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Prisoners Aid Closing Sparks Lawsuits, Recrimination

Questions linger over quiet demise of 143-year-old organization

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A 2007 tax form filed by the PAA lists its second-highest-paid employee, earning $50,000, only as “Karen.”

After 143 years of providing help and housing to former prisoners, Prisoners Aid Association of Maryland has closed its doors for good amid a welter of foreclosures and lawsuits. Why this happened is not yet clear.

“It’s exactly what I warned was going to happen months ago,” Frank Marchant, who served as the nonprofit’s executive director for about a year, says. “The city stopped paying their bills to us. They owe us $140,000. They just refused to pay them. [Baltimore Comptroller] Joan Pratt told them to pay it. So did [City Council President Bernard C.] ‘Jack’ Young.”

Young did not respond to City Paper’s messages asking about PAA. Pratt referred us to the Department of Finance, which did not immediately return a phone call.

Founded in 1869, PAA was older than the United Way when it quietly sank under mounting debts last summer. The nonprofit had about a $2 million budget and operated a food bank, three homeless shelters, and several other programs to help people convicted of crimes re-enter society. The former executive director, Michael A. Brown, was paid $106,000 in 2007 and 2008, and $113,000 in 2009, according to tax records.

In those years—the last for which tax forms are publicly available—about $1 million of the organization’s budget went to “occupancy,’ which apparently was mostly mortgage payments on a dozen or more buildings the company owned throughout the city. The buildings mostly provided housing for PAA’s clients. Marchant says the charity’s demise will put 75 people on the street.

Tenants at 102 East 20th St. are named as defendants in a lawsuit brought forth by Talbot Consulting, a company owned by Stewart D. Sachs, formed in 2001 to invest in real estate. The tenants face eviction this week as Talbot forecloses on the building the tenants rented from PAA. They have countersued, claiming that PAA, Triple Star Management (founded in April of 2012, according to state records), as well as Mark Brown (apparently unrelated to former executive director Michael Brown), Talbot Consulting, and Stewart Sachs allowed the house to fall apart—then moved to evict the tenants when they complained about the wretched conditions. The complaint describes water leaks, rat and ant infestation, and collapsing ceilings, among other typical slum conditions. “The ceiling continues to leak significant amounts of water whenever the toilet in the unit above is flushed,” the complaint says.

PAA bought the house in 1999 for $24,174. Property records indicate increasing real-estate activity by PAA in the 2000s as the market heated up. In May of 2008, for example, PAA borrowed $960,000 from Bay-Vanguard Federal Savings Bank, pledging 3900 Gwynn Oak Ave. and 3237 and 3239 Baltimore Street as collateral. The buildings are currently valued for tax purposes at about $1.1 million.

Marchant says the organization’s financial condition was problematic when he took over last year. “I came in and found a god-awful mess,” he says, “evidence of double and triple billing that had been going through Baltimore Homeless Services for years, with their approval.” Marchant says he told the agency what he found and fired the persons responsible (he won’t name them), and that’s when the city stopped paying the nonprofit. “I think it was to intentionally hurt our organization,” he says.

One of the publicly available tax forms suggests imprecise book-keeping: A person named “Karen”—with no last name and no job title—is listed as the organization’s third-highest-paid employee in 2007, with a $50,000 salary for 40 hours of work per week.

One man who lived in the organization’s men’s shelter at 310 E. Lanvale St. starting in 2010 and volunteered in the office on E. 25th St. says he remembers Brown and Karen getting fired in 2011. The man, who asked that his name be withheld because he fears retaliation, says he is still living in the Lanvale Street building—with no electricity. “I just use it as a place to sleep,” he says. “We still have gas—so hot water, stove, but that’s it.”

The man says he’s pretty sure some former employees were stealing, as Marchant alleges. But, he says, he doesn’t trust Marchant either. “Ask Frank why he didn’t file the paperwork,” the man says. “Because they were getting grants. Ask him what happened to the money.”

Marchant says the city’s non-payment was central to his organization’s collapse. “We work with people coming out of prison too,” he says. “Not everyone there was paying rent, [so] there was no money to fix anything. I told them, ‘Pay your money for a month for rent and I’ll fix these things for you.’ How am I the bad guy?”

Mayor Stephanie Rawlings-Blake’s spokesperson did not respond to an e-mail seeking comment about PAA last week.

Marchant’s claims aren’t new. In a Sun story published April 15, shortly after the lights went out in the East Lanvale Street shelter, he said the city seemed to have some kind of vendetta. Administration officials coolly replied that Marchant’s outfit had not submitted the proper paperwork: “If he’s got a claim for $140,000, he should be able to show us that claim,” said Olivia Farrow, director of the Mayor’s Office of Human Services, according to that story. “It’s as simple as that.”

Marchant says the debacle is anything but simple, and for the organization’s creditors—and clients—that appears to be true.

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