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Former United Way Head Sentenced

Fri., June 23, 1995

The former president of United Way of America, William Aramony, was sentenced Thursday to seven years in prison for fraudulently diverting $1.2 million of the charity’s money to pay for a romance with a teenage girlfriend and other benefits for himself and friends.

Randy I. Bellows, an assistant U.S. attorney who was the lead prosecutor in the case, said Aramony had done “extraordinary damage to one of the most important charitable institutions in the United States.”

“The sentence certainly sends a message to leaders of charities that they will be held accountable,” he said.

Aramony was convicted in April of 25 counts of conspiracy, mail and wire fraud, the filing of false income tax returns and transactions involving criminal property.

Two former associates who were convicted in April were also sentenced to prison terms Thursday.

Thomas J. Merlo, 64, who had served as chief financial officer of the organization, was sentenced to 55 months in prison and three years’ probation.

Stephen J. Paulachak, 50, who also served as chief financial officer, was sentenced to 30 months in prison and one year’s probation. Paulachak ran an affiliated group called Partnership Umbrella Inc. that the men used to channel money from United Way of America.

Besides the prison term, Aramony was sentenced to three years’ probation, and he and Merlo were ordered to forfeit a total of $552,000, and to pay small special assessments but no fines. None of the men acknowledged any wrongdoing Thursday or expressed remorse, and all three plan to appeal their convictions and sentences.

U.S. District Court Judge Claude M. Hilton ordered Aramony and Merlo to begin serving their sentences as soon as space was available.

He allowed Paulachak to delay his term until Oct. 1 for personal reasons.


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