A private foundation tied to a Wayne County addiction treatment center spent $96,000 on a building its own officers personally owned and tens of thousands more on unnamed recipients. Its founders sold the building at a $105,000 profit. The foundation absorbed the loss.

Andrew and Barbara Warren Pace founded Little Creek Lodge, a residential addiction treatment center in Lake Ariel, in 2007. In 2009 and 2010, they created two entities called “Little Creek Foundation” — an LLC and a nonprofit corporation. They sold the treatment center in December 2020 to a South Florida investment group. They kept the foundation.

This is the fifth in a series of Pocono Review reports on Wayne County’s publicly funded addiction treatment system.

• Part 1: “Wayne County Has Four Licensed Addiction Providers. It Pays Two”
• Part 2: “PATH Operated at a Loss for Three Straight Years While a Board Member Collected $122,000 as Its Highest-Paid Contractor”
• Part 3: “Zerechak’s Office Cut PATH’s Payments”
• Part 4: “The Treatment Center the County Built Its Pipeline Around Was Sold to a South Florida Investment Firm”

Pennsylvania Secretary of State filings show two active entities named “Little Creek Foundation.” The first is a domestic LLC, filed March 13, 2009, originally registered at 359 Eastern Turnpike (commonly known as Easton Turnpike, or Route 191) — Little Creek Lodge’s address. The second is a domestic nonprofit corporation, filed January 26, 2010, which became the 501(c)(3) private foundation filing the 990-PFs. Both are now registered at 914 Church Street, Honesdale — the office of Alfred D. Beck CPA.

The nonprofit corporation’s amendment history on file with the Secretary of State lists two Articles of Amendment in early 2011 — dated February 23 and March 18. Both list the filing name as “Meagher Law, Inc.” That is the law firm of Matthew Meagher, who now serves as a Wayne County Court of Common Pleas judge. The IRS issued the foundation’s 501(c)(3) ruling letter less than six weeks later, on April 26, 2011.

The foundation’s website describes it as “supported by generous donations from friends and alumni, along with contributions from our affiliate organizations, Little Creek Lodge and Rehab Recordings.” Rehab Recordings is Andy Pace’s music label. Its website says 100 percent of CD sale proceeds go to the foundation.

The Founders’ Property

On October 15, 2020, the Paces bought a house at 542 Main Street in Dickson City, Lackawanna County, for $95,000. The seller was Bernard B. and Jonelle Curran. The deed is recorded in the Lackawanna County Recorder of Deeds as instrument 2020-17760.

Nine months later, in July 2021, the foundation’s IRS Form 990-PF shows it acquired $21,863 in “leasehold improvements” at the property. The same filing — and every subsequent one through 2024 — reports income and expenses tied to “542 MAIN ST DICKSON CITY PA.”

The Paces were listed as officers of the foundation on every 990-PF during that period. Barbara Warren Pace served as Chairperson and Andrew Pace as Vice President through the 2023 tax year.

The foundation reported occupancy expenses at the property of $37,272 in 2021, $29,372 in 2022, and $29,848 in 2023 — a three-year total of $96,492.

It reported program service revenue from the same address of $27,937 in 2021, $29,995 in 2022, and $27,229 in 2023.

In January 2024, the foundation recorded the leasehold improvements as disposed of, taking a $19,875 loss. On the 2024 990-PF, the Dickson City revenue dropped to $350. The Paces no longer appeared on the board.

On June 25, 2024, the Paces sold the property to Joseph M. Ward and Kelly A. Ritter-Ward for $200,000. The deed is recorded as instrument 2024-10766. The Paces paid $95,000 for the house in 2020 and sold it for more than double that amount four years later — after the foundation spent $118,355 on the property.

Who Ran the Foundation

The Little Creek Foundation’s board changed shape over its lifetime.

From 2014 through 2020, the only directors listed on the 990-PF were Barbara Warren Pace and Andrew Pace, both at 1216 The Hideout, Lot 1384, Lake Ariel. The returns listed the person keeping the books as “TAXPAYER.” The preparer was Benjamin Mintz, a CPA in Rockville Centre, New York.

In 2021, the board expanded to nine members. The new additions included Matthew Bartos as President, Alfred D. Beck CPA as Treasurer, Ellen Walko as Secretary, Mike Walko as Director, Katherine Kirkpatrick as Director, Ethan Bobb as Director, and Robyn Mason Davis as Assistant Secretary. The preparer changed to Beck Gogolski & Co Inc., Beck’s accounting firm in Honesdale.

