Bit by bit, check after check, $1.7 million vanished from the Boston Center for Adult Education over eight years. More than $565,000 went to the executive director’s partner, for marketing services that did not exist, prosecutors say. Almost $900,000 in checks allegedly were written by the comptroller to himself, and more than $300,000 to groups for his personal benefit, including a youth baseball team in Saugus that he managed.
It was a brazen job, prosecutors say, carried out by a pair of executives at the Bay Village nonprofit who allegedly falsified financial entries and lied to the board of directors, leaving them in the dark.
By the time the center realized something was amiss, it had been stripped of its tax-exempt status, a humbling blow for a Boston institution whose array of classes has long served as a social and intellectual hub.
On Wednesday, the former executives of the center — executive director Susan Brown and comptroller Mark Mitchell, a Saugus selectman — were arraigned in Suffolk Superior Court on larceny charges. Brown’s business partner, Karen Kalfian, who briefly worked for the center in 2005, faces a similar charge.
All three pleaded not guilty and were released on personal recognizance. They are due back in court Sept. 27. Their lawyers did not address the allegations in court.
Just blocks from the Public Garden, the center is an institution in the neighborhood, said Meg Mainzer-Cohen, president of the Back Bay Association. It gives residents the chance to transcend the day-to-day, to learn new things, and become closer to others, she said.
“It serves a very important service for the community. It brings people together, people meet each other, friendships grow out of it,’’ she said.
Prosecutors allege that Mitchell and Brown created fake bookkeeping entries to hide their theft and that Mitchell wrote himself checks totaling almost $900,000, records show. He also made out checks to another employee totaling more than $73,000, forged her signature, and deposited the money in his own account.
“To cover up their embezzlement from BCAE, Brown and Mitchell falsified BCAE’s financial reports and lied to the board about the financial health of the organization,’’ prosecutor Julien M. Mundele wrote in court records.
Last June, the center’s board members discovered their organization had lost its tax-exempt status with the Internal Revenue Service, court records show. Mitchell and Brown told them it was an IRS mistake and in September Brown gave the board a letter that appeared to be from the IRS saying all was well, records show.
It was dated July 25, 2018. Investigators later found the same letter in a Word document on Mitchell’s computer and believe it was falsified, Mundele wrote.
Mitchell told investigators he and Brown “would often fabricate the financial information’’ together, Mundele wrote. Mitchell admitted to putting auditing expenses on the books from 2015 to 2017, even though the center was not audited in those years, records show.
The board also received three years’ of forms saying the organization had filed its 990 forms, a standard accounting statement nonprofits are typically required to file with the IRS. The stamp on the forms bore the name of an accounting firm employee who had not worked there since 2014, records show.
The center’s board of directors said the thefts “victimized the entire BCAE community.’’
“While this has been a challenging experience for all of us, we have a wonderful team whose professionalism and dedication enable us to continue to provide the educational opportunities for adults that we are known for,’’ board members said in a statement.
Suffolk District Attorney Rachael Rollins said the defendants’ “selfish and criminal actions depleted resources that were intended for the improvement of our communities, but more critically depleted the public’s confidence in our institutions.’’
According to prosecutors, Mitchell, 49, said that Brown had told him to cut Kalfian, her partner, weekly checks, records show.
Brown, 66, told investigators she did not know what Mitchell was doing. Kalfian told an investigator in October she did strategic marketing work for the center, and that it was the only client her marketing company had.
“When asked to explain specifically what she did for BCAE, Kalfian paused for a moment and just stated ‘marketing,’ ’’ Mundele wrote. “At this point in the conversation, Brown walked into the residence and ended the conversation by stating that they wanted an attorney present.’’
Brown’s tenure as the BCAE’s executive director lasted from 2009 to 2018. Mitchell joined the nonprofit as comptroller in 2011.
Mitchell, who has been on the Saugus Board of Selectmen since 2015, is also accused of using about $15,000 in campaign funds for personal expenses, according to court records. The records do not detail how he allegedly used the money. Jason A. Tait, a spokesman for the state’s Office of Campaign and Political Finance, said he could not confirm whether the office is investigating Mitchell.
The Saugus town manager could not be reached for comment.
Founded in 1933, the center offers non-degree classes to people looking to expand their knowledge of languages, cooking, computers, or the arts. Its founder, Dorothy Hewitt, wanted to foster learning and creating “for the sheer pleasure of doing so,’’ according to the group’s website.
Gal Tziperman Lotan can be reached at gal.lotan@globe.com .
