by Gary Snyder
The past month has been horrid for the Global Fund to fight Aids, Tuberculosis and Malaria. Now it is getting worse. One story claimed that up to two-thirds of some grants went astray, with “astonishing” corruption in some cases. It cited faked invoices, phony training events and other abuses, chiefly involving health ministries in some African countries. That was nothing new with evidence of the misuse of $34 million paid out in Mali, Mauritania, Djibouti and Zambia . Germany, Spain, Sweden and the European Union said they would freeze payments into the Global Fund pending their own inquiries. But few stories have shared the good side of the Global Fund to fight Aids, Tuberculosis and Malaria efforts. It claims to have saved at least 7 million lives, and many more millions of lives have been improved, and mortality rates in the diseases it targets have dropped sharply. The fund’s approach to allocating aid wins plaudits too: it makes countries compete for money based less on their needs than on their ability to get things done. Undoubtedly the plan will stall as a result of the corruption worries, but all are trying to right the ship.
Showing posts with label charity fraud. Show all posts
Showing posts with label charity fraud. Show all posts
Friday, February 18, 2011
Thursday, February 17, 2011
Trusting Amish Out Millions
by Gary Snyder
Monroe Beachy is a 77-year-old Amish man who built up much trust with the Amish people. Beachy spent a quarter-century raising $33 million from 2,600 investors, the overwhelming majority of them fellow members of the Amish community. But Beachy's investment approach allegedly had more in common with the timeless methods of Charles Ponzi and Bernard Madoff. He became treasurer of the Amish Helping Fund, a nonprofit that takes in money from investors and makes loans "in an effort to preserve the Amish way of life," the group said in a court filing. They entrusted him with $2.6 million for the charity. It all collapsed last year when Beachy filed for personal bankruptcy. He said he had lost nearly half of his investors' money. It turned out that he had been running a Ponzi scheme, a bankruptcy trustee alleged, and that he had put the money into speculative investments. As early as 1998, Beachy was insolvent, but he continued to solicit investments from new investors to repay earlier ones, the trustee said. The SEC is investigating.
Monroe Beachy is a 77-year-old Amish man who built up much trust with the Amish people. Beachy spent a quarter-century raising $33 million from 2,600 investors, the overwhelming majority of them fellow members of the Amish community. But Beachy's investment approach allegedly had more in common with the timeless methods of Charles Ponzi and Bernard Madoff. He became treasurer of the Amish Helping Fund, a nonprofit that takes in money from investors and makes loans "in an effort to preserve the Amish way of life," the group said in a court filing. They entrusted him with $2.6 million for the charity. It all collapsed last year when Beachy filed for personal bankruptcy. He said he had lost nearly half of his investors' money. It turned out that he had been running a Ponzi scheme, a bankruptcy trustee alleged, and that he had put the money into speculative investments. As early as 1998, Beachy was insolvent, but he continued to solicit investments from new investors to repay earlier ones, the trustee said. The SEC is investigating.
Tuesday, February 15, 2011
A Million $ A Year From Charity Is Not Enough
by Gary Snyder
Educational Housing Services, a nonprofit, controls more than 5,000 student rooms in Manhattan and Brooklyn. The company has certainly been charitable to its founder and president, George Scott, and his family. The nonprofit has paid him an average of $1 million a year since 2007 and loaned him $55,000 to pay off personal expenses on his American Express card—a year he raked in $926,334 - without a written agreement, filings show. The five-member board approved it and that board has done alright for itself, too. Three directors got consultant jobs, including one who was paid $143,000 for "financial consulting." The company paid Scott’s wife's firm $4.9 million in 2009 for cable, phone and Internet service to his dorms. His wife, Yun (Suki) Scott, sole owner of Student Services Inc., has reaped $15 million from her husband's charity since 2003. Educational Housing Services, which Scott founded in 1987, is the largest provider of off-campus college dorms in the city, with eight facilities.
State Attorney General Eric Schneiderman is looking at EHS' finances in an inquiry that records show began last year. His charities bureau has ordered EHS to provide "clarification and documentation" on "various issues." A spokesman for CUNY, which refers students from six colleges to EHS dorms, said the school was "deeply concerned about the allegations."
Educational Housing Services, a nonprofit, controls more than 5,000 student rooms in Manhattan and Brooklyn. The company has certainly been charitable to its founder and president, George Scott, and his family. The nonprofit has paid him an average of $1 million a year since 2007 and loaned him $55,000 to pay off personal expenses on his American Express card—a year he raked in $926,334 - without a written agreement, filings show. The five-member board approved it and that board has done alright for itself, too. Three directors got consultant jobs, including one who was paid $143,000 for "financial consulting." The company paid Scott’s wife's firm $4.9 million in 2009 for cable, phone and Internet service to his dorms. His wife, Yun (Suki) Scott, sole owner of Student Services Inc., has reaped $15 million from her husband's charity since 2003. Educational Housing Services, which Scott founded in 1987, is the largest provider of off-campus college dorms in the city, with eight facilities.
State Attorney General Eric Schneiderman is looking at EHS' finances in an inquiry that records show began last year. His charities bureau has ordered EHS to provide "clarification and documentation" on "various issues." A spokesman for CUNY, which refers students from six colleges to EHS dorms, said the school was "deeply concerned about the allegations."
Wednesday, February 9, 2011
A Fraud With a Different Twist!!
by Gary Snyder
Newport-Mesa (CA) School Superintendent Jeffrey Hubbard and Karen Anne Christiansen are an interesting couple. Prosecutors have accused Hubbard of two counts of misusing public funds by allegedly giving Christiansen an illegal $20,000 stipend and improperly increasing her monthly car allowance. Christiansen faces more serious charges, including conflict of interest and misappropriation of funds that allegedly netted her $2.2 million. Both were former employees in the Beverly Hills (CA) Unified School District. In addition to their criminal charges, they have bantering back and forth with one another flirtatiously with sexual undertones. In his e-mails, Hubbard's last year with Beverly Hills, he called Christiansen "sweetheart," "hottie" and said "I love you" and "I adore you," according to media reports. There were also sexual references in the e-mails to Christiansen. Christiansen called herself Hubbard's beck-and-call girl, to which he replied "I love that … you can give me head (s up)." In a Sept. 29, 2005, exchange, Christiansen asks for time off because her mother died and Hubbard replies "whatever." He apologized repeatedly after she responded with "Nice sympathetic response!!!! I'm grieving for god sake." Hubbard is accused of giving her the $20,000 stipend that day. Newport-Mesa board chair, Martha Fluor, "I take it with a grain of salt," said. "They are consenting adults." They used official district channels to communicate at both school districts. What do you think? Update: A judge in Los Angeles ruled that there is enough evidence for Newport-Mesa Unified School District Supt. Jeffrey Hubbard to stand trial for alleged misappropriation of funds during his previous job as superintendent in the Beverly Hills schools district.
