In a notable case of executive corruption, Theresa Szwast, the former chief executive officer of the National Independent Statistical Service (NISS), has been sentenced to federal prison after admitting to embezzling millions of dollars from the organization. Szwast’s fraudulent actions spanned nearly two decades, with federal prosecutors detailing her systematic abuse of executive authority for personal gain. The case underscores the risks of governance failure within nonprofit organizations, especially those tasked with compiling and providing critical data to state regulators. nonprofit CEO fraud
Szwast was sentenced to 33 months in prison by the U.S. District Court for the Southern District of Indiana, alongside a hefty restitution order and a fine. In addition to her prison term, the court required Szwast to pay nearly $2.2 million in restitution to NISS and a $5,000 fine. After her incarceration, Szwast will also serve two years of supervised release. This case highlights the importance of financial oversight and transparency, particularly in organizations serving as regulatory support.
The fraud scheme, which began in 2005 and continued until 2022, involved Szwast transferring organizational funds to her personal accounts and writing checks to herself for personal expenses. These included golf outings, travel, and even wine purchases. The case paints a disturbing picture of how executive authority was misused and financial oversight was ignored for years.
Long-Term Fraud Scheme Exposed
Szwast’s role as the CEO of NISS, a nonprofit that compiles insurance data for state regulators, gave her significant responsibility for maintaining accurate financial records. However, instead of hiring an external certified public accountant for annual audits, Szwast took matters into her own hands. She fabricated audit reports and falsified financial statements to conceal the theft, which continued for almost two decades.
Prosecutors revealed that Szwast’s theft began around September 2005, shortly after she assumed the role of CEO. She transferred funds directly into her personal credit accounts and made hundreds of checks payable to herself. The stolen funds were used for personal indulgences, including travel, golf outings, and luxury wine purchases.
Financial Oversight and Governance Failures
The case not only highlights the individual misconduct of Szwast but also raises important concerns about governance within nonprofit organizations. As CEO, Szwast was paid an annual salary of approximately $188,000 in 2022, but her actions showed a blatant disregard for the financial integrity of the organization. The lack of proper financial oversight, particularly her decision to forgo external audits, allowed her fraud to continue undetected for years.
The failure of NISS to prevent this long-running theft points to a significant breakdown in governance, which allowed Szwast to use her executive position for personal gain. The board of directors, tasked with overseeing the organization’s financial health, was misled by fabricated reports, and it wasn’t until an internal investigation uncovered the scale of the theft that the scheme was exposed.
Legal Consequences and Civil Case
Following her indictment in October 2024, Szwast was charged with 11 counts of wire fraud. She eventually pleaded guilty to one count of wire fraud in May 2025 as part of a plea agreement. The remaining charges were resolved through the sentencing process, which concluded with her 33-month prison term.
In a related civil case, the Indiana state court ruled in favor of NISS, awarding treble damages of $1.3 million. The organization initially estimated losses of around $438,226, but the court’s ruling led to a significantly larger compensation award. This civil judgment serves as a stark reminder of the financial and reputational damage that fraud can cause to nonprofit organizations.
Leadership Transition at NISS
After Szwast’s departure in 2022, NISS appointed Jeff Paterson as interim CEO. He was later confirmed as the permanent president and CEO in May 2023. Under new leadership, the organization is working to rebuild trust and restore its financial integrity following the fallout from Szwast’s fraud.
This case also underscores the importance of robust governance practices within organizations that serve as crucial data compilers for state regulators. As the case against Szwast unfolds, it serves as a reminder of the need for transparency, proper financial oversight, and accountability in all sectors, including nonprofits.
