Two Groups Sue Businessman Over Missing Funds : Lawsuits: Lions Club members and officials at an L.A. school claim that the man embezzled nearly $575,000 while serving on their boards.

A local businessman has been sued by two nonprofit organizations for allegedly embezzling nearly $575,000 from the groups while serving on their governing boards.

Frank E. Tilton Jr. allegedly took about $500,000 belonging to the Henry George School of Social Science of Los Angeles while he served as the secretary-treasurer of the Tujunga-based educational foundation, according to a suit filed Monday in Glendale Superior Court.

Members of the Los Feliz Lions Club, of which Tilton had been a longtime member, filed a separate complaint in the same court last week claiming that Tilton absconded with $74,000 earmarked for charity while he was treasurer of the service club.

Tilton has been charged with one count of grand theft and one count of passing a false check with intent to defraud in connection with the missing Lions Club funds, a spokesman from the district attorney’s office said.

Reached at his home Tuesday, Tilton, who is free on bail, declined to comment on any of the allegations.

“It’s shocking,” said Harry Pollard, president of the Henry George School. “As far as we knew, he was completely honest, an upstanding citizen.”

Tilton was described by Pollard and Lions Club members as an outgoing, jovial insurance salesman and financial consultant who laughs a lot and always “had a new joke on hand to tell.” They also said Tilton often talked about money-making ventures on which he had embarked.

Tilton joined the Los Feliz Lions 13 years ago, and he became treasurer of the tight-knit group in 1986.

“We played poker with this guy. We played golf with him. We considered him a close friend,” said one Lions board member, who asked not to be identified.

According to the complaint, a Lions’ audit completed in June, 1991, found that about $74,000 was missing from a club account designated for a hospital, scholarship programs, a YMCA, a youth exchange program and other charitable purposes.

The audit also found discrepancies between bank statements and financial reports that Tilton had presented to club members. When confronted about the matter, Tilton “failed and refused to explain this shortage and discrepancy,” the suit said.

Last August, according to court records, Tilton signed a promissory note agreeing to repay the $74,000 plus interest. The money was due Dec. 30, 1991, but has not been paid, the suit claims.

“The saddest thing of all is that this was charity money that everybody worked hard to raise,” the board member said.

Officials at the nonprofit Henry George School foundation were alerted to possible foul play when a state investigator looking into the Lions matter learned that Tilton had written a check to the club for about $74,000 from a foundation account.

Tilton, who had taken several of the adult economics courses offered by the foundation in the early 1980s, became its secretary-treasurer in 1987.

Upon reviewing their records, Henry George officials concluded that Tilton had misappropriated nearly $500,000, including the proceeds from the sale of several apartment buildings that had been left to the foundation by a former student, Pollard said.

According to the suit, Tilton admitted to foundation officials last month that he owed them $387,000 but has not taken any steps to repay the funds.

Pollard speculated that Tilton may have run into trouble with his businesses and needed some fast money to bail himself out.

“I think he had business reverses; some of his schemes didn’t work out,” he said. “I think he dug in, and dug in and dug in to anything that was available.”