Newport-Mesa (CA) School Superintendent Jeffrey Hubbard and Karen Anne Christiansen are an interesting couple. Prosecutors have accused Hubbard of two counts of misusing public funds by allegedly giving Christiansen an illegal $20,000 stipend and improperly increasing her monthly car allowance. Christiansen faces more serious charges, including conflict of interest and misappropriation of funds that allegedly netted her $2.2 million. Both were former employees in the Beverly Hills (CA) Unified School District. In addition to their criminal charges, they have bantering back and forth with one another flirtatiously with sexual undertones. In his e-mails, Hubbard's last year with Beverly Hills, he called Christiansen "sweetheart," "hottie" and said "I love you" and "I adore you," according to media reports. There were also sexual references in the e-mails to Christiansen. Christiansen called herself Hubbard's beck-and-call girl, to which he replied "I love that … you can give me head (s up)." In a Sept. 29, 2005, exchange, Christiansen asks for time off because her mother died and Hubbard replies "whatever." He apologized repeatedly after she responded with "Nice sympathetic response!!!! I'm grieving for god sake." Hubbard is accused of giving her the $20,000 stipend that day. Newport-Mesa board chair, Martha Fluor, "I take it with a grain of salt," said. "They are consenting adults." They used official district channels to communicate at both school districts. What do you think? Update: A judge in Los Angeles ruled that there is enough evidence for Newport-Mesa Unified School District Supt. Jeffrey Hubbard to stand trial for alleged misappropriation of funds during his previous job as superintendent in the Beverly Hills schools district.
Thursday, January 13, 2011
Is Haitian Fundraising Helpful or a Rip-off?
by Gary Snyder
Nonprofit Imperative has been monitoring the finances of the relief efforts in Haiti. In the last issue of NI it was noted that roughly 38% of the more than $1.4 billion donated to relief agencies and others was spent. Some charities attribute the slow expenditures to a lack of leadership from the Haitian government and the international community. Give Well (givewell.org) has done an admirably analysis and has a grade card on major disaster relief organizations based on their transparency and accountability to donors. The series of articles provides a framework for the donor to make decisions as to which agency to contribute. You may be surprised as to the results. The study’s admonition is worthy of consideration since it is general overview and not an assessment as to the quality of any organization.
Nonprofit Imperative has been monitoring the finances of the relief efforts in Haiti. In the last issue of NI it was noted that roughly 38% of the more than $1.4 billion donated to relief agencies and others was spent. Some charities attribute the slow expenditures to a lack of leadership from the Haitian government and the international community. Give Well (givewell.org) has done an admirably analysis and has a grade card on major disaster relief organizations based on their transparency and accountability to donors. The series of articles provides a framework for the donor to make decisions as to which agency to contribute. You may be surprised as to the results. The study’s admonition is worthy of consideration since it is general overview and not an assessment as to the quality of any organization.
Monday, January 10, 2011
Oh No, Not the Bowl Games, too
by Gary Snyder
Corruption and deceit seem to be watchwords for the Bowl Champion Series (aka BCS) according to the authors of Death to the BCS: The Definitive Case Against the Bowl Championship Series. In just one chapter (#3) charges are leveled on the CEO of the Alamo Bowl Derrick Fox’s testimony in front of the House Energy and Commerce subcommittee in May 2009. Fox stated before Congress, “Almost all postseason bowl games are put on by charitable groups, and since up to one-quarter of the proceeds from the games are dedicated to the community, local charities received tens of millions of dollars a year.”
The book’s authors, Dan Wetzel, Josh Peter and Jeff Passan, who used a two-year investigation of tax records, bowl contracts, university documents, and dozens of interviews with the power players of college football, to go to town destroying this argument with facts and figures:
“*The 23 tax-exempt bowls produced $186 million in revenue, including $141 million in net assets, but combined to give just $3.2 million (1.7 percent of revenue) to charity. More than half of that charity came from just two bowls, the Orange and Chick-fil-A.
*27 bowls enjoy not-for-profit status and do not pay taxes
*Not a single bowl game is run by a group that can be considered a charity. They are businesses first and foremost.
*23 bowl games with public records received $7.5 million in direct government handouts.
*The Sugar Bowl received $3 million in funding from Louisiana in 2007 and has its own lobbying firm to ensure its public financing. The organization brought in $34.1 million in revenue and gave ZERO money to charity, despite pulling $11.6 million in tax-free profit and $37 million in assets.
*Sugar Bowl executive director Paul Hoolahan received $607,500 in compensation for fiscal 2008. Associate executive director Jeff Hundley took in $375, 732.
*The Sugar Bowl cronies live lavishly spending thousands of dollars every year including, $494,177 for “entertainment” in 2005, $201,226 for “gifts and bonuses” in 2007, $330,244 for “decorations” in 2007, plus many, many more.”
The rest of the chapter deals with the ”corruption that is starting to spring up as bowls like the Fiesta are reportedly contributing to political friends and allies to protect the Cartel system.” The Fiesta acknowledges spending $4 million since 2000 “on lobbyists, trips, dinners, and golf retreats to build relationships with athletic officials who control the BCS and to garner support from politicians.” The Arizona attorney general is currently investigating the matter. The authors deride this and claim the $4 million could be sitting in coffers of colleges and universities, but instead it is wasted to protect the current BCS.
