When Is Enough Enough?

By Gary Snyder

The Alabama Organ Center is a component of the Health Services Foundation and is the federally approved organ procurement organization for the state of Alabama. Its former director is going to prison for his role in a scheme to take kickbacks from a funeral home that did business with the organ center

The former director of the Alabama Organ Center was sentenced to 13 months in prison. His co-defendant pleaded guilty in November to one count each of conspiracy to commit health care fraud, health care fraud, and mail fraud. He will be sentenced in June. The co-defendant is the former associate director of the Organ Center. Both will both be responsible for paying the restitution. The restitution order was for $489,551.

In exchange for the kickback payments, both defendants promoted the funeral home and recommended its hiring by the organ center for services paid for by the Health Services Foundation. Neither disclosed to the organ center or the foundation that they were receiving payments from the funeral home. Both men falsely represented to the foundation that neither of them had any financial conflicts of interest from customers, suppliers, contractors or competitors, according to court documents.

The investigation revealed no evidence that indicated that either employee endangered the public or donors or recipients of organs or tissue. (link)

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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)

The Typical Light Sentence For Charity Theft

by Gary Snyder

She spent 23 years as a bookkeeper at the charity. Since the authorities could only reconstruct three years of records.  That apparently was sufficient time, however, to steal 181 times totaling $300,000. She forged the executive’s signature numerous times.

Judy Gordon took the money from the Trauma Intervention Program National, Inc. or TIPS. She used the money to pay off her 50 credit cards.

She took a plea deal and was sentenced to only one year in jail. She must serve three years on probation and ordered to pay $300,000 restitution. Since her only income is $1375 per month in Social Security the likelihood of full restitution is remote.  

Quite a deal.

None of the money was recovered.

The executive said that he thought that Gordon loved us as well as the organization. Unfortunately that was not true.

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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)

Charities Report They Raised $117 Billion Without Spending A Penny

by Gary Snyder

There have been a number of questionable issues surrounding charities submission of the Internal Revenue Service Form 990. One that has been a seemingly on-going problem relates to the misreporting of fundraising expenses and further points to how little oversight there is of the charitable sector.

Fully forty-one percent of all 37,987 charities and other nonprofit groups that collected at least $1 million according to their most recent report to the Internal Revenue Service made what experts agree is a ridiculous claim: They raised significant amounts of money without spending a dime to do so, according to a study of federal tax records by Scripps Howard News Service. 

On their annual tax forms 15,389 nonprofits said they spent nothing for advertising, telephone solicitations, mailed donation appeals, professionally prepared grant applications or staff time for face-to-face pleas for contributions while raising total of $116.7 billion.

For example, when informed that 48 of Goodwill Industries' 127 major affiliates reported raising $387 million at no cost, Goodwill Industries International President and CEO Jim Gibbons said the charity will rethink how it calculates its overhead costs in reports to the federal government and the public.


Washington, D.C.-based International Relief and Development  reported no expenses tied to raising the $13.9 million collected by IRD-US and just $14,300 in expenses for the $706 million raised by IRD Inc. in 2010.

Robert Ottenhoff, president and CEO of the nonprofit oversight group GuideStar provided the financial data for the Scripps study and said "it is ridiculous to think an organization could raise significant amounts of money without spending money to do it," The problem has been known at least since the mid-1990s, when the IRS began compiling and publicly releasing data from the Form 990 income-tax statements that most large nonprofits are required by law to file annually.

The Scripps study found that 22,598 nonprofit groups did report fundraising expenses that totaled $14.3 billion, or about 7 cents for every dollar they raised. (link)

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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)

Charity Regulation On The Way?

by Gary Snyder

On the heals of Congressman Xavier Becerra (D-Calif.) at the House Ways and Means Committee’s Subcommittee on Oversight hearing stating that the “nonprofit sector doesn’t do as much as it can to police itself,” New York Governor Andrew M. Cuomo announced the release of proposed regulations to limit spending for administrative costs and executive compensation at state-funded not-for-profit and for-profit service providers.

The new regulations are applicable to organizations that get more than $500,000 from the state in a year and that count state funding as 30 percent or more of their total annual funding. Under the proposal, organizations would be able to exceed the $199,000 cap if they can provide funding for the amount they wish to pay beyond that from other sources, but only if the executive’s total pay falls below “the top 25 percent in the field, as determined by a compensation survey identified or recognized by the applicable state agency.” If a nonprofit wants to go down this path, the compensation must be approved by its board (with a certain number of independent members), which needs to show that it has conducted a review of salary data on comparable positions. The regulations also require nonprofits to spend at least 75 percent of state funding on program services.

The public comment period on the proposed new regulations begins May 30th. (link) (link)

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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)

Up To 200 Charities May Be Hurt By This Nonprofit Fraud

by Gary Snyder 

The FBI is investigating the apparent disappearance of an estimated $1 million in donations from the International Humanities Center.

