According to the Rock Springs Young at Heart Senior Center (RSYAH), former executive director Candace Rachelle Morris set up a limited liability business fraudulently with the express objective of stealing money from the Center.
According to recent court records, Morris created The Early Learning Center, LLC (ELC) with the express intent of utilizing the business as a front for a scam to bilk RSYAH of the money earned through its child daycare service.
According to the formal complaint, Morris, her husband William Morris, and The Early Learning Center, LLC is all accused of conversion, breach of fiduciary responsibility, careless misrepresentation, fraud, constructive trust, fraudulent transfer, and unjust enrichment.
For the purposes of this lawsuit against Morris, the RSYAH asserts that the business she founded as its lone member is a “disregarded entity” for IRS tax reasons.
The Early Learning Center, LLC was given that name by Candace R. Morris “to create confusion with third parties so that it could pretend to be the genuine Early Leaming Center that provides day care services for the children of Sweetwater County and which is owned and operated by RSYAH,” according to the complaint.
Predicted Timeline
The RSYAH complaint details a sequence of occurrences that are said to have led to the creation of what the court file refers to as “The Phony ELC.”
It asserts that the board chose to employ Ryan Rust in place of Morris when he applied for the position of RSYAH Executive Director in 2016.
Then, according to Rust, Morris persuaded him to persuade the RSYAH board to approve a motion that would split the relationship between the senior centre and the daycare centre, thus separating them into two different organizations.
Rust claims that she informed him that the ELC would give RSYAH “a payment roughly similar to the prorated utilities for the rental area” in exchange for using the facility.
The lawsuit says that on June 3, 2016, Morris established the fictitious ELC by submitting articles of organization for “The Early Learning Center, LLC” with the Wyoming Secretary of State, possibly in anticipation of the board approving her request to spin off the Real ELC’s activities to her.
Morris allegedly filed an employer identification number (EIN) application with the IRS on the same day, designating herself as the company’s lone member.
She allegedly opened a Bank of America account shortly after that, and in September 2016, according to the claim, she applied for a job with Tuition Express, a company that processes online payments, and provided them with a voided check in the name of “The Early Learning Center LLC” while using her home address as the location of her business.
The claim goes on to imply that any “Real ELC” parents who might use the Tuition Express app to pay their child’s tuition will do so with this fictitious bank account as their final destination.
Morris named herself and her husband, William Morris, as co-owners of The Early Learning Center, LLC on the Tuition Express “Merchant Transaction Processing Agreement” application, and both of their signatures were included. The Tuition Express Agreement also names Morris and William Morris as Guarantors and has their respective signatures.
As for whether William Morris signed the Tuition Express agreement as an owner and guarantor or whether Rachelle Morris forged her husband’s signature, RSYAH claims it lacks knowledge or information sufficient to think he is a co-owner of the Phony ELC.
Fraud, allegedly
Morris, according to RSYAH, allegedly transformed her rejected proposal to split the senior centre and daycare centre in October 2016 into a plot to steal money from the senior centre.
According to the complaint, her plan was straightforward: she would have the parents of kids attending the Real ELC sign up for a brand-new, internet-based payment system dubbed “Tuition Express.”
In June 2020, when Rust resigned for a new job, Morris was elevated to Executive Director. RSYAH asserts that Morris urged the new ELC director to sign up parents via the Tuition Express app as opposed to accepting payments by check or at the RSYAH facilities’ point of sale system.
When a yearly insurance payment due of about $3,000 was not fully paid, the board members started to have doubts about Morris. The RSYAH bookkeeper replied that the Real ELC’s Commerce Bank bank account was almost empty. The newly appointed director of the learning centre informed the board members that money was actually being sent to a Bank of America account rather than Commerce Bank. According to the lawsuit, this was the first time a second account had ever been mentioned to a board member.
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The claim asserts that because of this alleged financial diversion between January 1, 2018, and June 23, 2022, Morris embezzled more than $970,000.
Morris allegedly “took great care to conceal her fraudulent scheme from the RSYAH board” and used the monies “to finance a luxury lifestyle,” according to RSYAH.
On June 27, 2022, her employment was formally put on indefinite leave without pay. On July 1, 2022, she was fired for cause. William Morris was also mentioned by RSYAH in the case, with the assertion that he knowingly accepted numerous fraudulent transactions as a result of his wife’s actions.
As of Friday, July 8, there is no scheduled date for the case’s court hearings. In its claim, RSYAH asks for both compensatory and punitive damages, as well as equitable relief and court costs.
