacy of Pompeo Coppini, best known locally as the artist behind the Cenotaph monument in Alamo Plaza. The academy, housed in the artist's former studio in Olmos Park, is dedicated to Coppini's legacy and his mission of teaching figurative art through workshops and classes.
The San Antonio Area Foundation, which administers the Pompeo Coppini Trust, requested an investigative audit of the academy in August 2017 that was completed in June. The findings indicated financial fraud occurred from 2012 to 2016, according to documents obtained by the Rivard Report.
The audit named former board member Walter Charles “W.C.” Wagnon as a “suspect entity” in the embezzlement. Wagnon joined the board in 2010 as treasurer, at the invitation of former board President Janice Hindes. Hindes said she was aware that Wagnon had served time for prior convictions, but he convinced her he was trustworthy.
“He was a good con man,” Hindes said of Wagnon.
According to the audit and multiple sources, Wagnon allegedly diverted funds to himself and other suspect entities, such as shell companies and a sham philanthropic organization. Additionally, documents indicate more than $50,000 was paid in 2012 directly from the Pompeo Coppini Trust to a nonprofit company called Workstation Central Ltd., which listed Wagnon as president and director in 2010.
While at the academy, Wagnon also allegedly destroyed financial and archival records, routed mail to hide financial irregularities, and made unauthorized ATM withdrawals, according to sources. The Rivard Report has granted anonymity to several people with knowledge of the situation because of its sensitivity.
Wagnon did not respond to emails and several voicemails left by the Rivard Report seeking comment.
Current board President Charlotte Cox said she discovered suspicious activity related to Wagnon in early 2017. "He had an ATM card and was making withdrawals, and I asked him to provide me documentation or receive his resignation, one or the other," Cox said. Wagnon resigned in April 2017.
However, confronted with the results of the forensic audit at a Sept. 20 board meeting, Cox and the board declined to pursue criminal charges or legal prosecution, according to a person with knowledge of the meeting. Asked if the board is considering further action, Cox said, “That’s a board decision, that’s confidential.”
Rebecca Helterbrand, the Area Foundation's vice president for strategy and innovation, said the decision to pursue legal action or criminal charges rests solely with the Coppini Academy's board of directors.
"It was our due diligence that realized that a forensic audit was needed, and it was our request to have that third-party forensic audit completed, and we shared those results" with the Coppini Academy board, Helterbrand said.
The Area Foundation took over the administration of the Pompeo Coppini Trust in August 2014 from Jefferson Bank, which previously administered the trust. Documentation shows that the majority of funds allegedly were embezzled in 2015-16, when $122,700 allegedly went missing.
The San Antonio Area Foundation is a community foundation that manages more than $900 million in assets for 528 funds and offers support for nonprofit organizations.
Organizations of all sizes can be vulnerable to fraud, said nonprofit consultant Marion Lee of Lee Plus Associates, who has advised nonprofit organizations for 30 years. People involved in the nonprofit sector tend to be driven by a passionate mission, she said, and "do not believe themselves vulnerable to any kind of attack, which is sad, because they are."
Smaller nonprofits, in particular, might not institute safeguards that a corporation or business would, and "they do not put the infrastructure in place to keep them from being taken advantage of," she said.
Though many small nonprofits tend to have limited funds to create adequate security and protections, Lee said, all "have the capacity to put into place basic oversight that can help them in the long run.
"It is incumbent upon every nonprofit organization and board to do everything reasonably in their power to safeguard funds that they are given," Lee added.
Missing funds are often unrecoverable, she said. "It takes time and energy and money to figure out what happened, and to find out who's the perpetrator."
To fund its operations, the Coppini Academy, which became a nonprofit organization in 1952, relies on donations, class and workshop fees, event fees, and regular contributions from the Pompeo Coppini Trust. The academy's annual revenues from January to August were $77,000.
Wagnon's signature as treasurer first appears on the academy’s 2010 federal Form 990 tax document, dated Aug. 11, 2011. The academy's Forms 990, which are publicly available, are required by all nonprofit organizations to be filed annually. No co-signer appears on the 2010 Form 990 signed by Wagnon, whereas in previous years, the forms were co-signed by a certified tax preparer.
In subsequent years during Wagnon’s affiliation with the Coppini Academy board, the organization's reported gross receipts fell below the $50,000 threshold the Internal Revenue Service requires for filing Forms 990, so a simpler version of the form was filed.
One person associated with the academy during the time Wagnon worked there learned that Wagnon had prior criminal convictions for check forgery and theft.
When asked if criminal background checks for staff members would be implemented in the future, Cox said, "Oh, definitely. We’ve added that to our procedure."
Hindes said she wants legal action taken against the alleged embezzler. “I don’t know whether I’m more disappointed in him or the San Antonio Area Foundation” for not pursuing a legal remedy, she said.
However, Helterbrand said any pursuit of legal remedies is a matter solely for the Coppini Academy's board. "It is up to the board of [Coppini Academy] directors to take any action related to the results of the forensic audit and the recommendations that have been made, so the San Antonio Area Foundation that administers the trust is not in a governance position," she said.
When asked if the Area Foundation was providing adequate support to the academy in this situation, Cox said, "Absolutely. It’s an ongoing learning process, and we’re still building, but yes, I am very confident that we're handling the situation, and this is not going to occur in the future."
Cox said she hopes the academy will recover from the incident.
"Our reputation was harmed more than anything ... and we’re still trying to rebuild our reputation in the community," she said. “With public support and member support, I think we can. I think we’ve got a long road to haul … and I’m hoping the public will stand behind Coppini and help us through this."