Thursday, June 14, 2012

Addictions Seem To Be Driving Up Charity Fraud

by Gary Snyder

Within the last twenty-four hours there have been several reported frauds at charities by leadership that have addictions. In my decade of monitoring charity fraud there is a startling increase in addictions that have lead to the increasing rate of nonprofit embezzlement.

In Tulsa Oklahoma a director at the H.O.W. Foundation Recovery Center is charged with defrauding the nonprofit corporation of more than $1.3 million. He is accused of using checks drawn on the foundation’s bank accounts to pay personal credit card debts for almost 8 years. He maintained exclusive control over the foundation’s bank accounts and the deposit of the foundation’s daily receipts. It is alleged that the executive had battled substance-abuse problems earlier in his life before letting a gambling addiction lead him astray.

This scenario is not uncommon.

Previously, the executive pleaded guilty to stealing $177,000 from the Asperger’s Association of New England and was placed on five years of probation and ordered to pay restitution. Now as head of the Maynard (MA) Retirement Board he is charged with ­embezzling more than $521,000 from the pension fund. The thefts are attributed to an addiction to substance abuse.

Last month a Carson Valley Medical Center accounts payable coordinator got five years probation and restitution for stealing $85,000 from the institution. She had a drug, alcohol and gambling addictions.

A few weeks ago an accountant for the South Carolina Hospitality Association pleaded guilty to embezzling $500,000 to support a gambling addiction.

In York Pennsylvania, two months ago, an office manager at the York Symphony Orchestra pleaded guilty to stealing $221,000 to prop his gambling addiction.

The chief Financial officer at the Philadelphia Archdiocese took more than $900,000 to, in part, payoff his gambling debts.

At JaxCare in Florida an employee stole $500,000 ($800/day addiction). The charity folded as a result.

The Boy Scouts Clovis chapter in California had a treasurer that was arrested for stealing $73,000 to support a gambling habit.

For more than eight years an employee pleaded guilty to stealing $815,000 from the Colorado Association of Executives because of a gambling addiction.

The Colonel responsible handing out money to National Guard families in Arizona is charged with stealing as much as $2 million over 13 years to support a gambling addiction.

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,, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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