Tuesday, March 3, 2015

Charity Fraud: Detecting, Preventing, and Investigating Fraud, Embezzlement, and Charitable Diversion

By Gary Snyder

In light of the disturbing numbers reported by the Washington Post, Congress and numerous state attorneys general have pledged to launch investigations, and reportedly, some have. This will likely lead to even greater scrutiny by government regulators. 

External audits are necessary to ensure that effective financial controls and fraud prevention measures are being followed, but a standard audit is not the method by which nonprofit organizations should expect to detect fraud. The Association of Certified Fraud Examiners (ACFE) reports that less than 4% of frauds are discovered through an audit of external financial statements by an independent accounting firm.

Nonprofits may no longer elect to handle instances of fraud or embezzlement quietly to avoid unwanted attention and embarrassment. As of 2008, a larger nonprofit must publicly disclose any embezzlement or theft exceeding $250,000, 5% of the organization's gross receipts, or 5% of its total assets. A tax-exempt organization whose gross receipts are greater than or equal to $200,000—or whose assets are greater than or equal to $500,000—is subject to additional public disclosure requirements on its IRS Form 990 concerning the embezzlement or theft.

More at Venerable LLP


Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)

Thursday, February 12, 2015

Nonprofit Million Dollar Fraud: It Took Many Years To Detect

by Gary Snyder

The former chief financial officer of the Marine Exchange of the San Francisco Bay Region has been sentenced in federal court in San Francisco to four years and nine months in prison for convictions related to his embezzlement of more than $928,000.


He pleaded guilty in November to two counts of wire fraud, one count of mail fraud and one count of tax evasion, and admitted he embezzled more than $928,000 from his employer.

The Marine Exchange is a nonprofit group that collects and analyzes maritime shipping traffic data.

He worked for the association from December 2007 through April 28, 2014, first as a contractor and then as chief financial officer.

Prosecutors said in a sentencing brief that his embezzlement included $551,511 in checks he cashed from the exchange’s bank account; $257,638 worth of personal goods bought with the organization’s credit cards; and $118,986 in unwarranted payments to a friend whom he hired.

The judge ordered him to pay a total of $1,105,481 in restitution, including $928,000 in repayment to the Marine Exchange and more than $175,000 in taxes due.


He has been in custody since his arrest on May 30, 2014, according to U.S. Attorney Melinda Haag. (source)






Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)

Tuesday, February 10, 2015

It Is Everywhere: Girl Scout Troop Fraud

by Gary Snyder

A sampling of Girl Scout troop embezzlement:

  • A former top official for the Girl Scouts of Greater Los Angeles pleaded guilty to embezzling $370,000, one count of mail fraud and one count of money laundering.


  • Former finance director of the Girl Scout Council of Greater New York has been charged with stealing $310,000 from the nonprofit organization 


  • The Girl Scouts of Orange County reported an embezzlement of more than $100,000 through large checks. The Girl Scouts of Orange County, based in Irvine, has a budget of more than $8 million annually.


  • A Lansdale (PA) woman who led Cub Scout and Girl Scout of America of Eastern Pennsylvania while leader of Troop 7343. The troop is based in Upper Providence and the leader faces charges she has “stolen from children,” to the tune of more than $10,000.


  • A Rhode Island man is charged with stealing the cash box from a group of Cub Scouts


  • A former Cubmaster of Pack 762 was arrested and accused of stealing more than $5000 from her own pack in Elkhart, Ind.


  • Cooley Elementary School (MI) Cub Scout Pack 182 was a victim of a $6000 theft 


  • An assistant to the troop used a debit card of Eagle Cub Scout Pack 54 (WI) for personal use. 


  • Two former troop leaders were indicted on charges they embezzled from the Black Diamond Council (WV) Girl Scouts and used the money for a personal vacation.


  • The Girl Scout CEO and onetime forensic science director pleaded guilty to embezzlements that totaled $22,979.80 from the 12,000-Scout strong Girl Scouts of the Commonwealth of Virginia


  • A former treasurer embezzled up to $11,000 from Troop 80 near Bakersfield CA.


  • A grand jury in Accomack County indicted a woman on one count of embezzling from three scout organizations---Girl Scout Troop 393, Grace United Methodist Church Boy Scout Troop 303 and Grace United Methodist Church Cub Scout Pack 300.


