Employee Accused of Stealing from Jericho Road Ministries

The nonprofit operates the Jericho Road Community Health Center.

Dejan Karlovic appeared by videoconference on Saturday and then in person on Monday before U.S. Judge Jeremiah J. McCarthy, who released him on conditions.

“As the founder and CEO of Jericho Road, I feel it is important for me to assure you that our organization’s service and commitment to caring for the community is unwavering and continues uninterrupted despite this unfortunate event,” Dr. Myron Glick said in a statement. “I believe that the return of a large portion of the stolen funds is possible. I can assure all of our loyal donors that no funds were lost. Moving forward, I am committed to doing the hard work that will ensure Jericho Road has a strong financial control team and policies in place to ensure nothing like this ever happens again.”

Jericho Road employees discovered “a potential theft of funds from our organization” between March 1 and June 26, Glick said. After an internal investigation, the nonprofit notified law enforcement and financial institutions of what appeared to be financial misconduct.

The FBI arrested Karlovic on Saturday.

“Jericho Road is deeply saddened by this situation,” Glick said.

“People can believe in the work that Jericho Road does, and our work continues uninterrupted,” Glick told the Buffalo News Monday.

Attorney Dominic Saraceno, who was retained over the weekend to represent Karlovic, said he needed to know more about the case before commenting.

Myron and Joyce Glick founded Jericho Road Family Practice in 1997 on Buffalo’s West Side with two employees. Then Jericho Road Ministries was founded in 2003 to offer services beyond medical care, and the operation now has a $42 million budget with some 600 employees worldwide, Glick said.

According to its latest tax return, the health center provides a full range of primary medical care to more than 20,000 patients on Buffalo’s east and west sides, and Jericho Road offers pregnancy mentoring, early childhood literacy, English language support and homeownership classes, among other programs. The nonprofit also serves patients in Sierra Leone, Congo and Nepal.

“It’s a big operation and we’ve grown a lot,” Glick said.

“That’s what’s so disappointing,” Glick told The News, describing federal grants as essential to supporting the nonprofit’s work. “The fact that someone would steal money to help us do all of this is what’s so disappointing to see.”

Jericho Road describes its mission as providing “holistic health care to underserved and marginalized communities in Buffalo and around the world to demonstrate the unconditional love of Jesus.”

Glick said he was optimistic that the health center would be able to recover the money, either through fraud insurance or from the defendant himself.

Glick praised the FBI’s quick response. Jericho Road reported its suspicions to the FBI on July 5, and Karlovic was arrested the following week.

“These kinds of things can happen at any institution,” Glick said. “We spent a year or two trying to build a stronger finance team to meet the needs of our organization. We continue to grow and it’s been a challenge,” said Glick, who noted the hiring of a new CFO “who we trust.”

“I think we have a strong team now,” Glick said. “I don’t know if I could have said that nine months ago.”

Karlovic is charged with theft from a program receiving federal funds.

“It’s not more than $600,000, it might be a little less,” Glick said.

An affidavit from FBI Special Agent Luke E. Humphrey, assigned to the white-collar crimes unit of the agency’s Buffalo field office, describes how Karlovic allegedly stole the money.

As the lead grant accountant from October until his employment with Jericho Road ended July 2, Karlovic served as a liaison between Jericho Road’s program departments and financial services. He had some responsibilities for paying expenses with grant funds received by the nonprofit, according to Humphrey.

Karlovic was paid by Jericho Road through deposits into his account at Northwest Bank.

As part of his employment, Karlovic had access to three Jericho Road commercial credit cards issued by M&T Bank. Among the charges made to those credit cards were those related to bills from an entity called D and D. Between March 1 and June 26, there were more than $574,000 in transactions related to D and D, according to Humphrey’s affidavit.

Karlovic created an account with Stripe Payments Co., which operates a technology platform that allows merchants to receive funds from consumers. The account was created in the name of D and D.

In March and April, the account received more than $250,000 in such payments.

Only three credit cards were used to make payments to D and D through the account, each identical to the three Jericho Road commercial credit cards issued by M&T Bank to which Karlovic had access.

Karlovic linked his Northwest Bank account to the Stripe Payments Co. account.

“Thus, funds from credit card transactions processed from Jericho Road to D and D, through the SPC account, were transferred to Karlovic’s Northwest Bank account,” Humphrey said in his affidavit.

When Jericho Road staff became suspicious of transactions involving D and D, they conducted an internal investigation.

“Jericho Road concluded that these fees were not motivated by legitimate business purposes,” Humphrey said.

Since Jericho Road revoked Karlovic’s credit card access, no new purchases at D and D have been made, according to Humphrey.