Update from EO Tax Journal: In an IRS complaint against the Orange Bowl Committee, an organization affiliated with the BCS, the BCS's Orange Bowl, which is organized as a public charity, used its charitable funds to treat Orange Bowl executives and college athletic directors to a four-day "complimentary getaway" aboard Royal Caribbean's Majesty of the Seas earlier this year. As shown by the detailed agenda, this Caribbean cruise was a junket. No business meetings were held. Attendees were instead occupied with full-day excursions to Atlantis Resort and CocoCay, a private island, according to Playoff PAC. Also there is more information on bowl spending:
Recent Orange Bowl Spending Examples
-- $331,938 on "parties" and "Summer Splash" in FYE 2004;
-- $1,189,005 on unspecified "entertainment" and "catering" in FYE
2009;
-- $1,017,322 on undifferentiated "event food" and "entertainment"
in FYE 2008;
-- $756,546 on Bowl personnel travel in FYE 2009;
-- $535,764 on "gifts" in FYE 2006;
-- $472,627 on "gifts" in FYE 2008;
-- $111,492 on "postage and shipping" in FYE 2008;
-- $75,896 on "recruitment" in FYE 2008;
-- $60,000 on "governmental relations" in FYE 2008; and
-- $42,281 on "golf" in FYE 2004 and FYE 2006.
Fiesta Bowl Spending
The Fiesta Bowl spends $331,438 per year on "Fiesta Frolic," a golf weekend for college athletic directors and Bowl officials.
• The Fiesta Bowl has doled-out $124,500 in interest-free loans to its executives.
• The Fiesta Bowl has paid $1,217,081 to Arizona lobbying firms.
• The Fiesta Bowl spent $91,020 for "travel and entertainment expenses for public officials" in FY 2009.
Another update from Rick Cohen @ NonprofitQuarterly.org where he summarizes Time Magazine and Business Week articles in which he says bowl organizations are nonprofits – and they pay their CEOs exceptionally well for their nonprofit service. Some examples include Paul Hoolahan of the Sugar Bowl at $645,386, John Junker of the Fiesta Bowl at $592,418, Rick Baker of the Cotton Bowl taking home $490,433, Derrick Fox of the Alamo Bowl earning $438,044. “These bowls are high in the execs' salaries but low on the nonprofitness scale”.
More on how others are looking at it in the NYT.
Corruption and deceit seem to be watchwords for the Bowl Champion Series (aka BCS) according to the authors of Death to the BCS: The Definitive Case Against the Bowl Championship Series. In just one chapter (#3) charges are leveled on the CEO of the Alamo Bowl Derrick Fox’s testimony in front of the House Energy and Commerce subcommittee in May 2009. Fox stated before Congress, “Almost all postseason bowl games are put on by charitable groups, and since up to one-quarter of the proceeds from the games are dedicated to the community, local charities received tens of millions of dollars a year.”
The book’s authors, Dan Wetzel, Josh Peter and Jeff Passan, who used a two-year investigation of tax records, bowl contracts, university documents, and dozens of interviews with the power players of college football, to go to town destroying this argument with facts and figures:
“*The 23 tax-exempt bowls produced $186 million in revenue, including $141 million in net assets, but combined to give just $3.2 million (1.7 percent of revenue) to charity. More than half of that charity came from just two bowls, the Orange and Chick-fil-A.
*27 bowls enjoy not-for-profit status and do not pay taxes
*Not a single bowl game is run by a group that can be considered a charity. They are businesses first and foremost.
*23 bowl games with public records received $7.5 million in direct government handouts.
*The Sugar Bowl received $3 million in funding from Louisiana in 2007 and has its own lobbying firm to ensure its public financing. The organization brought in $34.1 million in revenue and gave ZERO money to charity, despite pulling $11.6 million in tax-free profit and $37 million in assets.
*Sugar Bowl executive director Paul Hoolahan received $607,500 in compensation for fiscal 2008. Associate executive director Jeff Hundley took in $375, 732.
*The Sugar Bowl cronies live lavishly spending thousands of dollars every year including, $494,177 for “entertainment” in 2005, $201,226 for “gifts and bonuses” in 2007, $330,244 for “decorations” in 2007, plus many, many more.”
The rest of the chapter deals with the ”corruption that is starting to spring up as bowls like the Fiesta are reportedly contributing to political friends and allies to protect the Cartel system.” The Fiesta acknowledges spending $4 million since 2000 “on lobbyists, trips, dinners, and golf retreats to build relationships with athletic officials who control the BCS and to garner support from politicians.” The Arizona attorney general is currently investigating the matter. The authors deride this and claim the $4 million could be sitting in coffers of colleges and universities, but instead it is wasted to protect the current BCS.
Update from EO Tax Journal: In an IRS complaint against the Orange Bowl Committee, an organization affiliated with the BCS, the BCS's Orange Bowl, which is organized as a public charity, used its charitable funds to treat Orange Bowl executives and college athletic directors to a four-day "complimentary getaway" aboard Royal Caribbean's Majesty of the Seas earlier this year. As shown by the detailed agenda, this Caribbean cruise was a junket. No business meetings were held. Attendees were instead occupied with full-day excursions to Atlantis Resort and CocoCay, a private island, according to Playoff PAC. Also there is more information on bowl spending:
Recent Orange Bowl Spending Examples
-- $331,938 on "parties" and "Summer Splash" in FYE 2004;
-- $1,189,005 on unspecified "entertainment" and "catering" in FYE
2009;
-- $1,017,322 on undifferentiated "event food" and "entertainment"
in FYE 2008;
-- $756,546 on Bowl personnel travel in FYE 2009;
-- $535,764 on "gifts" in FYE 2006;
-- $472,627 on "gifts" in FYE 2008;
-- $111,492 on "postage and shipping" in FYE 2008;
-- $75,896 on "recruitment" in FYE 2008;
-- $60,000 on "governmental relations" in FYE 2008; and
-- $42,281 on "golf" in FYE 2004 and FYE 2006.
Fiesta Bowl Spending
The Fiesta Bowl spends $331,438 per year on "Fiesta Frolic," a golf weekend for college athletic directors and Bowl officials.
• The Fiesta Bowl has doled-out $124,500 in interest-free loans to its executives.
• The Fiesta Bowl has paid $1,217,081 to Arizona lobbying firms.
• The Fiesta Bowl spent $91,020 for "travel and entertainment expenses for public officials" in FY 2009.
Another update from Rick Cohen @ NonprofitQuarterly.org where he summarizes Time Magazine and Business Week articles in which he says bowl organizations are nonprofits – and they pay their CEOs exceptionally well for their nonprofit service. Some examples include Paul Hoolahan of the Sugar Bowl at $645,386, John Junker of the Fiesta Bowl at $592,418, Rick Baker of the Cotton Bowl taking home $490,433, Derrick Fox of the Alamo Bowl earning $438,044. “These bowls are high in the execs' salaries but low on the nonprofitness scale”.
