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Justice News

Department of Justice
U.S. Attorney’s Office
Central District of Illinois

FOR IMMEDIATE RELEASE
Friday, March 5, 2021

Former National President of Children's Blanket Charity Sentenced for Stealing More Than $400,000 from the Organization

PEORIA, Ill. –The former national president of Project Linus, Carol Babbitt, 61, was sentenced to more than two years in prison for stealing money from the not-for-profit organization. Project Linus provides handmade blankets for children who are seriously ill, traumatized, or in need. Babbitt, currently of Asheville, N.C., was ordered to serve 30 months in prison and to pay restitution in the amount of $410,250 to Project Linus and $7,856 to the Illinois Department of Revenue. Babbitt was ordered to report to the federal Bureau of Prisons on May 11, to begin serving her prison term.

At the March 4th hearing, prior to sentencing, Babbitt formally entered pleas of guilty to all counts of the indictment which charged her with five counts of mail fraud, eight counts of wire fraud, and five counts of money laundering. Members and directors of the Project Linus organization attended the hearing and provided victim impact statements detailing their devotion to the work of Project Linus and the detrimental impact of Babbitt’s crime to the organization and them personally.

Babbitt served as the organization’s national president, from 2000 to 2016, when Babbitt and the charity’s headquarters were in Bloomington, Ill. In that capacity, she controlled the charity’s operations, including its bank accounts. In 2010, Babbitt began using Project Linus credit cards to pay for personal expenses, including clothing, electronics, pet grooming, furniture, tickets for sporting events, and personal travel. Babbitt used the charity’s funds to make credit card payments, and falsely classified the expenditure in the business ledger to hide her personal use of the funds.

In addition, Babbitt filed false and fraudulent personal tax returns with the state of Illinois in which she failed to report the funds she stole from Project Linus.

The Internal Revenue Service, Criminal Investigation Division; the U.S. Postal Inspection Service; the Illinois Department of Revenue; and the Bloomington Police Department conducted the investigation. Supervisory Assistant U.S. Attorney Darilynn J. Knauss represented the government in the case prosecution.

Topic(s): 
Financial Fraud
Tax
Updated March 5, 2021