Wednesday, September 10, 2014

Madoff-like: Charity, Friends and Business Swindled

by Gary Snyder

In 2013, Steven Wessel founded the Warrior Family Foundation, which was characterized in news releases and on the group's website as a research-based not-for-profit corporation to address the needs of military families. In talking to potential donors, Mr. Wessel often said he had worked for former Presidents Ronald Reagan and George H.W. Bush, according to former members of the foundation as well as being a Oxford graduate.

At a fundraiser at the Four Seasons in New York, Warrior board members said they were surprised to see donation forms on the tables, where their friends, business associates and members of other organizations, including the USO, sat. The board members said that their understanding had been that they wouldn't raise money until they secured nonprofit status. Mr. Wessel, who board members said controlled the foundation's money, never paid the Four Seasons, according to a hotel manager.

It isn't clear how much money the foundation raised. Thomas Clifford, the foundation's president and a longtime business associate of Mr. Wessel, said bank records he reviewed showed about $100,000 had gone into an account, largely from Mr. Wessel directly. Today, the account remains open but has no money in it. He declined to provide full details on where the money went.

In further investigation, federal agents are looking into allegations that Mr. Wessel swindled about $750,000 from a doctor and a financial professional in a Ponzi scheme-style fraud. In court documents and interviews with Mr. Wessel's friends and charity colleagues, a picture emerges of a serial fraudster who used high-level connections to solicit hundreds of thousands of dollars to support a lavish lifestyle, including meals at Michelin-starred restaurants and parties in the Hamptons.

On June 25, less than two months after the dinner, U.S. marshals arrested him at the Upper West Side co-op he shares with his wife.
"Steven Wessel was much less an investment banker than a serial liar," U.S. Attorney Preet Bharara said when the charges were announced.
The U.S. Attorney's Office says Mr. Wessel used newly received funds to pay off past investors and for personal gain. Authorities say he used a shell investment bank, Windsor Capital Investments Ltd., and a personal investment company, Steeplechase USA LLC, to solicit the funds between June 2013 and April 2014.
In one instance, authorities say, Mr. Wessel told an investor who had put in $200,000 that as of Oct. 21, 2013, five securities in the company's long-term portfolio had gained between 27% and 61%. He ended the email with "Just showing off!"
In April, according to the U.S. Attorney's Office, Mr. Wessel told the investor he would be getting about $249,000 back for his investment. At the time, the authorities say, Mr. Wessel's bank account had $4.06.
Authorities say Mr. Wessel received a wire transfer of $550,000 from another investor who believed the money was being used as a bridge loan for a real-estate development. That same day, Mr. Wessel allegedly wrote a bank check to the first investor.


In truth, records from both administrations and the White House's Council of Economic Advisers could not find any record of Mr. Wessel. And Oxford has no record of his attending, according to authorities. (source)



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: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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