Tuesday, November 27, 2012

Nonprofit Fraud: Is the Salvation Army Worthy of Our Contributions?

by Gary Snyder

The former executive director of a Salvation Army facility has been recently charged in a massive theft of thousands of toys and donations from the charity's Toronto warehouse. The Salvation Army announced the theft just weeks ago, saying up to 100,000 items worth about $2 million were allegedly stolen from the facility. The executive had been fired. In January 2005, an employee of the Toronto Salvation Army was charged with stealing in excess of $1 million.
This is on the heels of a tidal wave of similar frauds, over the years, at the Salvation Army:
  • ·       The Salvation Army embezzlement at the New Philadelphia citadel ended in a no contest plea thus admitting that the facts in the charges are true. She was a Salvation Army captain. She had a previous conviction for altering a prescription for pain medication. She was placed on probation. The Dover/New Philadelphia Corps Officers have replaced staff  and restructuring at the Dover facility in under way. 
  • ·       In Tulsa, A former finance director at the Salvation Army took $205,468 in an embezzlement case. It took over three years to catch her.
  • ·       In Atlanta, a Salvation Army employee was indicted on charges she stole $200,000 in financial aid funds. The alleged crimes occurred from 2004 to 2007.
  • ·       The financial manager of the Salvation Army's Newark in New Jersey pleaded guilty to tax evasion and conspiring to embezzle. He admitted to cutting 585 checks worth approximately $385,000, which were supposed to be used for charity purposes. It took seven years to catch him.
  • ·       A human resources director and an office manager for the Salvation Army, in Montgomery, Al was arrested and charged for embezzlement.
  • ·        prison escapee landed a position as planned giving director at Salvation Army Hawaii.  He had deposited at least $150,000 in Salvation Army checks to an account he controlled and received deeds to properties valued at over $200,000.
  • ·      An accountant had been indicted on charges of stealing $166,914 from the New York Division of The Salvation Army. His principal responsibility was keeping the financial and administrative records of two Salvation Army programs. The money he stole from the Salvation Army homeless shelters went to pay restitution on an earlier fraud committed against another Manhattan non-profit organization, the Jewish Telegraphic Agency, a news service for the Jewish community.  For about three years, Keaton worked for JTS organization as an accountant and stole over $24,000.
  • ·       The pastor of a trucking ministry in Oklahoma was charged with taking money from a Salvation Army thrift store while employed as its manager. The investigation led to his 1981 sentence for a felony theft conviction in Maryland. He was extradited to Maryland on a governor's arrest warrant issued in 1984 for violating his probation.
  • ·       Ottawa’s Salvation Army has fired its executive director following an internal audit. Toronto-based Major John Murray of the organization’s public relations and development division, said $240,000 has gone missing from the George St. Booth Centre
  • ·       The operations manager of the Redding Salvation Army thrift was charged with embezzling $98,000 over a period of eight years. 

In the late 1990s, the American Institute of Philanthropy communicated its concern that The Salvation Army’s governing body is rather insular for such a large charity, Lieutenant Colonel Tom Jones, Community Relations and Development Secretary of The Salvation Army said that to get to the position that The Salvation Army is in they must have the absolute integrity and that considerable checks and balances have been put in place over 30 years. Ouch.

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 (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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