More on how others are looking at it in the NYT.
Monday, November 15, 2010
Embarrassing Your Children
by Gary Snyder
What could be more shameful and humiliating than to get caught stealing from your child’s piggy bank? Maybe the only thing worse is to have your children see you in court for stealing from his/her little league/soccer/ PTA piggy bank. Unfortunately it is happening with more frequency.
In a matter of days, several separate instances have been reported where parents were caught embezzling tens of thousands of dollars from league coffers. In Central California, a 43-year old mother and coach admitted to stealing $24,000 from the Turlock Youth Soccer League. At virtually the same time, in Michigan, the treasurer of the Livonia City Soccer Club stood mute at his arraignment for stealing over $100,000. In Washington, father and treasurer of the Spartan Baseball Club, a select baseball club for teenagers, was arrested and charged with embezzling over $21,000. In Pennsylvania, the treasurer took $12,000 from the coffers of the Coplay Sports in Allentown. In Wisconsin, the former president of the Green Bay Swim stole $47,000 over a three-year period (she had been serving a six-month jail sentence for a previous offense and also was convicted in 2001 of stealing $3,000). In Michigan, the treasurer of the Marine High School Booster Club was charged for stealing $35,000. In Ohio, the president of the Springdale Youth Boosters Inc. is charged with stealing $76000. In South Carolina, more than $13,000 was allegedly stolen by its vice president/treasurer from the Pinch Elementary School PTO. In most instances the boards were not aware of the illegal activity for about 3 years.
These are just a few examples of an exploding amount of criminality in which parents have access to substantial amounts of money with virtually no checks or balances. In preparation for an upcoming book, I have been able to document 60 instances in which over $350 million has taken from schools and programs. The children are not only being robbed of their opportunities, they are being robbed of their innocence by watching their own parents disappoint them.
Embarrassment does not seem to be a disincentive.
Want to receive the entire Nonprofit Imperative? Email gary.r.snyder@gmail.com
What could be more shameful and humiliating than to get caught stealing from your child’s piggy bank? Maybe the only thing worse is to have your children see you in court for stealing from his/her little league/soccer/ PTA piggy bank. Unfortunately it is happening with more frequency.
In a matter of days, several separate instances have been reported where parents were caught embezzling tens of thousands of dollars from league coffers. In Central California, a 43-year old mother and coach admitted to stealing $24,000 from the Turlock Youth Soccer League. At virtually the same time, in Michigan, the treasurer of the Livonia City Soccer Club stood mute at his arraignment for stealing over $100,000. In Washington, father and treasurer of the Spartan Baseball Club, a select baseball club for teenagers, was arrested and charged with embezzling over $21,000. In Pennsylvania, the treasurer took $12,000 from the coffers of the Coplay Sports in Allentown. In Wisconsin, the former president of the Green Bay Swim stole $47,000 over a three-year period (she had been serving a six-month jail sentence for a previous offense and also was convicted in 2001 of stealing $3,000). In Michigan, the treasurer of the Marine High School Booster Club was charged for stealing $35,000. In Ohio, the president of the Springdale Youth Boosters Inc. is charged with stealing $76000. In South Carolina, more than $13,000 was allegedly stolen by its vice president/treasurer from the Pinch Elementary School PTO. In most instances the boards were not aware of the illegal activity for about 3 years.
These are just a few examples of an exploding amount of criminality in which parents have access to substantial amounts of money with virtually no checks or balances. In preparation for an upcoming book, I have been able to document 60 instances in which over $350 million has taken from schools and programs. The children are not only being robbed of their opportunities, they are being robbed of their innocence by watching their own parents disappoint them.
Embarrassment does not seem to be a disincentive.
Want to receive the entire Nonprofit Imperative? Email gary.r.snyder@gmail.com
Thursday, November 11, 2010
Taking care of himself…through scare tactics
by Gary Snyder
gary.r.snyder@gmail.com
Steven Emerson raised $3,390,000 for his nonprofit, Investigative Project on Terrorism Foundation by telling donors they're in imminent danger from Muslims. He then dumped the money into his private, for-profit company. His management company, SAE Productions, received the $3.3 million. Emerson is the sole/employee/trustee/contractor for the nonprofit, according to the IRS 990 Form. It incorrectly states that the nonprofit did not delegate its management to a management company. The Form readily admits that that the board (solely Emerson) does not have to disclose conflicts of interest (even though the two entities, SAE and Investigative Project on Terrorism Foundation, share a Washington, D.C., address). "Basically," Ken Berger, president of the renowned Charity Navigator said, "you have a nonprofit acting as a front organization, and all that money going to a for-profit. It's wrong. It's off the charts."
gary.r.snyder@gmail.com
Steven Emerson raised $3,390,000 for his nonprofit, Investigative Project on Terrorism Foundation by telling donors they're in imminent danger from Muslims. He then dumped the money into his private, for-profit company. His management company, SAE Productions, received the $3.3 million. Emerson is the sole/employee/trustee/contractor for the nonprofit, according to the IRS 990 Form. It incorrectly states that the nonprofit did not delegate its management to a management company. The Form readily admits that that the board (solely Emerson) does not have to disclose conflicts of interest (even though the two entities, SAE and Investigative Project on Terrorism Foundation, share a Washington, D.C., address). "Basically," Ken Berger, president of the renowned Charity Navigator said, "you have a nonprofit acting as a front organization, and all that money going to a for-profit. It's wrong. It's off the charts."
Wednesday, July 22, 2009
Nonprofit Imperative
…. your nonprofit browser
June 2009
Join us on twitter: NonprofitsNews and ncrp blog (Ponzi effect on charities)
What’s Included:
Skunk of the Month
Illinois Funeral Directors Association
Nonprofit News-In Case You Missed It
Charitable Giving Down; Ronald Reagan Presidential Foundation; Shriners Hospital Cuts
Political/Official Chicanery
Association Exec Pleads Guilty; Detroit and Grand Rapids area Schools Sheriff/Police Officer
Comings and Goings
What Do You Think?
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Are Funeral Homes Meeting Their Maker?
Siren: For the past several months there has been a major problem brewing in Illinois. It has nothing to do with the Governor or his predecessor. It has nothing to do with a politicos’ indictment.
