Many local families facing financial problems over the last couple of years went to a Buffalo not-for-profit agency called HomeFront for help and advice. The agency assigned housing counselor Lori J. Macakanja to assist at least 100 of the families.
But instead of helping her clients fight off mortgage foreclosures, Macakanja stole their money -- about $200,000 in all -- and gambled it away in local casinos, prosecutors charge.
Now victims say the employer -- HomeFront -- refuses to reimburse them. Some have hired attorneys to file legal claims against HomeFront.
"I went to them for help, and instead, I got robbed," said Gina Hernandez, who works two jobs. "The last time I asked their office manager when we would get our money back, she said, 'I have nothing to do with this.' I asked if I need to hire an attorney to get my money back, and she said, 'Do what you want.' "
Macakanja stole more than $5,600 from Hernandez last year after promising that she would use the money to help Hernandez rearrange the terms of her mortgage, said the Buffalo mother of two children.
Authorities say there were many other victims.
Josette Saia of Hamburg, a divorced mother of two, also went to HomeFront last year. Saia said she missed some work because of health problems and worried about losing her home, which was specially outfitted for her 13-year-old daughter, who has spina bifida and uses a wheelchair.
She said she trusted Macakanja because she heard that HomeFront was a well-established agency with a good track record of helping people with financial troubles fight off mortgage foreclosures.
"I gave [Macakanja] a total of $4,681, and she did nothing for me," Saia said. "Lori would always tell me, 'If the bank calls you, don't worry about it. Don't return their calls. I'll take care of it.' "
Buffalo attorney Matthew A. Lazroe said he has 11 clients who were cheated by Macakanja and have been turned down in their efforts to get reimbursement from HomeFront. In Lazroe's view, there is no question that HomeFront is financially responsible for Macakanja's actions.
"The actions of an employee reflect on the organization as a whole," said Lazroe, who is preparing a lawsuit against HomeFront. "Two of my clients who went to HomeFront lost their homes to foreclosure. I had to file bankruptcies for a couple of others."
HomeFront officials told The Buffalo News that they are proud of the help they have provided to many people in the region and distressed over Macakanja's alleged stealing. They said they fired Macakanja late last year and are working hard to recover the money she stole from clients.
But when asked whether HomeFront can guarantee reimbursement to victims for money stolen from them, James P. Harrington, an attorney for the agency, said he could not.
So far, insurance companies for HomeFront have declined to provide any coverage for the money clients lost to Macakanja, Harrington said.
"HomeFront has cooperated with the federal investigation and is doing everything it can to find ways to make the victims whole, whether HomeFront is liable for these losses or not," Harrington said.
"The main problem is, there is no big pot of money that HomeFront can dip into. They are a not-for-profit organization that gets state and federal grants, and the money has to be used for certain programs, in a very restricted way."
HomeFront officials are sorry for the victims, the attorney said, but the missing money disturbs the nonprofit organization, too."
Both Hernandez and Saia said that they still believe that HomeFront is a good agency that has helped many people. Neither suspects anyone at HomeFront of intentionally helping Macakanja to defraud them.
But both women said they have grown increasingly upset with HomeFront because agency officials refuse to ensure they will get their money back.
"Wouldn't they have to be insured for something like this?" Saia said. "Lori was their representative, their employee. I met with her in their offices. In retrospect, they should have had much tighter controls on their employees."
Macakanja, 35, of Dunkirk, was charged in January with felony counts of defrauding HomeFront clients and obtaining money by false pretenses, the U.S. Attorney's Office said. Macakanja pleaded not guilty, said her attorney, Brian P. Comerford of the Federal Public Defender's Office. Repeated efforts by The News to reach Macakanja were unsuccessful.
Under the conditions of her bail release, Macakanja is required to stay out of casinos and get professionally evaluated for a possible gambling addiction.
A criminal complaint charging her with stealing money from at least 100 HomeFront clients was made public Jan. 29 by U.S. Attorney William J. Hochul Jr.
One of the victims was a local woman with multiple sclerosis who uses a wheelchair, prosecutor Trini E. Ross said in court papers. That woman was so desperate to keep her home that she sold off her deceased mother's wedding and engagement rings for $2,670 and gave that money to Macakanja, Ross said.
Instead of using the money to keep the woman's mortgage from foreclosure, Macakanja kept it, court papers allege.
"Macakanja's clients usually experienced hardships, such as a job loss, divorce, illness [or] disability, which led to their inability to pay their mortgage," Shelley K. Carosella, an investigator with the U.S. Postal Inspection Service, stated in the criminal complaint.
"[Macakanja] falsely told her clients that this money would be held in 'suspense' until the bank needed a payment. [Macakanja] admitted she spent these funds at local casinos."
Victims said Macakanja insisted that they give her either cash or a money order, according to Carosella. The adviser then promised to use the money to rearrange their mortgages and help them keep their homes, Carosella said.
Although Macakanja pleaded not guilty in court, federal agents said that she told them something different last October. "I know why you are here, and I want to plead guilty to everything," she allegedly said.
HomeFront officials consider Macakanja "a rogue employee," Harrington said, noting that federal agents never accused anyone at HomeFront of sanctioning or knowing about her alleged fraud.
Founded in 1975, HomeFront has eight employees and a volunteer board of directors. Since 1998, it has helped at least 1,100 people purchase their first home, agency officials said. The organization provides counseling and education to people who are trying to purchase a home or struggling to keep one.
"Foreclosure-prevention counseling," which Macakanja did, is one of the services that HomeFront advertises. The agency also has worked with the City of Buffalo to purchase, refurbish and find owners to buy homes on 19th Street on the West Side.
HomeFront told The News last year that its annual budget is about $2.2 million and that it works closely with federal, state and local government agencies. HomeFront's funding comes from federal and state grants and charitable organizations.
Last December, the U.S. Department of Housing and Urban Development announced that it gave $43,357 to HomeFront to "assist families in becoming first-time homeowners, and remaining homeowners after their purchase."
HUD officials declined to say whether the Macakanja case could jeopardize HomeFront's future chances of getting federal funding. A HUD spokesman, Adam Glantz, said the department is "very concerned" about the victims and will do whatever it can to help. He said victims can call the HUD Inspector General's Office for help at (212) 542-7950.
But will Hochul, as the region's top federal prosecutor, take steps to make sure that victims get their money back?
Hochul said that his office's Asset Forfeiture Unit will make "every effort" to help but that the only person or entity that can legally be targeted is Macakanja, the sole defendant in the case.
Although she is accused of stealing $200,000, a judge assigned a public defender to Macakanja because she said she has no money to hire an attorney.
Saia and Hernandez both said they have been able to make arrangements to prevent foreclosure on their homes. But both said they did so with no help at all from HomeFront. Both also said their families really could use the thousands that was stolen from them.