Target 8: HARC CEO tells jurors he knew nothing about fraud

HILLSBOROUGH COUNTY, Fla. (WFLA) – The former head of the Hillsborough Association for Retarded Citizens, or HARC, claims he knew nothing about the misuse of clients’ social security benefits, and he blames any wrongdoing on others.

Richard Lilliston testified all day in his federal conspiracy to defraud trial. He is the only witness the defense offered. The defense rested in the week and a half long trial.

Jurors will hear final arguments tomorrow, then go into deliberation.

Lilliston laid the blame for diverting clients’ social security benefits on his second in command, Frank Pannullo.

Five years, ago Target 8 revealed that money, meant to benefit individual clients, in fact, paid for perks for HARC executives, including Lilliston and Pannullo.

Richard Lilliston pleaded ignorant to all of what went down at HARC. He claims he hadn’t read documents he signed at HARC, and was unaware of an illegal endowment that was funded by clients’ money and your tax dollars.

RELATED: Jurors told HARC CEO fired for awarding himself perks

The endowment was set up to shield clients’ money from a $2,500 social security limit, meaning if a client accumulated more than $2,500, he or she would lose social security eligibility. That money was then regularly dumped from the endowment fund into HARC’s operating fund.

Lilliston signed contracts with HARC clients like Robert Franklin, the prosecution claims, to make the money transfer look legal.

Franklin could not read or write and operated on the level of a four-year-old, but Lilliston told jurors he felt most clients who signed the “pooled trust agreement” understood their money was going to be saved. In fact, it was squandered.

Lilliston also testified he didn’t read the agreements, he just signed them and he didn’t know exactly what he was signing. That was all left to Frank Pannullo.

Lilliston blamed everything on Pannullo. He testified that he caught Pannullo in a lie, but didn’t fire him and never questioned Pannullo’s financial reports.

He also gave Pannullo glowing evaluation reports and in 2010, he gave Pannullo a $38,000 raise. The prosecution said that was in exchange for Pannullo doctoring documents, giving Lilliston a bigger pay raise than HARC’s board approved.

Lilliston also told jurors that he only took an $1,800 per month car allowance, because Pannullo hounded him into taking it.

The raise and car allowances were funded, at least in part, by social security benefits.

There’s no argument there. The question is whether Richard Lilliston knew it. He says he didn’t. Pannullo and former CFO Marsha Weisse testified last week that Lilliston not only knew about the fraud, but that he participated and directed it.

Both Pannullo and Weisse entered into plea deals with the government. They are hoping their testimony will win them lighter sentences.

If you have a problem that you think should be investigated contact our Target 8 Helpline at 1-800-338-0808, or contact Steve Andrews at


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