Attorney General's News Release

September 17, 1996

Judge removes two Lichtenstein foundation directors from board; orders them to pay back more than $285,000

St. Louis, Mo. — Two directors of a multi-million dollar St. Louis charitable trust accused of self-dealing by Attorney General Jay Nixon were removed from the foundation board by court order today and ordered to immediately pay back more than $285,000 to the trust.

Senior Judge Robert G.J. Hoester of the St. Louis County Circuit Court found that Allene “Ellie” Lichtenstein and her twin sister, Arlene Frazier, repeatedly engaged in self-dealing, misappropriation of trust funds and breach of fiduciary duties in their paid positions as directors of the Lichtenstein Foundation. Nixon had filed a lawsuit seeking their removal from the foundation board.

“This 49-year-old trust with a long history of charitable giving had become a personal financial playground in the past four years for Ellie Lichtenstein and her sister,” Nixon said. “Their rapacious behavior in using trust money to take trips, buy designer clothing, furs and jewelry for personal use, and pay themselves greatly inflated salaries was inexcusable. The court's action today in removing them and ordering the payment of restitution was entirely appropriate.”

Lichtenstein, paid $125,000 annually, became a foundation director in 1991 and assumed the positions of president and chief executive officer in 1994 upon the death of Daniel Lichtenstein, her husband of four years. Frazier, paid $52,000 annually by the foundation as an administrative assistant and director, cleaned houses prior to her appointment in 1992.

Examples of mismanagement and misappropriation cited by the court included:

• Lichtenstein and Frazier paid and received compensation which was in excess of the five percent cap of the foundation's gross income, as was included in the foundation's articles of incorporation. The compensation also was in excess of the fair market value of the services, if any, that were provided.
• The use of foundation funds to pay legal fees for individual directors associated with a personal lawsuit.
• Personal travel paid by foundation funds to New Orleans, Atlanta and other cities to choose and purchase personal property from local art dealers and auction houses.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

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