By 2024, the board had contracted to four: Bartos, Beck, Kirkpatrick, and Bobb. The foundation’s address had moved to Beck’s office — the same person preparing its tax returns.

Bartos is not just the foundation’s president. According to his biography on the Little Creek Lodge website, his “primary roles include direct client contact in the form of Substance Use Counseling with those enrolled at Little Creek Lodge and Little Creek Outpatient Services.” He also “heads Little Creek’s admissions departments.”

The foundation’s 990-PF asks whether the organization owns or controls another entity. Every year, it checked “false.”

What the Foundation Paid For

The pattern started at the beginning.

The foundation filed its initial return for a short year starting January 26, 2010. It had no revenue. The Paces loaned it $1,800 from their own pockets. It spent $1,562 — classified as “other expenses” and “taxes” on the 990-PF — and ended the year with $238 in cash and negative net assets.

In 2011, contributions jumped to $36,710. The foundation spent $36,110, nearly all of it. The 990-PF lists $35,419 in “other expenses” with no visible schedule itemizing the recipients. The foundation ended that year with $838 in cash and net assets of negative $962.

The 2012 and 2013 filings show where the money was actually going. Both returns classify the bulk of their spending as “taxes.” The attached schedules break that into line items that are not taxes: “scholarships” to unidentified recipients, “utilities,” “repairs and maintenance,” “insurance,” and “programming.”

In 2012: $15,880 in “scholarships,” $3,751 in “utilities,” $1,515 in “programming,” $989 in “repairs and maintenance,” $498 in “insurance.” The grants section of the return is blank. No recipients are named.

In 2013: $13,583 in “scholarships,” $4,485 in “utilities,” $1,579 in “repairs and maintenance,” $660 in “insurance.”

That’s $29,463 in “scholarships” across two years with no record of who received the money. The foundation owned no real estate. It had no building on its balance sheet. It was paying utilities, insurance, and maintenance on a property someone else owned. Its mailing address was PO Box 942, Hamlin — the same PO Box listed on the Little Creek Lodge website.

In the later years, the line item changed names but the pattern held. Starting in 2017, the 990-PFs list a recurring expense called “TREATMENT COSTS” — classified as charitable disbursements.

The amounts: $9,000 in 2017, $10,000 in 2019, $36,317 in 2020, $16,638 in 2021, $10,570 in 2022, $25,469 in 2023, and $8,323 in 2024.

The filings do not itemize who received these payments.

The foundation’s website says it provides “help through rehabilitation, therapy and 12 Step Programs for recovering addicts.” Its stated affiliate is Little Creek Lodge.

In 2017, the foundation also made a grant of $4,850 to “VARIOUS” at an Easton Turnpike address in Hamlin — the same road where Little Creek Lodge sits.

What the Tax Code Says

Section 4941 of the Internal Revenue Code prohibits the leasing of property between a private foundation and its officers, directors, or substantial contributors. It applies regardless of whether the terms are fair. There is no reasonable-compensation exception.

The foundation reported $96,492 on the “Occupancy” line of its 990-PF — the form field for the costs of housing and operating a facility. Was the foundation leasing the building from the Paces? The depreciation schedule classifies the improvements as “LEASEHOLD IMPROVEMENTS” — a term that describes improvements to a leased property. If it wasn’t a lease, why did the accountant use that classification? If it was a lease, why did the foundation check “false” on the self-dealing questions from 2021 through 2024? And if the foundation was spending $118,355 on a building the Paces personally owned, how did that relationship not trigger a disclosure on any return filed during that period?

IRS Form 990-PFs for Little Creek Foundation Ltd. (EIN 27-1834388) are publicly available through the IRS and ProPublica’s Nonprofit Explorer. Lackawanna County property records are available through the County Assessment Office. Pennsylvania Secretary of State corporate filings are available at file.dos.pa.gov.

Previous reporting in this series: “Wayne County Has Four Licensed Addiction Providers. It Pays Two”, “PATH Operated at a Loss for Three Straight Years While a Board Member Collected $122,000 as Its Highest-Paid Contractor”, “Zerechak’s Office Cut PATH’s Payments”, and “The Treatment Center the County Built Its Pipeline Around Was Sold to a South Florida Investment Firm”.

Pocono Review is an independent investigative news outlet covering Monroe, Wayne, Pike, Carbon, Lackawanna, and Luzerne counties. We report on the government, never for it.

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