Nonprofit Founder, Tom Ostrosky, plead guilty to four felonies. Mr. Ostrosky founded The Lazarus Experience “as a prison ministry reentry program that goes into prisons and walks with the incarcerated with the hope of producing disciples of our Lord Jesus Christ.” After The Lazarus Experience stopped operating, the Ohio Attorney General investigated Mr. Ostrosky. He was determined to have stolen over $150,000 of the organization’s monies and elderly donors’ donations. On December 2, 2025, the Lucas County Court of Common Pleas sentenced Mr. Ostrosky to a 10 – 13-year prison sentence and $200,000 restitution penalty.  

Why I Might Care

Nonprofits have become a major contributor to the societal needs and economy of the United States (and globally). However, unlike private companies, nonprofits are subject to greater regulation, locally, state, and federally. The actions of a founder, board member, or executive are scrutinized more closely and can result in many actions, including prison sentences.  

Some Deets

The Lazarus Experience (“TLE”) was a faith-based tax-exempt organization founded in Toledo, Ohio in 2017. Its mission, “to transform lives of the incarcerated by going into prison to build relationships through regular meetings, share Christian practices and core values, teach methods that change thinking and behavior and provide post-release mentoring from Christ-like role models and compassionate support from businesses, churches, and agencies…all to enable successful transition into productive family and community life.”

TLE carried out a three-phase program for participants of the program. “Phase 1 (pre-release) allows prisoners (regardless of offense) to share their stories and begin the journey of transformation. Here is where the foundation for accountability begins by outlining expectations and commitments. It is also the cornerstone of what will be an ongoing relationship with God through daily prayer. Phase 2 is a six to nine month transition phase. As the participants move from prison life to community life, they are supported in implementing their personal 90-day reentry action plan and obtaining all basic needs, including but not limited to: housing, identification documents, employment, clothing, transportation, medical, cell phone service, etc. Phase 3, the post-release phase, brings the program full circle…a graduate is able to provide for himself and his family and give back to the community by taking on the role of disciple to another returning citizen eager to experience rebirth.”

Between 2018 and 2021, TLE raised at least $500,000. A board of at least five members existed. And Mr. Ostrosky was engaged as the Director of Operations. In 2021, the board stopped the operations of TLE because of Mr. Ostrosky overspending against the multiple instructions of the board.

Specifically, the board detailed, “[t]he Program Director reported that funds were being used to support a large number of people being released who were not in our program. He cited Covid among other factors, for the large number being released. The program director tried to give assistant to all he could, even those not within our program. This led to out of control overspending and the needs of program students not being met. Despite being directed on several occasions to stop this practice and only support those within our program, he continued the spending. This behavior gave the Board no choice but to terminate his employment in October 2021 and to shut down and ceased all operations. The Board is winding up the affairs of the entity.”

Sometime thereafter, the Ohio Attorney General, Charitable Law Section launched an investigation and determined Mr. Ostrosky had stolen over $150,000 from TLE and elderly donors. This resulted in an indictment of 4 felonies: Count 1: Engaging in a Pattern of Corrupt Activity (R.C. 2923.32) (F1); Count 2: Theft From a Person in a Protected Class (R.C. 2913.02) (F1); Count 3: Prohibited Acts and Practices for Charities (R.C. 1716.14, R.C. 1716.99) (F2); and Count 4: Telecommunications Fraud (R.C. 2913.05) (F2).

The result was, in less than 1 year, Mr. Ostrosky pleading guilty and being sentenced to a 10 – 13-year prison sentence and $207,650 restitution penalty.

What Do I Think?!

Uhhh…everyone should be careful in the world of nonprofits. Board members, executives, founders, donors, even participants. Innocence can be misunderstood or used, and lack of knowledge can create liabilities. Considering my supporting for-profit and nonprofit clients where the Ohio Attorney General has instituted an investigation, below are a few thoughts regarding proactive measures.  

1. Understand the Roles. Be sure it is clear who has what duty and decision authority within the organization. Remove ambiguity from each board role and operational role by having clear and articulate responsibilities, policies, agreements, and processes. Courts often defer to the governance policies and procedures to examine actions of the organization. Attorney Generals often judge actions of the organization against policies (or lack thereof or ambiguity therein) when deciding their investigations.
   
   A founder is not the final authority of an organization, that authority rests with the board. But, the reality is, the founder is generally the visionary until the organization and board has matured to a space of sustainability, so find the balance and the appropriate seat for the founder. Should the founder be on the board, be the board president, be the executive? The board is not meant to coast, it is meant to be informed, to be active, and to govern. Executives are meant to lead the operations and create the impact of the mission while complying with the decisions of the board.  
2. Understand the Rules. Recognize what rules apply to your organization. Nonprofits are often highly regulated, not just because of the Attorney General (which generally has oversight of charities in each respective state) and the IRS, but because of the specific industry in which the organization operates. There can be licensing requirements, confidentiality obligations, federal agency oversight, county agency oversight, output obligations, reporting rules, and more. Understand what an authority can do with or to the organization. And understand the limitations of those overseeing authorities. Where possible, create a compliance program that ensures a greater shield in times of disagreement with regulatory bodies.  
3. Educate the Board. The board should be educated. This means understanding what it means to be a board, what it means to be a board member for the particular organization, fiduciary obligations, and the organization. A board that is unknowing opens the organization, including the founder, board, and executive leadership, up to liability. The TLE board seemed to act sharply by ceasing operations where the founder/top executive acted conspicuously and against clear board instruction.
4. Keep Comprehensive Documentation. Document, document, document. Receipts, actions, minutes, contracts, and more should all be present. Ensure a clear retention policy is in place that aligns with applicable law, applicable industry regulation, and IRS guidance. This way, if an investigation does sneak up on the organization and documents are not present, the organization can demonstrate its compliance with legally permissible policies. 
5. Don’t Steal. This seems obvious, but we’re here because it wasn’t, at least to one individual. Don’t steal the money or assets of the organization and ensure no improper pecuniary gain exists. Ensure proper permissions, actions, and authorities exist before spending, taking, or earning the organization’s property. Document, document, document.