Attorney General Martha Coakley is suing Robert J. Gee, the former president of a local National Graduate School for Quality Management (NGS), headquartered in Falmouth, and is ordering the school to get rid of the current board and appoint new board members by August.
The state AG’s office filed a civil lawsuit Wednesday against Mr. Gee for collecting over $700,000 a year in compensation and for allegedly using NGS funds to purchase a pair of Mercedes automobiles—one for himself and his wife—and a timeshare on the Caribbean island of St. John for personal use. Mr. Gee also allegedly directed the school to purchase a $3.5 million property on Onawa Lane, Falmouth, that he and his then-wife used as a private residence.
The lawsuit seeks to have Mr. Gee fully pay back the school for the millions he spent.
“We allege that Gee has continually abused his position as the head of this non-profit organization by collecting an exorbitant salary for years, as well as receiving other lavish perks totaling millions of dollars. This extreme breach of trust has been detrimental to the school, whose financial stability has been significantly damaged,” Ms. Coakley said in a statement.
Mr. Gee founded the school and served as president, chief executive officer and executive director until he was fired in 2012. The school, which is in Homeport on Gifford Street, had been in the news that year when The Boston Globe published an investigative story about its questionable financial practices.
According to the complaint, Mr. Gee arranged two compensation agreements with NGS that resulted in his receiving a salary of $700,000 that was not commensurate with the size, assets or complexity of the institution and not on par with his peers. NGS’s enrollment hovers around 200 students. The lawsuit alleges the agreements were created and executed without the knowledge or approval of the board of trustees.
In a separate but related court ruling, the school entered into an agreement Tuesday with the AG’s office that states that unless a new board is appointed and the finances are squared up, the AG would dissolve the school.
“The directors breached their fiduciary duty by failing to implement an internal process to oversee and approve Gee’s compensation and other benefits,” Ms. Coakley said.
Following an investigation, the AGs office said Mr. Gee’s extravagant spending was in part due to the board of directors’ negligence and lack of accountability. From now on, NGS will regularly report budget and enrollment information to the AG’s office.
NGS spokesman Diana Pisciotta said the agreement mirrors the school’s priorities of providing quality programs to working adults and “is consistent with NGS’s strong commitment to operating in a financially responsible way.” She said the board of trustees and school leaders have been cooperating fully with Ms. Coakley’s office during its investigation of NGS and the school’s former president.