It has to do with one of the largest scams in recent nonprofit history.
It has gained the attention of every major public Illinois official one way or another. According to the secretary of state it was illegal. The Illinois Comptroller wants payback. The Illinois House wants an investigation. The state attorney general wants the perpetrators in court.
The backdrop: A Merrill Lynch employee sold life insurance policies to finance a pre-need funeral trust. He received a commission and provided investment advice on the proceeds that went to the Illinois Funeral Directors Association. An IFDA subsidiary took a piece of the premium for overseeing the trust and its cut exceeded the legally allowed amount. The trust had deficits of $10.4 million in 2001, $39 million in 2006 and as much as $100 million at the present time. The state comptroller wants $10 million to pay for current funerals. Merrill Lynch has offered $18 million to release them from liability and that is not acceptable to many funeral directors. The funeral homes say they are losing an estimated $500,000 each. The undertakers are crying foul and pointing to the failure of the regulators to do their job. There is much at stake including dignified burials for the 40,000 Illinois residents that bought the plans. (The State Journal-Register)
It seems that at least two other states have similar problems and solvency is a risk there as well.
Nonprofit News-
In Case You Missed It:
1. Charitable giving in the United States fell by 5.7 percent last year after adjustment for inflation, the largest year-over-year drop and the steepest decline in the history of the survey. The Giving USA Foundation began tracking American philanthropy 53 years ago. Individuals donated $229.3-billion last year, a decrease of 6.3 percent, accounting for 82 percent of all charitable giving in 2008. Corporate giving fell 8-percent, accounting for 5 percent of all giving. Foundation grants decreased only slightly, 0.8 percent representing 13 percent of the total contributed to charity last year. (WP/Chronicle of Philanthropy)
2. Despite a ban on gifts to lawmakers and limits on campaign contributions, lobbyists and groups that employ them can spend unlimited money to honor members of Congress or donate to nonprofits connected to them or their relatives. Most of the money — about $28 million — went to nonprofit groups, some with direct ties to members of Congress. (USA Today)
3. Investigations have focused on employees' activities involving child pornography possession, identity theft and embezzlement at the Library of Congress. The Library of Congress is charged by Senator Charles Grassley that it is attempting “to influence and/or control" the Office of Inspector General’s investigation. (WP)
4. A longtime Reagan foundation donor is seeking a court-ordered accounting of his contributions, unspecified compensatory damages, and $100,000 in legal fees over misuse of about $200,000 of his donations to the Ronald Reagan Presidential Foundation. (Ventura County Star)
5. The National D-Day Memorial Foundation, which runs the $25 million National D-Day Memorial, “is on the brink of financial ruin,” the AP stated. The foundation’s president insists the memorial’s only chance of survival is to be taken over by the National Park Service or by a college or university. (WSJ)
6. A former payroll manager for the Brooklyn Museum has been charged with stealing more than $620,000 from the nonprofit institution. (wcax.com)
7. A former pastor who once headed a Christian retreat in Hagerstown (MD) pleaded guilty for filing a false application to secure nonprofit status, bank fraud related to $1.75 million and tax evasion. (The Daily Record)
8. A federal judge sentenced a former Austin-based American Cancer Society employee to three years and four months in prison for embezzling over $200,000 from the non-profit organization.
9. Follow up: Fired amid an uproar over her $1.2 million pay package, the former executive sued the Central Carolinas United Way and six current or former officers in April. She accused them of race, age and gender discrimination, among other things, and asked the courts to give her more than $300,000 remaining on her contract, as well as the lucrative pension that prompted the public outcry. The matter was covered in great detail in NI. (charlotteobserver.com)
10. The Shriners hospital system is considering a plan to close six of its 22 hospitals around the country that care for children regardless of parents’ ability to pay. The nonprofit hospital system’s endowment lost more than $3-billion in the past year, which prompted consideration of the closure plan. The organization needs to cut spending by 30 percent. (CNNhealth.com)
11. The bookkeeper that stole $1 million from the Ann Arbor (MI) Amateur Hockey Association pleaded guilty to felony embezzlement. (Ann Arbor News)
12. No reference check: Even though she had two felony convictions in 2000 for food stamp fraud and obtaining aid for dependents, the City of Chattanooga hired Keele Maynor. Now the state is charging her with theft and fraud in addition to the federal charges of wire fraud. She pleaded guilty to federal charges after taking $80,000 by faking that she had cancer. (wrcbtv.com)
13. The second largest foundation in America, Ford Foundation, plans to trim its costs by offering buyouts to one-third of its 550 employees following an almost 30-percent drop in assets last year. (Chronicle of Philanthropy)
14. Two administrators with a New York nonprofit, SBCC Management Corp., that manages low-income housing spent $200,000 using the nonprofit's platinum card for meals, clothes and flight tickets to Puerto Rico for New York State Assembly members, according to a federal indictment filed. (Court House News Service/NYT)
15. The former accounting officer at the Firelake Grand Casino in Shawnee (OK) has been sentenced to nearly three years in prison for embezzling $406,000 from the Citizen Potawatomi Nation. (AP)
16. Remember NI covering the $590 million 2006 convictions and sentences of former Baptist Foundation of Arizona executives? The Arizona Court of Appeals upheld the executives’ conviction. Both were charged with of fraudulent investments and real estate transactions and operating the foundation as a Ponzi scheme.
