John Paul Funes

Our Lady of the Lake Foundation CEO John Paul Funes.

John Paul Funes, a fundraising maven and high society fixture until being accused of fraud in November, acted alone in diverting more than $810,000 of donations for his own use, according to an independent auditor looking into his questionable financial transactions.

At least some of the money was used improperly to pay the parent of an LSU athlete.

“We've identified approximately $810,000 lost due to fraudulent activity committed by Mr. Funes, former president of the Foundation,” said the report that was released Thursday afternoon by the Catholic Church’s Franciscan Missionaries of Our Lady Health System, which owns the Our Lady of the Lake Regional Medical Center in Baton Rouge.

“The work by the independent third-party firm has confirmed that Mr. Funes acted alone and was the only member of the organization involved," according to the Missionaries statement. "Over several years, he orchestrated a series of fraudulent transactions that involved the purchase and distribution of gift cards, charter flights and payments to individuals, including forged documents, invoices and signatures. He misled hundreds of people in and outside of our organization,” the statement said.

Funes refused comment Thursday. His attorney, Walt Green, said before the Thursday board meetings that he had not been given a copy of the report, which he would have to study before deciding if he could comment.

The forensic investigation also revealed two instances between Funes and LSU. Hospital administrators said the Lake is "not involved and the outcome does not impact our operations, we will not have any further details or comments on this issue."

But LSU confirmed that Lake officials told the university general counsel of two findings involving Funes.

He reportedly gave Foundation money to the parent of an LSU athlete, ostensibly as wages for a job, according to two sources familiar with the investigation who asked not to be identified because both said they were not authorized to speak publicly. Whether LSU officials were aware of Funes' action prior to being alerted by hospital officials is unclear. 

Though one of the audit's findings doesn't involve a student-athlete compliance problem, both instances were reported to the NCAA, said Ernest Ballard, the LSU spokesman, in a statement issued by the university. "The second finding involves the hiring of a parent of a former LSU student-athlete from 2012-2015. The university is actively working with the NCAA to resolve this issue," the statement says.

LSU wouldn't identify the player saying investigators had asked university officials not to comment beyond the prepared statements.

The independent audit was ordered by hospital executives shortly after Funes was fired on Nov. 6. Deloitte Touche Tohmatsu Limited, one of the Big Four international professional services firms, was hired to review the documentation that led to Funes’ firing as well as the foundation’s accounting procedures and financial safeguards.

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The hospital held two separate briefings Thursday for board members.  

Funes became president of the Our Lady of the Lake Foundation in December 2007. He organized some of the region's largest fundraising dances, contests, bingo games, dinners and soirées that were attended by Baton Rouge high society. The foundation has 17 employees and is now headed by Christel Slaughter.

During Funes' tenure, the net assets of the OLOL Foundation’s holdings nearly doubled, growing to $40.2 million for 2017, according to records the foundation must file with the federal Internal Revenue Service. His pay increased to $351,081 – including $42,448 in incentives and other benefits in 2017.

Funes had told friends after being fired that he made “a mistake,” without going into details.

Lake Hospital staff came across the questionable expenditures last fall during a routine review of finances. They dug deeper into the questioned spending and turned over their suspicions to hospital administrators, who then met with Baton Rouge District Attorney Hillar Moore III.

Moore also had not seen a copy of the audit report and would not comment Thursday.

Moore turned over the documents in December to financial fraud detectives with the East Baton Rouge Parish Sheriff’s Office saying they would decide if any criminal behavior occurred and could be prosecuted. Federal investigators have joined the investigation, which is still ongoing.

“The situation that occurred in our Foundation has hurt so many people and we’ve been working to understand the details in order to put things right and move forward,” K. Scott Wester, president and chief executive officer of the Lake hospitals. “My promise is integrity for everyone in the community and the organization to ensure the contributions to our ministry are protected and safe and going toward the good work that our donors trust and expect.”

Auditors gave administrators “a clear road map” to the procedural vulnerabilities that the Missionaries claim Funes exploited. “We’ve already begun immediate changes including additional approvals for expenditures and more oversight on adherence to our policies and processes,” the statement said.

The Franciscan Missionaries are replacing the $810,000 in lost funds during the next 30 days and plan to seek restitution from Funes. 

The Franciscan Missionaries have been through a turbulent week. The Missionaries fired their chief executive officer, Mike McBride, Wednesday night. And their board chairman, James Moore Jr., a Monroe developer who also is on the LSU Board of Supervisors, abruptly quit Thursday morning.

Follow Mark Ballard on Twitter, @MarkBallardCnb.