Former co-op bookkeeper strikes deal, will pay $30,000
by MICHAEL J. MISHAK
Weaver Way Co-op.
Facing felony theft charges, the onetime finance manager of Weavers Way Co-op waived her right to a preliminary hearing last week, opting instead to enter a state rehabilitation program that requires partial restitution.
Andrea Sheaffer, who managed the co-op's books since 1989 and later acted as finance manager, was arrested and charged last fall with three counts of theft, in addition to deceptive or fraudulent business practices.
According to the affidavit of probable cause, Sheaffer knowingly misrepresented Weavers Way's finances since at least 1996, culminating in the co-op's near collapse in late 2002.
Sheaffer's admission to the rehab program, dubbed accelerated rehabilitation disposition, is contingent on a $10,000 payment to the co-op, said Chief Assistant District Attorney Leonard Deutchman, head of the Economic and Cyber Crime Unit.
The agreement requires her to pay Weavers Way another $20,000 over the next two years, in addition to issuing a formal apology, he said. Also, she would have to provide an explanation of her conduct upon the co-op's request, he said.
The program, which emphasizes rehabilitation for first-time offenders charged with minor crimes, carries the promise of a clean record upon completion.
"This is a case that cried out for a non-criminal resolution," said Jeffrey Lindy, Sheaffer's attorney. "We're happy we could sit down and come to a resolution with the co-op and the D.A.'s office."
While neither the co-op nor the District Attorney's Office alleged she personally profited from the mismanagement, an internal investigation revealed Sheaffer had surreptitiously transferred more than $60,000 in member loans from an escrow account to three other co-op accounts, apparently to meet shortfalls.
More than $150,000 in loans was solicited from co-op members based on fraudulent financial statements, according to the court record.
Sheaffer's books also allowed co-op officials to obtain a mortgage from the National Co-op Development Bank, which would have funded an expansion project, the affidavit alleges.
From 1996 to 2002, Sheaffer racked up more than $100,000 in bank overdraft fees, a situation that went undetected by the Weavers Way board because she was "the sole source of financial information," the affidavit said.
Chestnut Hill National Penn Bank reimbursed Weavers Way $75,000 of its accumulated overdraft fees, but the co-op was still held liable for the remainder, the affidavit noted.
Ultimately, Weavers Way sustained considerable damage, bringing it to the brink of financial ruin.
Among the costs resulting from Sheaffer's alleged mismanagement: $8,000 to cancel a construction contract for the expansion project; $4,000 in legal fees related to the expansion; $16,000 in accountant fees; and $60,000 in unrefunded overdraft fees.
The Mt. Airy institution lost nearly 60 percent of its accumulated member equity, which had been accruing since the co-op's founding in 1973.
Facing shuttering, Weavers Way was rescued in 2003 after receiving a $100,000 loan from the Philadelphia Industrial Development Corporation and staggering the repayment of an $110,000 debt to United National Foods Inc., one of the co-op's largest suppliers.
Weavers Way's own accountability report, released to members in June 2003, found what it called "abundant evidence of gross financial mismanagement at all levels of the organization." Among the operational and financial deficiencies noted in the report were: poor or absent internal controls, an inadequate record keeping system and an insufficient document trial.
The crisis prompted new financial controls, including mandatory independent audits. Prior to Sheaffer's dismissal in 2002, the co-op had relied on compilations, financial reviews that take an organization's statements at face value instead of scrutinizing the documents for accuracy.
Reached on Monday, Bob Noble, president of the Weavers Way board, said he was satisfied with the case's resolution. "All things considered, I think it's a good outcome," he said. "I think the co-op deserves some kind of restitution if [Sheaffer] is capable."
Noble said the board would assess its needs before asking Sheaffer to help further reconstruct the co-op's finances.
The co-op recently purchased an adjacent property, 555 Carpenter Lane, and will most likely use the space to house its prepared foods offerings and some administrative