We flagged these few examples of nonprofit mischief
1. Fowlerville (MI) Agricultural Society <$20,000 (livingstoncommunitynews.com)
2. Central Little League $11,996 (VA) (dailyprogress.com)
3. Great Lakes Energy electric cooperative (MI) $2 million (Gaylord Herald Times)
4. Genesee (MI) High School $4500 (Flint Journal)
5. Grove City Food Pantry and Emergency Services (OH) $50,000 (Columbus Dispatch)
6. Oh Day Aki/Heart of the Earth Charter School (MN) $1.38 million (StarTribune.com)
7. Conyers Public Housing Authority (GA) $130,000 (Portfolio.com)
8. Warrenwood Elementary Parent-Teacher Association (AR) $10000 (FayObserver.com)
9. West Virginia University's Student Dental Hygienist Association $4000 (Pittsburgh-Post Gazette)
10. Conn. Commission on Culture and Tourism $133,000 (wwlp.com)
11. Openhouse (CA) $20000 (The San Francisco Examiner)
12. Ranch Hope (NJ) $350,00 (nj.com)
13. Lexington Area Chamber of Commerce/Community Service Center Inc., (NB) $42,000 (kearneyhub.com)
14. Our Lady of the Sea (MI) <$90,000 (clickondetroit.com)
15. Children's Center at Highland United Methodist Church (NC) $150,000 (wral.com)
16. Brownsville General Hospital (PA) <$400,000 (Valley Independent)
17. Montana Synod of the Evangelical Lutheran Church $17,000 (kpvi.com)
18. Epping Cub Scout Pack 136 (NH) $5000 (seacoastonline.com)
19. Sacred Heart Catholic Church (KS) $74,000 (kfor.com)
20. Hawkins Elementary PTO (MI) >$20,000 (LivingstonDaily.com)
21. West Stanly Colt Club Boosters (NC) unknown (WCNC.com)
*update
Political/public official chicanery (just a few):
1. A former accountant has pleaded guilty to stealing more than $450,000 from the American Society for International Law from 2004 to 2008 and $150,000 from the American Bakers Association between 1998 and 2004.
2. CBS News has learned the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. Commonwealth gets the same benefits as any other charity: it doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor. If Commonwealth were not a charity, it could owe roughly one-third of its profits in taxes. That could add up to millions, on more than $45 million dollars in government contracts. (cbsnews.com)
3. VA authorities have charged four people in one of the largest embezzlement cases in Prince William County and are accused of creating a company in 2004 designed to bid for contracts from the county's information technology office, where they worked. Authorities say $9 million was sent to that company. (AP)
4. As a result of sloppy bookkeeping at 189 of 194 of the Detroit school buildings, the tax-exempt schools may have lost about $1.7 million that was wrongly paid in sales taxes, some of which could result in criminal charges. In addition, the audits showed loans made to school officials using school funds, missing funds from activities, school funds diverted to personal accounts, principals writing and signing checks, untimely deposits and money taken home by staff.
5. A Grand Rapids, (MI) grand jury returned a two-count indictment charging a former school superintendent of the Montcalm Area Intermediate School District (MAISD) with engaging in a conspiracy to accept a bribe--- $60,000 in free goods and services--- from a vendor. (U.S. Department of Justice)
6. A Paso Robles (CA) Police officer and board president of the California Organization of Police and Sheriffs (COPS) and the Civic Development Group (CDG), and the telemarketing firm COPS contracts with, is charged that they engage in “unlawful, unfair, and fraudulent business practices,” by the CA. attorney general. CDG received 85 percent of each donation and COPS retained less than 15 percent. In 2006, no COPS funds were used to help children. Of the $11.4 million in donations received in 2007, only $500 went to help children. (Cal Coast News)
7. The executive director for the Conyers (GA) Public Housing Authority pleaded guilty of embezzling more than $130,000 of housing authority funds.
8. Rep. Joe L. Barton's foundation is giving less than a quarter of the foundation's money to charitable causes, tax records show. The foundation spent more on staff, fundraising and other overhead from 2005 to 2007 - nearly $130,000 in all - than it did on its single $90,000 contribution to a charitable cause. The congressman's daughter-in-law runs the foundation as an unpaid executive director. The top Republican on the House Energy and Commerce Committee has raised donations from the industries his committee oversees. (Washington Times)
9. A former Skowhegan (ME) police officer received a nine-month suspended sentence for forging a document and his wife, a former school board member who was on probation for embezzlement when the forgery occurred, also had been found guilty. She had been convicted in 2004 of embezzling money from a nonprofit organization dedicated to developing and owning low-income housing in Cumberland County, had paid $30,000 in restitution to that group shortly before the forgery occurred.
10. Former head of Florida's sheriffs association was arrested for giving employees bonuses from federal homeland security grants and other sources — and requiring a kickback in return. He put a mistress on the county payroll for a highly paid, no-show job. He received at least $114,000 in kickbacks over the last few years. He pleaded guilty last month. (AP)
11. Former state legislator and city councilwoman Renee Gill Pratt entered a not guilty plea to racketeering charges. She stepped down from her administrative job with Southern University in New Orleans just before she was indicted in an alleged scheme to take hundreds of thousands of dollars in grant money intended for charity and education. (The Louisiana Weekly)
Charity Check Up
On paper it all seemed plausible. Robert D. Felner was well regarded. He had secured a $694,000 earmarked grant from the U.S. Department of Education to create an elaborate research center to help Kentucky's public schools. Three years later the money was almost depleted and the tasks in the proposal unaccomplished. With only $96,000 remaining in the account, he implored officials to approve a $200,000 subcontract with a nonprofit organization in Illinois that had already received $450,000 from the grant. The Illinois group, Mr. Felner said, had been surveying students and teachers in Kentucky.
In actuality, according to a story in the Chronicle of Higher Education, the National Center on Public Education and Prevention, was simply a shell that funneled money into the personal bank accounts of Mr. Felner and an associate. In addition, Felner and his associate allegedly tricked three school districts into sending their payments to their fraudulent Illinois organization, whose name was very similar to a reputable Rhode Island center. (In Rhode Island: the National Center on Public Education and Social Policy. In Illinois: the National Center on Public Education and Prevention.) The Illinois money then flowed into the two men's bank accounts, prosecutors say. Mr. Felner owns four houses whose combined value is more than $2-million.
Prosecutors say the two men siphoned away not only the $694,000 earmarked grant, but also $1.7-million in payments from urban school districts. Mr. Felner and his associate now await trial on charges of mail fraud, money laundering, and tax evasion.
Our take: Mr. Felner charged almost $37,000 of his salary against the grant; there is no evidence that he worked on the grant and no one looked.
Federal regulations require that universities use "suitable means of verification that the work was performed"; it took two years (and just months after a whistleblower tipped off the federal government) for the college of education's associate dean for research to declare that he knew of no reports, articles, or other products that resulted from the grant.
The university had a “blind eye” toward Felner’s management practices; many were impressed with U.S. News & World Report ranking that was attributed to Felner’s arrival, so they coddled him. The university paid little attention to the dozens of faculty and student grievances against Mr. Felner — and especially to a 2006 faculty vote of no confidence in his leadership
The university has learned lessons from that episode. Late last year the faculty senate was invited to overhaul the grievance system. The university's auditor reported to the Board of Trustees about a long list of university-wide accounting and research-compliance reforms that would be put into place.