Humanities Center handled the finances of about 200 nonprofits. It abruptly shut down this year, forcing some groups to curtail their charity work.

A tally by 49 groups that used the center lists their losses at $928,064, although the figure could go higher when the other organizations are added. Some nonprofit directors said they suspect that many of their on-line donations went directly to the center and that some funds were never credited to them, leaving them uncertain of their losses. This despite the fact that Center was supposed to keep the groups' funds separate from money used to operate the umbrella organization. 

The center, which closed its office and took down its Web page in February, served as an umbrella organization for small nonprofits, enabling them to accept tax-deductible gifts. It handled donations, took care of administrative chores, paid bills and acted as a bank, in exchange for 10% of the donations.

The center's founder and executive director, Steve Sugarman, sent a Jan. 16 email to some of the nonprofits telling them the center was closing its doors and that all funds had been properly spent. Sugarman has not responded to emails and his phone is disconnected.

There are indications that the center had been having trouble for at least 18 months before it shut down.

Lynnclaire Dennis, whose group Centre for Social Architecture and Reweaving Harmony banked its donations with the center, wrote an email this year to other nonprofit directors that Sugarman, "in a panic," talked with her in mid-2010, seeking her help in lining up "an investor."

Sugarman, she said in her email, indicated he needed $5 million, $1 million of it within 10 days.

He also told her that a partner had "fled the country," taking all but a few thousands dollars of the donations the center was handling, she said in the email, which she has now passed along to the FBI.

Her comments were similar to those in a letter David DelGrosso, a consultant to the center, sent to project directors earlier this year, saying a former Humanities Center official had cost the center $200,000 "on a deceptive email scam" but had since left the country. DelGrosso said he has been interviewed by a deputy attorney general.  (link)

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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)

This Charity Fraud You Won't Believe

by Gary Snyder

Anyone who has read Nonprofit Imperative has received a healthy dose of bizarre
behavior from the U.S. Navy Veterans Association and its executive Booby Thompson. Well, it continues.

Both Thompson and the U.S. Navy Veterans Association are frauds.

By way of background, over seven years, the man known by the name Bobby C. Thompson raised $100 million from donors believing they were supporting American Navy veterans and their families. He gave over $200,000 in political contributions. Then he disappeared.

After a two-year manhunt for the mysterious fugitive, ‘Thompson’ had amassed dozens of false identities as he moved from city to city. It all ended last week with his capture in Portland, Oregon. This week he was heard in court for the first time, and his defiant message was no surprise to the authorities he eluded and the people he had tricked: He still doesn't want anyone to know who he is.

With his mysterious background, he signs his name 'Mr. X' and he still to this day will not say who he is," said Pete Elliott, the U.S. Marshal who oversaw the manhunt. "Everything this individual has ever said appears to be a lie."

As the head of the U.S. Navy Veterans Association, he oversaw a sophisticated charity operation with chapters in 41 states, and rubbed shoulders with prominent politicians -- even attending fundraisers and posing for photos with President George W. Bush, future House Speaker John Boehner, and U.S. Sen. John McCain.

He was so confident in his ability to give the Navy Vets organization the appearance of a genuine charity, he hired Helen Mac Murray, a former prosecutor of charity fraud in the Ohio Attorney General's Office, to represent the group. As the attorney for the group she was convinced he was legit, but boy was she wrong…and she admitted it.

Authorities now say they believe Thompson had been laying the seeds of his vanishing act for years, creating false identities in cities around the country, and possibly stashing away millions of dollars in cash in storage lockers to help keep him flush. They first tracked him to Boston, and then Providence, where he lived in a small house on Broadway under the name Anderson Yazi.

William Boldin, the deputy U.S. Marshal who helped lead the manhunt, saw Thompson in a bar and he alerted his fellow agents on his BlackBerry, and they followed Thompson as he shopped for groceries under the alias Alan Lacy, and rode the local bus back to his boarding house. Once they knew where he was living, they decided to pounce.

When they handcuffed him, he was carrying three different wallets -- each one holding the credit cards, drivers licenses, social security cards and professional IDs of a different alias.

Investigators searched Thompson's house and found keys to a storage locker where he had stashed two carry-on-sized suitcases. One held stolen birth certificates, social security cards, credit reports, and other papers needed to create new identities. In the other, wrapped in bundles of newspaper, was nearly $1 million in cash. (link)  (link) (link)

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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)

Volunteer Fire Department Hit Twice...Big Theft and Death

by Gary Snyder


The popular Loudoun County (VA) radio personality Paul Draisey, who committed suicide at his Middleburg home last month, is now suspected of embezzling almost $500,000 from the Middleburg Volunteer Fire Department, for which he was the treasurer and his son was the president. “Established financial management practices in the past which were allowed to lapse. As a result, there was not the financial oversight that needed to be taking place. (link)




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: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)