Charity CEO facing charges, resigns | The Salt Lake Tribune

He allegedly stole from a firm he founded before starting at the nonprofit

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The CEO of the Children's Miracle Network resigned Friday as he appeared in court on felony charges that he stole and misused money at an insurance company he founded.

James Larry Hall II, 37, allegedly diverted $400,000 in insurance premiums from National Benefit Partner Insurance Agency to his personal account and used it to qualify for his home mortgage in 2003, according to charges filed in 3rd District Court. The money was later returned.

He is also accused of diverting $325,000 from an insurance premium trust fund; $265,000 was used to pay off the balance of a loan for a company airplane, $50,000 went to construction on his house and $10,000 was used for personal expenses, the charges state.

Children's Miracle Network officials said they knew nothing about the charges, which were filed in February, until Wednesday.

Hall resigned Friday "in light of reports concerning private business activities that took place prior to his employment with Children's Miracle Network," charity officials said in a press release.

Based in Salt Lake City, Children's Miracle Network was founded in 1982 by the Osmond family, along with the actor John Schneider. Last year, the charity raised $237 million for its network of 170 hospitals, a spokeswoman said.

Hall was prepared to plead no contest to the six felony counts, which include theft and communications fraud, and pay restitution, according to court documents.

But Judge Deno Himonas refused to accept the plea, saying the state did not have enough evidence that he had committed a crime and challenged a prosecutor to appear Oct. 7 with more proof, Hall's lawyer told the Associated Press.

Hall denies any wrongdoing but was willing to take a plea deal to ''get it out of his life,'' said lawyer Max Wheeler. The activities took place in 2003, three years before Hall was hired as CEO of the Children's Miracle Network. He was paid $333,404 in fiscal 2006, according to the charity's IRS filing. Hall has also served on the Salt Lake Township Planning Commission, according to a charity profile.

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* THE ASSOCIATED PRESS contributed to this story.