On the other hand, many are still asking about how complaints about Mr. Felner had been handled by the university's president and others. Sounds a lot like this other agency.
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Let the Crisis in Nonprofits Drive Change (ncrp.org)
• Are Charities Ignoring a Spike in Nonprofit Fraud? (Chronicle of Philanthropy)
• A Large Uptick In Charitable Fraud Is Met With A Yawn (ncrp.org)
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, 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, 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, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com :6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700; Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
June 2009
Join us on twitter: NonprofitsNews and ncrp blog (Ponzi effect on charities)
What’s Included:
Skunk of the Month
Illinois Funeral Directors Association
Nonprofit News-In Case You Missed It
Charitable Giving Down; Ronald Reagan Presidential Foundation; Shriners Hospital Cuts
Political/Official Chicanery
Association Exec Pleads Guilty; Detroit and Grand Rapids area Schools Sheriff/Police Officer
Comings and Goings
What Do You Think?
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Are Funeral Homes Meeting Their Maker?
Siren: For the past several months there has been a major problem brewing in Illinois. It has nothing to do with the Governor or his predecessor. It has nothing to do with a politicos’ indictment.
It has to do with one of the largest scams in recent nonprofit history.
It has gained the attention of every major public Illinois official one way or another. According to the secretary of state it was illegal. The Illinois Comptroller wants payback. The Illinois House wants an investigation. The state attorney general wants the perpetrators in court.
The backdrop: A Merrill Lynch employee sold life insurance policies to finance a pre-need funeral trust. He received a commission and provided investment advice on the proceeds that went to the Illinois Funeral Directors Association. An IFDA subsidiary took a piece of the premium for overseeing the trust and its cut exceeded the legally allowed amount. The trust had deficits of $10.4 million in 2001, $39 million in 2006 and as much as $100 million at the present time. The state comptroller wants $10 million to pay for current funerals. Merrill Lynch has offered $18 million to release them from liability and that is not acceptable to many funeral directors. The funeral homes say they are losing an estimated $500,000 each. The undertakers are crying foul and pointing to the failure of the regulators to do their job. There is much at stake including dignified burials for the 40,000 Illinois residents that bought the plans. (The State Journal-Register)
It seems that at least two other states have similar problems and solvency is a risk there as well.
Nonprofit News-
In Case You Missed It:
1. Charitable giving in the United States fell by 5.7 percent last year after adjustment for inflation, the largest year-over-year drop and the steepest decline in the history of the survey. The Giving USA Foundation began tracking American philanthropy 53 years ago. Individuals donated $229.3-billion last year, a decrease of 6.3 percent, accounting for 82 percent of all charitable giving in 2008. Corporate giving fell 8-percent, accounting for 5 percent of all giving. Foundation grants decreased only slightly, 0.8 percent representing 13 percent of the total contributed to charity last year. (WP/Chronicle of Philanthropy)
2. Despite a ban on gifts to lawmakers and limits on campaign contributions, lobbyists and groups that employ them can spend unlimited money to honor members of Congress or donate to nonprofits connected to them or their relatives. Most of the money — about $28 million — went to nonprofit groups, some with direct ties to members of Congress. (USA Today)
3. Investigations have focused on employees' activities involving child pornography possession, identity theft and embezzlement at the Library of Congress. The Library of Congress is charged by Senator Charles Grassley that it is attempting “to influence and/or control" the Office of Inspector General’s investigation. (WP)
4. A longtime Reagan foundation donor is seeking a court-ordered accounting of his contributions, unspecified compensatory damages, and $100,000 in legal fees over misuse of about $200,000 of his donations to the Ronald Reagan Presidential Foundation. (Ventura County Star)
5. The National D-Day Memorial Foundation, which runs the $25 million National D-Day Memorial, “is on the brink of financial ruin,” the AP stated. The foundation’s president insists the memorial’s only chance of survival is to be taken over by the National Park Service or by a college or university. (WSJ)
6. A former payroll manager for the Brooklyn Museum has been charged with stealing more than $620,000 from the nonprofit institution. (wcax.com)
7. A former pastor who once headed a Christian retreat in Hagerstown (MD) pleaded guilty for filing a false application to secure nonprofit status, bank fraud related to $1.75 million and tax evasion. (The Daily Record)
8. A federal judge sentenced a former Austin-based American Cancer Society employee to three years and four months in prison for embezzling over $200,000 from the non-profit organization.
9. Follow up: Fired amid an uproar over her $1.2 million pay package, the former executive sued the Central Carolinas United Way and six current or former officers in April. She accused them of race, age and gender discrimination, among other things, and asked the courts to give her more than $300,000 remaining on her contract, as well as the lucrative pension that prompted the public outcry. The matter was covered in great detail in NI. (charlotteobserver.com)
10. The Shriners hospital system is considering a plan to close six of its 22 hospitals around the country that care for children regardless of parents’ ability to pay. The nonprofit hospital system’s endowment lost more than $3-billion in the past year, which prompted consideration of the closure plan. The organization needs to cut spending by 30 percent. (CNNhealth.com)
11. The bookkeeper that stole $1 million from the Ann Arbor (MI) Amateur Hockey Association pleaded guilty to felony embezzlement. (Ann Arbor News)
12. No reference check: Even though she had two felony convictions in 2000 for food stamp fraud and obtaining aid for dependents, the City of Chattanooga hired Keele Maynor. Now the state is charging her with theft and fraud in addition to the federal charges of wire fraud. She pleaded guilty to federal charges after taking $80,000 by faking that she had cancer. (wrcbtv.com)
13. The second largest foundation in America, Ford Foundation, plans to trim its costs by offering buyouts to one-third of its 550 employees following an almost 30-percent drop in assets last year. (Chronicle of Philanthropy)
14. Two administrators with a New York nonprofit, SBCC Management Corp., that manages low-income housing spent $200,000 using the nonprofit's platinum card for meals, clothes and flight tickets to Puerto Rico for New York State Assembly members, according to a federal indictment filed. (Court House News Service/NYT)
15. The former accounting officer at the Firelake Grand Casino in Shawnee (OK) has been sentenced to nearly three years in prison for embezzling $406,000 from the Citizen Potawatomi Nation. (AP)
16. Remember NI covering the $590 million 2006 convictions and sentences of former Baptist Foundation of Arizona executives? The Arizona Court of Appeals upheld the executives’ conviction. Both were charged with of fraudulent investments and real estate transactions and operating the foundation as a Ponzi scheme.
