On April 13, 2010, Family Connections, a nonprofit in Austin, Texas, was forced to shut its doors forever, thereby siphoning off services to nearly 32,000 people in the area.. At the heart of this picture was the scandal of fraud committed by the agency’s executive director, Louanne Aponte. In the wake of the agency’s closing, the employees, board members, clients, and greater nonprofit community were left wondering how such an atrocity could occur. The following essay will use each of the three ethical lenses- utility, freedom, and virtue- to examine Aponte’s actions as executive director, and the complexity involved in the scheme. Ultimately, this case served as a necessary reminder to the greater nonprofit community and those that put their trust in them that accountability and internal controls are critical components alongside trust.

Case Background

Louanne Aponte’s involvement with the history of Family Connections dates back to 1990. After four years of working in the finance department of Austin Families,  she was named executive director (Ball & Dexheimer, 2010a). A decade later, in 2004, Austin Families merged with Connections Resource Center to form Family Connections, and Aponte was once again selected to serve as the head of the merged organization (Ball & Dexheimer, 2010a). For five years, she led the organization with no apparent problem- employees felt supported, programs thrived and expanded, and the budget steadily grew.

This facade began to crumble in November 2009. During a routine review of the agency’s annual audit, the state auditor took notice of the company listed as the auditor, Faske Lay & Co. From her professional practice knowledge, the state auditor was well aware that this company did not have the proper licensing to perform the audits being claimed (Ball & Dexheimer, 2010a). When confronted with Faske Lay & Co.’s confirmation that they had not performed the audits, Aponte stated that the audit had instead been performed by University of Texas graduate students in the business school (Ball & Dexheimer, 2010a). This claim was also proven false, thus launching an investigation into the organization’s books in February 2010.

Aponte initially complied with the state auditors in the investigation. However, the state auditors quickly uncovered and informed the board that every audit completed since 2004 had been falsified (Ball & Dexheimer, 2010a). Due to these falsified audits, the agency was in hundreds of thousands of dollars of debt to the IRS and to the bank (Ball & Dexheimer, 2010a). With the board aware of her wrongdoing, Aponte eventually went home sick one day, to never return to the agency, thereby cutting off all contact with those left in the wake of her mess, save for her resignation email (Ball & Dexheimer, 2010a). By the conclusion of the investigation and ensuing lawsuits, Louanne Aponte had been convicted of stealing $1 million from Family Connections, and an additional quarter million from two other organizations she had been involved with on a volunteer basis (Ball, 2011). The result of these events was the loss of funding to Family Connections, as every piece of evidence justifying appropriate use of funding had been falsified. Ultimately, without any funding, the organization was unable to continue providing services to the 32,000 people it had been serving each year, and was forced to fold. 

Ethical Analysis

Value of Utility

Looking at this case through the utilitarian lens, the conclusion would be clear: Aponte’s decision to embezzle money from Family Connections was unethical because doing so stripped the 32,000 clients of their services once the organization closed. Under utilitarian thought, the ethical choice in such a case would be to make the decision based on what would produce the greatest amount of happiness, pleasure, or utility for the greatest number of people. As such, Aponte’s choice of embezzlement and fraud did not align with the utilitarian perspective. Choosing to de-fraud and embezzle a million dollars from an organization provided happiness, pleasure, and utility to Aponte- she used the money to pay off her home and her higher end car, to buy a ski boat, and to purchase gifts for her loved ones. Additionally, by doing so, she likely improved the quality of her life at that point, which could have improved her work performance, which could then have improved the workplace environment for her employees, who could then feel more supported, and then provide better services, and on and on. Therefore, the utility of the embezzlement was not prescribed solely to Aponte, and could potentially be argued to have a semblance of a ripple effect. 

However, the utility described in this situation cannot even compare to the utility of the clients being served. By making the choice to de-fraud Family Connections and swindle an inordinate amount of money, Aponte actively chose to disregard the needs of the 32,000 clients the organization had been serving. Under the utilitarian lens, the organization was serving 32,000 clients- at face value already a far greater number than Aponte and her family. If considering a ripple effect, the services provided assistance to the clients, which impacted their family’s lives, which could affect parent and child educational opportunities, career prospects, wages, and overall quality of life. Through its services, Family Connections was an active contributor to far greater utility than Aponte’s choice to embezzle and directly benefit only her immediate circle.

There are no truly redeeming qualities to this story. However, to properly execute the scheme, Aponte needed to grow the agency’s budget and secure an increasing amount of funding. She accomplished this by inflating numbers of people served through the agency’s programs, misrepresenting programs, falsifying audits, and maintaining absolute control over the agency’s finances (Ball & Dexheimer, 2010b). All of this was done to maintain and improve the reputation and efficiency of the agency, in order to ensure that grants continued to be offered at increasing amounts. Although she eventually pocketed most of this money acquired, and did not tell the truth to do so, she allowed the agency to continue providing services and expanding services to this many people in the following six years after Family Connections formed. If she hadn’t been caught when she was, she would likely have continued to do so, to continue building the scheme, but still continuing to allow service provision. There was no guarantee if any other executive director had been named during the merger that the organization would have seen such incredible success or such incredible failure. This perspective may give more credence to her fraud and embezzlement, as it adds additional utility beyond Aponte and her family. However, at its most concrete definition, making the choice to steal money and force the closing of an agency results in far less utility than was gained, and must be viewed as unethical.

