Former Goodwill president arrested for alleged embezzlement

LOS ANGELES (AP) The former president of Goodwill Industries was arrested for allegedly embezzling millions of dollars in donations meant for job training for disabled people, according to a federal indictment unsealed this week.

Andrew Liersch, 67, will appear in federal court Friday to face charges of money-laundering and wire fraud, which prosecutors and Goodwill officials say cost the charity $26 million. He is being held without bail.

He was arrested Friday at Los Angeles International Airport after arriving from Guatemala where officials there expelled him when U.S. authorities alerted them that he had been indicted by a grand jury.

Authorities began investigating Liersch's alleged activities at Goodwill in Santa Clara County six years ago. Prosecutors said donated clothing, furniture and other items were sold to benefit conspirators rather than the charity. To help conceal their actions, the conspirators reported false daily cash receipts from Goodwill stores, authorities said.

Liersch, who was Goodwill's president from 1976 to 1993, was assisted by several other Goodwill managers and placed the money from sales of the items into bank accounts in Switzerland, Scotland and Austria, authorities said.

Seven people have been convicted in the scheme. Another alleged conspirator, Carol Marrs, Goodwill's director of stores, shot and killed herself shortly after investigators searched her home in 1997. Investigators found nearly $1 million in accounts allegedly set up with profits from the scheme.

``It was a sad period in our history,'' said Hugh Barnett, current president of the organization's Santa Clara County operation. ``We've learned from it. We've put in an extensive series of theft prevention controls. It would be very difficult to have this happen again, but we know that temptation is everything.''

Goodwill Industries is a nonprofit organization that collects donated goods from the community and sells them in retail stores. Money from those sales is intended to provide job training to disabled and underprivileged people.

(Copyright 2003 by The Associated Press. All Rights Reserved.)