Tuesday, April 16, 2013

LGBT Charity Organizations Caught in Frauds

by Gary Snyder

Charity fraud is so pervasive, but few areas evidence it more than with LGBT organizations. Edge points out the magnitude of problem.   

With outsiders throwing their donations behind organizations leading fights on various fronts, insiders are pilfering tens of thousands of dollars. In recent years, gay organizations have been the victim of embezzling. Those who were supposed to be husbanding the organization's resources were instead using the money to pay for lavish lifestyles that ranged from Caribbean vacations to pricey dog walkers.

The most recent was the former director of the Bronx Community Pride Center in New York City, Lisa Winters, was sentenced to at least two years behind bars for embezzling more than $338,000. Court documents show that she used the money for vacations with her partner, $15,000 to a dog walker, and thousands on fine restaurants and shopping trips. The center was forced to close last June after 16 years serving a diverse population in desperate need of its services.

The Bronx Community Pride Center case is the most recent, if the largest such, incident of embezzlement at LGBT and AIDS organizations. Here’s a depressing litany of such cases of LGBT people preying on their own:
  •  A few months ago, a federal investigation found that a former employee at the Nebraska AIDS Project may have embezzled $60,000 of federal grant money.
  •  In 2011, the former executive director of Boston Living Center, an AIDS service organization, pleaded guilty to embezzling more than $125,000. Only a merger saved the organization from disappearing altogether.
  • Also in 2011, the volunteer treasurer and board member at the Billy DeFrank LGBT Community Center in San Jose, Calif., was caught embezzling $40,000.
  • In 2009, the former executive director of Philadelphia’s largest black LGBT organization was found to have embezzled $138,000 in government-allocated funds.
  •  In 2011, the former executive director of Verbena Health, a Seattle health clinic and health center that catered largely to lesbians, was convicted after having gambled away $500,000 in Las Vegas. The clinic was forced to close its doors.
  • From 2007 to 2008, the head of People of Color in Crisis, an AIDS service group in Brooklyn, N.Y., spent $80,000 on items that included gym memberships. POCC was forced to close in 2008.
The swindling happens in a number of ways: bogus payroll claims, skimming, inflated reimbursements, kickbacks with vendors. 

The ramifications nonprofits face after embezzlement scandals nearly always put their future in jeopardy. As was the case in the Bronx, Brooklyn and Seattle, the organizations simply can’t recover and must close their doors.

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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