  • A Girl Scout leader was arrested for allegedly embezzling thousands of dollars from a local troop, Girl Scouts of San Gorgonio (CA), Moreno Valley Girl Scout troop


  • Girl Scouts Troop No. 3334 in Fort Morgan pleaded guilty to embezzlement. Her own daughter belonged to the troop. Membership went from 45 to 14 after the theft.


  • A former volunteer bookkeeper for the Girl Scouts troops in Solana Beach and Rancho Santa Fe (CA) pleaded guilty.


  • A Cub Scout mother is charged with embezzling from Cub Scout Pack 138 in Lapeer, MI. She is said to be second person involved in the embezzlement. The prosecutor noted bank records for the pack only go back to 2009, but a second suspect was involved with the group for 23 years.


  • The troop's leader is accused of stealing thousands of dollars from the Girl Scout Troop on Moore, OK.


  • Five-year leader is accused of stealing $18,000 from Troop 2162 in Englewood (OH). She used the money take vacations and to pay personal bills.


  • A troop leader from the Girl Scouts of Rutherford County (TN) was charged with stealing $30,000 from the organization.


  • A former leader of the Douglasville, Ga., Girl Scout Troop 798, allegedly stole nearly $10,000 from the troop. She was treasurer of the Troop.


  • An employee of the Pines of Carolina Girl Scout Council is charged with embezzling $14,000. FBI agents arrested him.


There are many more examples of lack of internal controls and poor oversight. I decided to stop because the point is well made.





Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)

Friday, February 6, 2015

Attorney Caught Stealing $2 Million From Charity

by Gary Snyder

An attorney faces up to nine years in prison after pleading guilty to stealing nearly $2 million from a non-profit cemetery he ran to hide thefts from his law clients.

Timothy Griffin admitted in state Supreme Court in Staten Island that he embezzled the money from the United Hebrew Cemetery. He served as acting president of the charity after the previous president and his wife were convicted of embezzling some $850,000 from the organization in 2012.

Griffin, who once represented cemeteries in Rockland and Westchester counties, was sentenced last week to six months in federal prison for tax evasion and is expected to plead guilty Feb. 19 to additional charges of stealing from his clients in Westchester County Court, New York state Attorney General Eric Schneiderman said.


In his guilty plea to first-degree grand larceny, Griffin admitted stealing from the Staten Island-based cemetery, Schneiderman said in a statement. 

The felony conviction carries a prison sentence of three to nine years. He also owes the cemetery $1.8 million in restitution. (source)






Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)

Another Celebrity Charity Under Fire

by Gary Snyder

An investigation by The Hollywood Reporter raises financial questions about a network of nonprofit organizations and for-profit firms led by Maria Bravo and Alina Peralta’s foundation, close friends of actress and activist Eva Longoria. 

The Global Gift Foundation tax records, financial documents, and public statements touting its fundraising and giving, the article raises questions about how much of the millions of dollars the galas raised goes to charity beneficiaries and how much goes to Ms. Peralta and Ms. Bravo via the related commercial firms. The women style themselves as “philanthropreneurs” pursuing social goals through a hybrid charity/business model, but nonprofit experts interviewed by the Reporter said the contracts between their various entities carry the potential for conflict of interest.

The Reporter says there is no indication of wrongdoing by Ms. Longoria, who serves as honorary co-chair of Global Gift and has won praise as one of Hollywood’s leading philanthropists for her giving and her activism on issues affecting the Latino community. 



Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)

Tuesday, February 3, 2015

$14 Million Diverted From Charities To Private Business

by Gary Snyder


Federal agents arrested the former CEO of a Birmingham (AL) nonprofit -- whose mission was serving the poor and homeless -- on 112 charges including bank fraud, money laundering, and conspiracy. 

The indictment was unsealed with allegations that over six years $14 million has been diverted to private businesses controlled by the CEO.

The thefts were in connection with his employment or involvement with Birmingham Health Care, Central Alabama Comprehensive Health, Birmingham Financial Credit Union and a string of for-profit businesses known as the Synergy Entities.

Indicted earlier on various charges were the former chief financial officer; former bookkeeper; and her son.

The case was investigated by the FBI, IRS Criminal investigation Division and Health and Human Services Office of inspector General.






Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)