The Foodbank of Southern California — a grocery-and-meal distribution hub serving hundreds of food pantries in Long Beach and South Los Angeles — has closed its doors amid a state investigation into a possible multimillion-dollar fraud and embezzlement scheme, according to state officials and a nonprofit executive.
The closure is expected to severely affect thousands of low-income families, seniors and homeless people who rely on food distribution sites for their nutritional needs.
Brian Weaver, the food bank’s chief executive, said he suspended operations and furloughed about two dozen employees after losing funding when state police and investigators conducted a search warrant at the Long Beach-based organization on Sept. 26.
In addition to removing documents and records, Weaver said state officials took palettes of food stored in a warehouse, transporting them to the L.A. Regional Food Bank.
Weaver called the investigation a “black eye” on the nearly 50-year-old nonprofit, which serves about 2 million people.
Weaver said the food bank supplies groceries and meals to about 300 pantries in Long Beach and South L.A., at least half of them are churches.
“Rent is high in L.A.,” he said. “People who go to our pantries probably save $150 on their grocery bill and that’s a little more money that they have for rent, so people are really dependent on our food. And I feel bad for them, as well for our 25 employees who are working poor and now find themselves unemployed.”
David May, spokesperson for the L.A. Regional Food Bank, said they received delivery of more than 1 million pounds of nonperishable items, frozen meats and produce.
May said at least 60 new agencies — from faith-based food pantries to nonprofit service groups — have been brought onboard to ensure people affected by the closure have access to food donations.
Last week’s raid was not the first time authorities had set foot in the Foodbank of Southern California’s offices. Weaver said social services investigators spent three days in mid-September looking over the nonprofit’s bookkeeping records, before returning two weeks later with a warrant.
Scott Murray, a spokesman for the California Department of Social Services, said the agency is “conducting an investigation regarding the use of government funds” by the food bank.
He said more details would be provided after the investigation was completed.
Weaver, who became chief executive in March, said the warrant sought documents and information related to his predecessor — Jeanne Cooper, who was suspended by the board that same month — as well as a former board member and their spouse. He declined to name the person.
Weaver said the warrant suggests that investigators are looking at possible instances of fraud and embezzlement — allegations he suspected during his previous two years serving on the organization’s board of directors.
Not long after he took over Cooper’s position, Weaver said he came across $5,000 weekly payments to a vendor who apparently supplied the food bank with cold storage space.
Weaver found the payments suspicious because he was unaware of any weekly accounts with any vendor. He said he checked with the warehouse manager to see if there had been any traffic from the warehouse to the address listed for the cold storage site, but found none.
Mystified, Weaver said he drove there, only to find it was a P.O. Box.
He said documented payments to the vendor went as far back as 2016, and totaled more than $2 million.
Weaver said he launched an internal investigation soon after — hiring a forensic accounting firm that he claimed uncovered other questionable payouts totaling in the millions.
“This was systematic fraud that was going on for decades,” he said.
Auditors were finalizing their findings, he said, when the state launched its investigation. Weaver said he plans to hand a copy of the audit report to authorities.
Cooper could not be reached for comment Friday, but in an email response to NBC Los Angeles, she denied misusing funds.
“I did not use any funds for personal use,” she wrote in an email to the station.
Instead, Cooper alleged that other board members pressured her to “pay them” and that she had reported it to the authorities.
“I alerted the State of California Department of Social Services, the state attorney general … to look into the practices of the board,” she wrote.
While the food bank’s future remains murky, Weaver said he hopes the state will allow him to continue to run the organization, and that people will forgive the nonprofit for violating the public’s trust.
“I want [the public] to understand that this food bank has been around for 49 years,” he said. “And we have served a lot of people and done a lot of good over those 49 years.”
