- exposing the crisis in nonprofit fraud leadership…a crisis of pervasive and monumental waste, fraud, abuse, mismanagement, and malfeasance throughout the charitable sector which costs taxpayers and contributors tens of billions of dollars annually; and,
- seeking reforms that will restore the public’s lost confidence in the sector.
“The sad truth is that charity fraud is on the rise. Serious incidents reported to the Charity Commission almost doubled in 2010/11” (HM Revenue & Customs (HMRC) presentation about UK Charity Commission)
- With undisclosed ownership and/or financial interest he laundered approximately $858,000 from CASTLE in the following companies: Educational Management Alliance (EMA), Kids 2000, Leadership Training Institute (LTI), Cross Tech EduServe, and 2K2 Technologies. He used these companies to launder approximately $858,000 from CASTLE. He was CEO.
- CASTLE paid $478,785 in excess of the stated lease terms with no evidence of additional arrangements or board approval for the excess payments to these that he was partial owner. He was board chair.
- He used shell companies and laundered and stole $367,344 from CASTLE. He was a business associate of the CEO.
- CASTLE issued 30 checks to his companies totaling $200,000 without evidence that goods or services were provided. He was a board member.
- He withdrew money from the company that the aforementioned board member stole.
- He laundered and stole $144,905 from CASTLE through his position as treasurer of CASTLE.
- He laundered and stole $8,829 from CASTLE. He was the brother of the CEO.
- He gave a kickback of $5,000 to the CEO on the sale of a bus.
- They laundered and stole 33 checks from CASTLE totaling $106,625. She was the wife of the CEO.
- He was the owner of a real estate management company and negotiated the lease for CASTLE. On five separate occasions, he gave kickbacks to the CEO totaling $6,425.
Board members and donors overlooked some very elementary practices:
The founder faked her credentials: Linda Ballou, who stressed her medical experience while courting donors, obtained her doctorate from a diploma mill. Two universities she claimed had awarded her advanced degrees had no record of her receiving any academic credentials. She has touted an “extensive medical background,” including decades of work as a registered nurse in surgeries, delivery rooms and a psychiatric facility, she told the newspaper she never had a nursing license, and worked as a certified nursing assistant, or CNA.
Efficacy of her nonprofit: despite constant fundraising, PARK offered no viable programs to the community.
There were no background checks: The Herald-Tribune revealed that the U.S. Securities and Exchange Commission accused Ballou in 2001 of playing a role in a multistate Ponzi scheme by a Florida company that bilked investors out of millions of dollars.
Board members did not attend meetings: State Attorney Ed Brodsky, who serves on PARK's board, said: “I have never attended a board meeting, and do not plan to attend this week's meeting,”
Had Board members that were prominent, but did not exercise due diligence: Beside having one of the regulators of charities on its board, other board members included treasurer Dan M. Smith, a certified public accountant and tax manager and board member Robert W. Browning Jr., a Sarasota attorney.
- Silence: The Impending Threat to the Charitable Sector (Xlibris, 2011)
- Nonprofits: On the Brink (iUniverse, 2006)
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)