Operator of Homeless Shelter Indicted

One day three years ago, FBI agents showed up at a homeless shelter at 87th and Broadway armed with a search warrant. They also visited a homeless shelter on Western Avenue. And another on Norton Avenue.

By day’s end, the agents had carted away records from the shelters run by the American Philanthropy Assn., a community service organization with a long history of assisting the poor.

Last month, the Rev. Toney Chisum Jr., president of the philanthropy association, was accused in a federal indictment of conspiracy to unlawfully obtain more than $500,000 from the federal government, a charge the pastor denies.

The indictment accuses Chisum and a former staff member, Terry Lee Rhodes, of making false claims to the government, false statements and theft of government property -- the $245,000 that the association shelters received from the city homeless authority from 1996 to 1998. Chisum is out of jail on $25,000 bond. Rhodes, who had been homeless and managed all three shelters, has posted bail of $10,000 and also denies the charges.

How a small-time shelter operator in South Los Angeles ended up the target of an FBI investigation baffles Chisum and his supporters. They say an innocent mistake -- a billing error -- has given birth to a nightmare.

The alleged crimes date to 1996, when Chisum participated in the Winter Shelter Program. The program, administered by the Los Angeles Homeless Services Authority, operates with federal money and provides free emergency shelter on the coldest and wettest nights of the year.

Shelter operators must log the number of homeless people provided room and board. They are reimbursed by the homeless authority based on the number of names on the logs.

According to the indictment, Chisum instructed Rhodes to submit fraudulent logs.

“There were a variety of issues, some relayed to us by clients, that led us to alert the federal government that this agency should be investigated,” said Mitchell Netburn, executive director of the homeless authority.

The indictment says the shelter charged some winter shelter participants and submitted names of fictitious people.

The log stated that a woman with the initials D.D. and her four children resided at an American Philanthropy Assn. shelter in January and February 1997. A resident with the initials L.B. allegedly stayed at the shelter for free in February 1998.

In fact, prosecutors allege, the two women paid. The log also includes the names of a Michael Pierce and Jarka or Jaka Peel, allegedly fictitious shelter users.

Chisum learned of the allegations in letters sent to him by the homeless authority in 1999, he said. He searched his records and discovered a problem. In addition to taking part in the free Winter Shelter Program, his group runs a shelter program for which it charges a nominal fee.

Service providers said the practice of charging among smaller shelter operators is common.

Two residents who were in the Winter Shelter Program were billed in error, Chisum said. “When we discovered that, we admitted that and we wanted to make restitution,” he said.

According to Chisum, a $2,000 overpayment was taken out of future reimbursements from the homeless authority, which then ended its funding of American Philanthropy Assn. programs.

Until the FBI agents showed up three years ago, Chisum said, his staff thought the matter was resolved.

“What did we do to deserve this?” Chisum asked. “Was the [accusation] strong enough to have the FBI go to ... all our shelters and get access to all our papers? Twenty-five years in the community doing service and they drag our name through the mud.”

Assistant U.S. Atty. Andrew Cowan said the investigation was sparked by the very people that Chisum purported to help.

“Some of the homeless people complained to the Community Development Department, and they contacted the FBI,” he said.

Chisum’s attorney, William Grayson, declined to comment and advised the pastor to cease conversations with reporters.

In the community he serves, Chisum, 66, is well known for helping needy people and for working hard to keep his shelters open. The Crenshaw resident is also pastor of New Direction Christian Church, which is next to one of his shelters.

Dr. James Mays, a former commissioner with the Los Angeles Homeless Services Authority, said the pastor has motivated scores of homeless women to turn their lives around.

“Rev. Chisum knows the streets,” Mays said. “He knows the situation and he uses the inspiration of religion to fortify the young ladies.”

Boxing promoter Don King was so impressed with the shelter’s work that during a visit he wrote the association a check for $100,000, Mays said. The shelter now bears his name.

For some service providers, the case sheds light on the difficulties faced by those attempting to provide shelter for the needy in South Los Angeles. Shelters are often ill-funded, and those that receive assistance must suffer through long waits for reimbursement checks, advocates said.

“It’s a very difficult program to run,” said Godfrey Ekeke. “That’s the reason I withdrew -- they don’t pay on time.”

Since losing Winter Shelter funding, Chisum has continued to operate. “We have never stopped serving,” he said.