A federal jury last night convicted former Portland foster care provider Mary Holden Ayala on felony charges of theft, money laundering and filing false tax returns.
After eight days of trial, the lead prosecutor, Assistant U.S. Attorney Donna Maddux and defense Attorney Whitney Boise boiled their arguments over how Holden Ayala spent nearly $1 million meant for foster children to the simplest terms.
Holden Ayala, Maddux told jurors in U.S. District Court in Portland, had created an elaborate facade, claiming over the years to be the caretaker of last resort for hundreds of the state's most challenging children, for which the nonprofit she ran, Give Us This Day, received millions of dollars in state and federal funds.
"Behind closed doors, Maddux told jurors on Feb. 7, "she did more taking than caring."
Boise said his client never meant to steal a penny but was "derailed by her own business incompetence."
WW first revealed Holden Ayala's apparent misuse of foster care money in a 2015 cover story.
Boise, one of the leading members of the city's white collar criminal defense bar (former first lady Cylvia Hayes is a former client) had a difficult set of facts to defend.
State foster care contracts limited the expenditure of funds to the "care and maintenance" of foster children, yet former Give Us This Day employees testified kids in Holden Ayala's care often lived in squalor, didn't get enough to eat and lacked basic toiletries and hygiene supplies.
Meanwhile, records showed, Holden Ayala, now 59, traveled to the Caribbean, Hawaii, Las Vegas and many other places and spent Give Us This Day funds to pay her mortgage and other expenses that didn't benefit children. The prosecution accused Holden Ayala of diverting nearly $1 million for personal use. (She resigned from GUTD in 2015, when state officials forced the non-profit to cease operations.)
Accounting experts for the government and Holden Ayala jousted over the tangled mess of the non-profits finances, which included expenditures on a state-of-the-art recording studio, a North Portland restaurant and an investment property on Martin Luther King Boulevard.
Amid spreadsheets, bank statements and thousands of transactions in which, as Maddux told jurors, Holden Ayala used Give Us This Day as her "personal piggy bank," the competing narratives could get a little confusing.
But photographs, three in particular, provided clarity.
Maddux showed jurors blown-up images of Holden Ayala's closet, custom built by a Give Us This Day employee and stuffed to fullness with luxury goods acquired with Give Us This Day funds. The other two shots showed before-and-after images of Holden Ayala's West Linn living room (after a GUTD-paid renovation, a stairway appeared to float in mid-air) and kitchen, which went from dowdy to House and Garden gorgeous, all courtesy of funds meant for the welfare of foster children.
Boise's explanation? Holden Ayala's lavish spending was justified, he said, because loan GUTD hundreds of thousands of dollars and she never paid herself a salary, so the expenditures were just her taking back monies owed to her. The recording studio, restaurant and real estate investments were well-intentioned but misguided attempts to diversify GUTD's income.
"The business was run so poorly," Boise told jurors, "they would drive to Salem to pick up checks [from the Department of Human Services] and drive their utility bills to the gas and electric company because they'd bounced so many checks."
The jury didn't buy his argument. Shortly after 7 pm Thursday evening, jurors returned a guilty verdict on all counts: five counts of theft (one each for the years 2011 to 2015), and one count each of money laundering and filing false tax returns.
Billy J. Williams, U.S. Attorney for the District of Oregon, applauded the verdict in a statement.
"Children in foster care rely heavily on the agency to which they are entrusted and these agencies are responsible for protecting and caring for them. Mary Holden Ayala grossly neglected her duties and selfishly stole from children in need," Williams said . "This prosecution demonstrates our firm commitment to protecting the integrity of federally-funded social service programs."
Williams' office will now seek the forfeiture of abut $450,000 Holden Ayala made flipping the MLK property with Give Us This Day's money.
Holden Ayala will be sentenced May 29 by U.S. District Judge Marco Hernandez.
Here’s the government’s explanation of how funds flowed in the five years covered by the case: