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Delaware Hotline for Problem Gamblers: Engaged in Dodgy Business?

Posted on September 6th, 2010

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For years, the Delaware Council on Gambling Problems has gotten substantial funds amounting to millions from revenue in no-bid contracts. Now, it is facing allegations of mishandling money it has received to help problem gamblers of the state. The money used to pay its office and staff comes from Delaware alone, but the council has apparently coordinated with agencies of other states like Montana and the District of Columbia in letting them receive calls from these states. The agency has also received calls from Maryland and did not charge the calls. Clarke V. Jester, former board president of the council and retired state police officer said that money from Delaware has definitely been used to service these callers from outside the state. Current Executive Director Elizabeth “Lisa” Pertzoff disagreed. After the allegations Jester presented, he was taken out of the board.

The council is under investigation, but the composition of the current board and staff is also questioned, as it seems that it is composed of professionals in the mental health industry, as well as gambling addicts in recovery, a politician and Pertzoff’s husband, who has been convicted of embezzlement. He also happens to be the council’s treasurer. The council has taken part of the state’s slot machine revenue for 15 years now, thanks to a no-bid contract. Pertzoff has been quick to claim that the money that the council received from handling Montana and Washington calls is funneled to a different account of “unrestricted funds” which pays for the services that the gamblers in those states receive. She adds that the finances of the group are an open book and that the funds coming from each state are not combined with each other. Questions about the accuracy of the tax return filed by the council and the identity of the council’s treasurer was not disclosed.

Aside from getting calls from problem gamblers, the council, which has offices in the Community Services Building in Wilmington, also offers clients outpatient treatment, gives health care providers trainings on handling gambling addicted patients on and conducts educational outreach with various groups, including the state’s Department of Education. Among its listed employees are six full-timers, three part-timers and more than twelve call takers who have been trained and get a stipend for answering calls of gamblers. Its governing board is supposed to be unpaid and made up of all volunteers. One of the board’s members is Robert A. Walton, Pertzoff’s husband and an ex-convict after pleading guilty to charges of criminal racketeering and perjury. Atlas Sanitation Co., a company Walton was connected with, was found to be guilty of systematic theft of services from the Solid Waste Authority of Delaware from 1985-87. Aside from being fined close to $1.9 million, he was also sentenced to `0 years in prison.

Another council official with a criminal record is Sachin J. Karnik, the council’s director of prevention and special projects. He has also pleaded guilty to one count of felony health care fraud in 2006. He was sentenced to probation of four years and ordered to pay more than $65,000. Pertzoff, in her husband’s defense said that Walton became because the board “can’t find anyone else that has the requisite experience.” She adds that she was not part of those who selected his husband to be the board treasurer. She also said that her husband has already paid his dues for the crime he committed and currently has no access to the council’s money A review of the IRS return of the council reveals that the council has not been subject to an annual audit, something denied by Pertzoff. Furthermore, the IRS return stipulates that no officer, director or key employee should be related to each other. Pertzoff is the executive director while the treasurer is her husband.

An allegation made in 2007 about misappropriated funds, excessive travel costs and personal use for contract funds had the state auditor run through the council’s books. The allegations were found to be unsupported. Jester has requested for an independent audit or run through the books before he was about to retire because he said he wanted to leave with a clean slate. His requests for audits were flatly rejected by Pertzoff. Up to now, the bookkeeper of the council, David Warner, only uses a improvised formula to know how much the council spends on taking out of state calls. He is positive though, that a new computer and software to be used in the coming months would remedy this concern.