Attorney General's News Release

Feb. 17, 1998

Nixon presents $259,000 in restitution to St. Louis charitable foundation

Jefferson City, Mo. — Attorney General Jay Nixon today presented the Lichtenstein Foundation, a St. Louis charitable trust, with a check for $259,760 in restitution paid by a former foundation director who Nixon had sued for misappropriation of trust funds.

The restitution comes from Allene "Ellie" Lichtenstein, who surrendered the money to the Attorney General after he placed a lien on her Ladue mansion and requested that the St. Louis County sheriff auction her home to satisfy a court judgment ordering her to pay the reimbursement to the foundation. The same court order removed Lichtenstein and her sister, Arlene Frazier, from the foundation board.

"Ellie Lichtenstein and Arlene Frazier took advantage of the entire community by living extravagantly through their pilfering of the Lichtenstein Foundation," Nixon said. "We acted aggressively in obtaining a judgment that removed them from the foundation board and also ordered them to pay more than $285,000 back to the foundation." In September 1996, the St. Louis County Circuit Court found that the sisters had repeatedly engaged in self-dealing, misappropriation of trust funds and breach of fiduciary duties in their paid positions as foundation directors.

Examples of mismanagement and misappropriation cited by the court included:

• Compensation for the sisters in excess of the 5 percent cap of the foundation's gross income, as was included in the foundation's articles of incorporation.
• Using foundation funds to pay legal fees for individual directors associated with a personal lawsuit.
• Paying for shopping trips to New Orleans, Atlanta and other cities with foundation funds.
• The purchase of jewelry, watches, artwork, fountains and furs with foundation funds. More than $33,000 in clothing was purchased from Saks Fifth Avenue and worn by the two women to social events. The clothing later was sold for less than $5,000, ostensibly to benefit a charity. Much of the clothing, however, was repurchased by Lichtenstein and other board members at a fraction of its original retail value.

Lichtenstein, paid $125,000 annually, became a 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 to the board in 1992.

Nixon had earlier obtained the resignations of seven other Lichtenstein Foundation board members in an out-of-court settlement in which they agreed to reimburse the foundation more than $55,000.

Senior Judge Robert G.J. Hoester of the St. Louis County Circuit Court appointed three family members to fill positions on the board of directors: David Lichtenstein Jr., a son of David B. Lichtenstein, the creator of the foundation; Doris Lichtenstein, the wife of David Lichtenstein Jr.; and Gayle Lichtenstein, a nephew of David Lichtenstein Sr. The appointed members have since selected additional members to completely fill the foundation board of directors.

Today's presentation of the restitution check was made to David Lichtenstein Jr.

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.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818