Ex-President James Looted Arts Club, N.Y. Says in Suit

Aldon James, former president of the National Arts Club, was accused in a lawsuit by the New York attorney general of abusing his position to obtain apartments and go on personal shopping sprees at the club’s expense.

James exercised “nearly absolute control” over the club’s operations and misused his power to benefit himself and his brother, Attorney General Eric Schneiderman said in a complaint in New York State Supreme Court.

James deprived the club of $1.5 million in rental income and used $250,000 in club funds for personal expenses, including purchases at antique shops, meals and car service, Schneiderman said in a statement today about the lawsuit.

“For James, the National Arts Club was his: he lived there, he ran it, he had no life outside it, and he considered himself therefore entitled to do with the club’s property as he pleased,” the state said in the complaint.

The National Arts Club, located on Gramercy Park South in Manhattan, was founded in 1898 and promotes public interest in the arts. James was ousted as president in March 2011, according to the complaint.

Gerald Shargel, James’s lawyer, said his client served the club well as president and will fight the state.

“Any claim that Aldon James misappropriated money is absurd,” Shargel said today in a phone interview.

State’s Accusations

The state said that James, his brother John and club member Steven Leitner each leased an apartment at the club for below- market rent, and James used his power to obtain for the three of them personal use of as many as eight club apartments as well as offices, board room and other club spaces for no rent.

James bought clothes, accessories and artwork at the club’s expense and charged it for meals, according to the complaint. The charges amounted to $250,000 from 2006 to March 2011.

The state seeks to require James to make restitution and prevent James from serving as officer, director or trustee of any New York charitable organization.

Schneiderman sued under his authority to oversee not-for- profit organizations in New York, according to the complaint.

The case is State of New York v. James, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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