LAWRENCE — A countersuit filed against Carina Pappalardo, former leader of The Pyschological Center, claims she misspent and misused the non-profit’s funds and Amazon account for personal items and trips and gave unauthorized, five-figure bonuses to certain employees.
A criminal investigation by local and state authorities is also underway, TPC leadership confirmed.
According to the countersuit, filed late last month in Essex Superior Court, “Pappalardo engaged in a pattern of blatant misconduct and abuse of authority, including but not limited to funneling significant preferential bonuses to a select group of employees, awarding selective unjustified pay raises, misusing the organization’s Amazon account for personal purchases, and exploiting tuition reimbursement programs for purposes outside their intent.
“She also manipulated work schedules, including those of family members and favored individuals, further demonstrating a systemic disregard for ethical governance, financial integrity and organizational accountability.”
The Psychological Center is a registered non-profit that assists people experiencing homelessness, addiction, and mental-health challenges. It’s funded through the Massachusetts Department of Public Health as well as grants and donations.
Pappalardo joined the center in 2011 as director of human resources and operations and was named CEO in February 2016. She was fired from the agency on Aug. 6, according to lawsuits both she and the non-profit have filed.
She was initially placed on paid administrative leave on Aug. 1 so the center could “investigate an alleged romantic relationship Ms. Pappalardo was having with another Psychological Center employee,” according to her lawsuit, previously filed by attorney Anthony Augeri of Quincy.
With the Aug. 6 termination letter was a final paycheck, which included payment for unused vacation time. The lawsuit disputes the amount of unused vacation time Pappalardo had accrued.
In a press release issued after the countersuit was filed, TPC leadership said the organization previously had not made any comment “regarding her termination or lawsuit due to an ongoing criminal investigation. … TPC is continuing to fully cooperate with local and state authorities as this matter proceeds.”
TPC Board President Penny Hamel said, “We are continuing to keep the focus of our organization where it belongs, on the care, support, and recovery of the people we serve.”
Regarding the claims in Pappalardo’s lawsuit, TPC acknowledged that Pappalardo was inadvertently paid two days late following her termination, via the agency’s automated payroll.
TPC said they also paid her the applicable treble damages, interest, and attorneys’ fees associated with the late payment, and Pappalardo accepted those payments.
“The agency’s payroll company reviewed Ms. Pappalardo’s claim that she was owed for eight additional hours of accrued vacation time and confirmed that no such vacation balance was owed,” according to the release.
Augeri, Pappalardo’s attorney, did not return repeated calls for comment for this story.
Pappalardo, as CEO, had “ultimate authority over all aspects of TPC’s operations,” according to the countersuit. In February 2025, the state said it was investigating two former TPC employees for embezzling money from a Rapid Rehousing Program.
“Pappalardo was also concerned about her potential exposure in connection with the Commonwealth’s investigation” given her direct supervision of both employees and oversight of the Rapid Rehousing Program, according to the countersuit.
On July 29, Pappalardo emailed an attorney who assisted TPC on legal matters and said “that she was very concerned about what was going to happen, that she was sick to her stomach, and that she was not going to be sitting in her office to have someone come arrest her for nothing,” according to the countersuit.
Other allegations in the countersuit regarding Pappalaro include the following:
She was placed on leave after posting multiple photos of herself sitting on the lap of another TPC employee.
She made improper charges on a TPC credit card for trips to the Cliff House in Maine, Nashville, liquor stores, a spa, Ticketmaster, Boston Red Sox and a limousine service were discovered during a review by Hamel.
She used a TPC checkbook to issue unauthorized checks to her children and a select group of TPC employees.
Bank and credit card statements and Amazon transaction history “revealed many inexplicable, unauthorized and/or plainly improper charges, including charges for personal items and purchases.”
She wrote checks to “Pappalardo’s children for tuition reimbursement, despite the absence of proper documentation, and unapproved loans and bonuses issued to select TPC employees.”
A bonus of $36,500 was issued to a worker and friend of Pappalardo’s, and $24,500 to another employee.
A review of a TPC credit card and Amazon account were used to purchase personal items, including patio furniture that cost $3,000.
Some $30,000 “in transactions that appear plainly personal in nature” as well as $70,000 “in charges of irregular, excessive, or otherwise suspicious expenditures,” were detected in TPC credit card statements from 2023 to 2025.
Used a recently purchased TPC property “to meet with one of her romantic partners.”
In early 2025, the TPC board voted to change its name to “The People Center.” The vote was confidential and had not been shared publicly. Pappalardo “failed to take steps to make the name change” but started a “The People Center” Facebook page after she was terminated.
The countersuit seeks repayment of monies Pappalardo “misappropriated,” “used for personal gain,” “used of the gain of her family and friends” and reimbursement expenses, costs and attorney’s fees.
After serving on an interim basis, Holly Howes was recently named the center’s CEO.
Follow staff reporter Jill Harmacinski on Twitter/X @EagleTribJill and on Threads at jillyharma.