Value of Freedom

When evaluating the ethics of this case from the perspective of freedom, it still remains to be unethical, for a number of reasons. Firstly, Aponte truly did appear to have the freedom of choice in the case. There were no apparent outside forces that were hanging over her decision- she had the freedom to choose to operate the agency above board and with transparency, or to choose to craft a plan to operate in the organizational shadows. Her choice to become involved in a fraud and embezzlement scheme could be argued to come as the result of greed, which could then be considered a force similar to thirst, in which she has no control over why she’s experiencing greed just that she is. However, this is a weak argument, since greed is not the same as thirst- one does not require overwhelming amounts of money solely to survive. 

Furthermore, by falsifying the audits and misrepresenting the organization, Aponte violated the freedoms of everyone else involved- clients, employees, and board members. By preemptively choosing to keep the board as far away from financial records as possible, she violated their freedom to choose to fulfill the entire purpose of their position. A similar thought could also be applied to the agency’s employees. By leaving clients without access to services, or even running the risk of this possible occurring, Aponte most egregiously violated her clients’ rights to freedom. She ultimately was engaging in actions that were disempowering to her clients, as she was taking advantage of them and their struggles in order to make money. Additionally, due to their reliance on Family Connections’ services, committing an action that would force the agency to close stripped the families’ freedom of choice in determining how to move forward. The loss of selection choice in service providers made an impact on the families previously served, as they were left scrambling to find any service at all. 

In essence, she treated each of these groups as a means to an end- the end being $1 million stolen from an nonprofit- rather than ends in and of themselves. Since Aponte violated others’ rights to freedom, liberty, and choice, and since she treated them as a means to an end, her decision and actions were entirely unethical.

Value of Virtue

While this may be the most obvious lens to use to conclude that Aponte’s actions were unethical, it can still seem difficult to exactly why, as one must define what ‘good’ means. However, under this perspective, it is important to go back to the initial choice: to take money from an organization or to not take money from an organization? Viewing it this way, clearly the ethical choice would be not take money from an organization, as that money is used for programs and services that improve the lives of clients. The money in a nonprofit is secured solely for the clients- it is designed to promote human flourishing. Therefore, taking such money would result in loss of funding to needed programs or services, resulting in a reduction in human flourishing, which is what is seen in the Family Connections case. 

However, as mentioned above, there is a complexity to this case, as Aponte falsified the agency’s audits in order to grow the agency. Although not confirmed, one could guess that the motive for growth was not to promote human flourishing, but rather to increase the amount of money being funneled back to Aponte. Regardless of the truth of that statement, it is still important to consider that the agency did continue to operate and grow for six years following a merger. Could an additional six years of providing services to clients promote human flourishing? To an extent, yes, since clients received continuous points of service as necessary for six years. To a greater extent though, the argument should be that it does not promote human flourishing. Leaving families quickly trying to piece together how to receive similar services and care creates undue stress and burden on caregivers, while also implying that a group in need may be without access to service for an extended period of time. To make such an ethical decision, Aponte would have needed to consider these points, and choose the option that reflected the virtue ethics she wanted to model. Ultimately, Aponte did make the choice, but did make the unethical choice, a choice defined to be unethical under all perspectives.

Case’s Influence

In the aftermath of the Family Connections scandal, the local nonprofit community was forced to reconsider the internal controls they had in place to prevent fraud and embezzlement. In the case of Family Connections, there were a number of missteps made by the agency and its board that essentially paved the way for someone to exploit the gaps in internal controls. For example, there were a series of red flags throughout Aponte’s career history that were never considered, as the executive director who hired her could not recall if she had undergone a background check. Going further, no one at the agency ever questioned Aponte’s absolute stronghold over the agency’s finances, demonstrated by the fact that she took home all the financial files on a portable hard drive every single night. The board seems to have placed unwavering trust in Aponte, as they too never demanded to see past audits or financial records.

As a result of these glaring gaps, Family Connections and its clients were ultimately exploited for the gain of one person. Following its closure, employees continued to work to connect clients to other agencies for services or to negotiate with other agencies to completely take over programs. However, there was a great deal of uncertainty about how these services were saved or not saved or re-developed. So many families were left to clean up a mess they never made, and scrambled for services that they may not have ever reached again. The impact this case had on the lives of thousands of families in the Central Texas area cannot be overstated, and must simply be used as a learning tool now.

There is often a tendency to believe that nonprofit organizations are infallible to ethical violations. The trust and belief in the mission is transitively applied to trust and belief in the people involved in the nonprofit. It seems that the thought is that since the work the nonprofit is accomplishing is usually meant for good, then everyone in the nonprofit sector must also be inherently good in order to even be working for such an organization. When one organization or one employee representing an organization acts unethically- Aponte serving as a case in point- then a poor precedent is immediately set, and the general public loses trust not only in the organization, but in the nonprofit sector as a whole.


Ball, A. (2011, June 26). Nonprofits on guard against embezzling after loss of billions. Austin American Statesman. Retrieved from

Ball, A., & Dexheimer, E. (2010, April 18). Death of a nonprofit. Austin American Statesman. Retrieved from

Ball, A., & Dexheimer, E. (2010, May 16). Safeguards failed charity. Austin American Statesman. Retrieved from

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