Attorney General Settles With Former Georgetown Frat Boss for $100K
By • December 18, 2023 0 1369
Attorney General Brian L. Schwalb announced on Dec. 18 “the successful resolution of three separate enforcement actions that will safeguard nonprofit assets and ensure DC nonprofits comply with the law.”
Along with dealing with the Fraternal Order of Police, Jerrard F. Young Lodge #1, and the Coast Guard Auxiliary Association, Schwalb wrote, “Finally, to resolve allegations of misusing nonprofit funds for personal gain, Terrence Boyle—a former officer and director of the Delta Phi Epsilon, Inc. and the Delta Phi Epsilon Foundation for Foreign Service Education—must pay $100,000 in restitution and is permanently banned from participating in the governance of either organization.”
“Nonprofits operating in the District are legally obligated to faithfully serve their stated charitable purposes, and to contribute to the public good — they are not permitted to enrich private interests,” added Schwalb. “The Office of the Attorney General will continue to ensure that nonprofits fully comply with the law so that nonprofit assets are used in furtherance of a public benefit.”
The Office of the Attorney General issued the following statement on the fraternity, its foundation and its former director, located near Georgetown University but not part of it.
Delta Phi Epsilon, Inc.; Delta Phi Epsilon Foundation for Foreign Service Education; and Terrence Boyle
Delta Phi Epsilon, Inc. (DPE) is a District nonprofit organization established to promote international trade and foreign service education. The Delta Phi Epsilon Foundation for Foreign Service Education (the Foundation) is a separate nonprofit organization established to serve as the charitable arm of DPE and to provide scholarship awards to individuals studying foreign service. Terrence Boyle is a former long-time officer and director of both DPE and the Foundation.
OAG sued DPE, the Foundation, and Boyle, alleging that Boyle violated DC law by using nonprofit funds for personal gain and disregarding the entities’ nonprofit purposes. The lawsuit also laid out numerous other violations, including failures to comply with nonprofit governance requirements and the improper sale of the DPE’s Alpha Chapter House (3401 Prospect St, NW).
The DC Superior Court granted partial summary judgment in favor of the District, ruling that Boyle illegally enriched himself by using Foundation funds to finance his private home in Georgetown, that the Alpha Chapter House was improperly transferred without the required approval of the DPE membership, and that Boyle had breached his fiduciary duties to both nonprofits.
Under the terms of the settlement, Terrence Boyle must:
- Pay $100,000 in restitution to the Foundation: Boyle must make a $100,000 payment to the Foundation as restitution for illegally using Foundation funds to subsidize the purchase of his private home. Boyle originally used $150,000 of Foundation funds as a downpayment on his home and used the Foundation as a co-signer on his mortgage. He later repaid only the original $150,000 to the Foundation, without any interest, and obtained sole ownership of the home.
- Never again participate in governance of the Fraternity or the Foundation: In August 2021, Boyle resigned as both an officer and a director of the Fraternity and as an officer of the Foundation. He is now permanently banned from serving as a manager, officer, director, or trustee of the DPE or the Foundation either in name or in practice. He may not participate in the governance of either organization in any way, including by acting on behalf of directors or officers, hosting or managing meetings, participating in the management of Foundation real estate, or controlling bank accounts. He is also permanently banned from being paid as a contractor or employee of either organization.
- Abstain from serving as an officer or director of any other DC nonprofit: Boyle is similarly banned from serving as the officer or director of any other District nonprofit for 10 years.
Under the terms of the settlement, DPE and the Foundation will be required to:
- Elect or appoint new, independent officers and directors: DPE must elect or appoint new officers and directors who are independent from Boyle and were not involved in previous governance failures. Anyone who served as an officer or director of DPE or a trustee or officer of the Foundation between January 1, 2017, and February 1, 2023, may not serve as a DPE officer or director for 10 years.
- Use the proceeds from the Alpha Chapter House sale for appropriate nonprofit purposes: The proceeds of the Alpha Chapter House sale must be used to support the organizations’ purposes. The Foundation has proposed a plan to purchase a new property to use as a library, meeting space, and historic and cultural center to benefit the organizations and the public. This plan must be approved by DPE members.
- Make significant changes and provide reports to OAG: The Foundation must begin issuing educational scholarships consistent with its purpose within one year and must provide documentation to OAG on scholarship announcements and disbursement of funds to recipients for three years. The Foundation must also provide annual reports to OAG on the use of the proceeds from the sale of the Alpha Chapter House for five years to ensure funds are used appropriately. Both the Foundation and DPE must comply with DC nonprofit laws governing regular meetings and financial reporting.
A copy of the settlement agreement is available here.
This matter was handled by Assistant Deputy Attorney General Will Stephens and former OAG Attorney Tabitha Bartholomew.
