Albany -- A former adviser for the Colonie-based company Nxivm was indicted Friday on charges he bilked thousands of dollars from a foundation affiliated with the human development group.
Albany County prosecutors allege Joseph O'Hara, 59, of Loudonville, swindled the Ethical Foundation out of $232,607 between May 2004 and August 2005.
O'Hara, a former Albany Firebirds executive and the one-time owner of the semipro Capital Region Pontiacs basketball squad, pleaded not guilty in Albany County Court on Friday to felony grand larceny charges.
After O'Hara's arraignment, his attorney, Brian Devane, said the foundation was owned by his client.
But Alan Korman, an attorney for Nxivm, says O'Hara took money from wealthy Saratoga residents Clare and Sara Bronfman and other Nxivm supporters. Nxivm already has a lawsuit pending against O'Hara.
O'Hara had direct access to the funds because he managed the foundation and served as its attorney, Korman said.
Authorities say Nxivm was looking to establish a scientific research foundation when O'Hara, who had a Massachusetts-based foundation called Humanalysis, was recommended.
The two sides worked out an agreement and Humanalysis soon morphed into the Ethical Foundation, authorities said.
Nxivm, also known as Executive Success Programs, conducts group awareness seminars.
The company put out a statement Friday night saying O'Hara concealed his activity by changing the name of an already established nonprofit foundation affiliated with their company to a new one and then diverting funds from Nxivm's contributors.
"We believe and the evidence will show that Mr. O'Hara was engaged in a methodical and well thought-out plan to steal money from Nxivm and its supporters in a scheme that has far-ranging implications, including the involvement of other individuals who may be named at a later time," said Korman in the document.
They also say the indictment "vindicates the organization from the outrageous accusations made by Mr. O'Hara and his cohorts who have tried to portray us in an extremely negative light in an effort to distract others from uncovering their illegal and unethical business practices against our organization."
Once he parted ways with the company, O'Hara became one of its fiercest critics, branding it a cult. He referred to the company as "an extremely dangerous group" and established the Stop Nxivm/ESP Now Legal Defense Fund.
The indictment unsealed in court Friday says O'Hara, who remains free on $50,000 bail, took the money from the State Street Branch of Charter One Bank in Albany.
Nxivm is among a group of plaintiffs suing O'Hara, alleging he swindled them out of about $2.5 million in payments and loans from 2003 to 2005. That civil action, which was filed in U.S. District Court in Albany in August of 2005, is pending.