We flagged these few examples of nonprofit mischief
1. Fowlerville (MI) Agricultural Society <$20,000 (livingstoncommunitynews.com)
2. Central Little League $11,996 (VA) (dailyprogress.com)
3. Great Lakes Energy electric cooperative (MI) $2 million (Gaylord Herald Times)
4. Genesee (MI) High School $4500 (Flint Journal)
5. Grove City Food Pantry and Emergency Services (OH) $50,000 (Columbus Dispatch)
6. Oh Day Aki/Heart of the Earth Charter School (MN) $1.38 million (StarTribune.com)
7. Conyers Public Housing Authority (GA) $130,000 (Portfolio.com)
8. Warrenwood Elementary Parent-Teacher Association (AR) $10000 (FayObserver.com)
9. West Virginia University's Student Dental Hygienist Association $4000 (Pittsburgh-Post Gazette)
10. Conn. Commission on Culture and Tourism $133,000 (wwlp.com)
11. Openhouse (CA) $20000 (The San Francisco Examiner)
12. Ranch Hope (NJ) $350,00 (nj.com)
13. Lexington Area Chamber of Commerce/Community Service Center Inc., (NB) $42,000 (kearneyhub.com)
14. Our Lady of the Sea (MI) <$90,000 (clickondetroit.com)
15. Children's Center at Highland United Methodist Church (NC) $150,000 (wral.com)
16. Brownsville General Hospital (PA) <$400,000 (Valley Independent)
17. Montana Synod of the Evangelical Lutheran Church $17,000 (kpvi.com)
18. Epping Cub Scout Pack 136 (NH) $5000 (seacoastonline.com)
19. Sacred Heart Catholic Church (KS) $74,000 (kfor.com)
20. Hawkins Elementary PTO (MI) >$20,000 (LivingstonDaily.com)
21. West Stanly Colt Club Boosters (NC) unknown (WCNC.com)
*update
Political/public official chicanery (just a few):
1. A former accountant has pleaded guilty to stealing more than $450,000 from the American Society for International Law from 2004 to 2008 and $150,000 from the American Bakers Association between 1998 and 2004.
2. CBS News has learned the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. Commonwealth gets the same benefits as any other charity: it doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor. If Commonwealth were not a charity, it could owe roughly one-third of its profits in taxes. That could add up to millions, on more than $45 million dollars in government contracts. (cbsnews.com)
3. VA authorities have charged four people in one of the largest embezzlement cases in Prince William County and are accused of creating a company in 2004 designed to bid for contracts from the county's information technology office, where they worked. Authorities say $9 million was sent to that company. (AP)
4. As a result of sloppy bookkeeping at 189 of 194 of the Detroit school buildings, the tax-exempt schools may have lost about $1.7 million that was wrongly paid in sales taxes, some of which could result in criminal charges. In addition, the audits showed loans made to school officials using school funds, missing funds from activities, school funds diverted to personal accounts, principals writing and signing checks, untimely deposits and money taken home by staff.
5. A Grand Rapids, (MI) grand jury returned a two-count indictment charging a former school superintendent of the Montcalm Area Intermediate School District (MAISD) with engaging in a conspiracy to accept a bribe--- $60,000 in free goods and services--- from a vendor. (U.S. Department of Justice)
6. A Paso Robles (CA) Police officer and board president of the California Organization of Police and Sheriffs (COPS) and the Civic Development Group (CDG), and the telemarketing firm COPS contracts with, is charged that they engage in “unlawful, unfair, and fraudulent business practices,” by the CA. attorney general. CDG received 85 percent of each donation and COPS retained less than 15 percent. In 2006, no COPS funds were used to help children. Of the $11.4 million in donations received in 2007, only $500 went to help children. (Cal Coast News)
7. The executive director for the Conyers (GA) Public Housing Authority pleaded guilty of embezzling more than $130,000 of housing authority funds.
8. Rep. Joe L. Barton's foundation is giving less than a quarter of the foundation's money to charitable causes, tax records show. The foundation spent more on staff, fundraising and other overhead from 2005 to 2007 - nearly $130,000 in all - than it did on its single $90,000 contribution to a charitable cause. The congressman's daughter-in-law runs the foundation as an unpaid executive director. The top Republican on the House Energy and Commerce Committee has raised donations from the industries his committee oversees. (Washington Times)
9. A former Skowhegan (ME) police officer received a nine-month suspended sentence for forging a document and his wife, a former school board member who was on probation for embezzlement when the forgery occurred, also had been found guilty. She had been convicted in 2004 of embezzling money from a nonprofit organization dedicated to developing and owning low-income housing in Cumberland County, had paid $30,000 in restitution to that group shortly before the forgery occurred.
10. Former head of Florida's sheriffs association was arrested for giving employees bonuses from federal homeland security grants and other sources — and requiring a kickback in return. He put a mistress on the county payroll for a highly paid, no-show job. He received at least $114,000 in kickbacks over the last few years. He pleaded guilty last month. (AP)
11. Former state legislator and city councilwoman Renee Gill Pratt entered a not guilty plea to racketeering charges. She stepped down from her administrative job with Southern University in New Orleans just before she was indicted in an alleged scheme to take hundreds of thousands of dollars in grant money intended for charity and education. (The Louisiana Weekly)
Charity Check Up
On paper it all seemed plausible. Robert D. Felner was well regarded. He had secured a $694,000 earmarked grant from the U.S. Department of Education to create an elaborate research center to help Kentucky's public schools. Three years later the money was almost depleted and the tasks in the proposal unaccomplished. With only $96,000 remaining in the account, he implored officials to approve a $200,000 subcontract with a nonprofit organization in Illinois that had already received $450,000 from the grant. The Illinois group, Mr. Felner said, had been surveying students and teachers in Kentucky.
In actuality, according to a story in the Chronicle of Higher Education, the National Center on Public Education and Prevention, was simply a shell that funneled money into the personal bank accounts of Mr. Felner and an associate. In addition, Felner and his associate allegedly tricked three school districts into sending their payments to their fraudulent Illinois organization, whose name was very similar to a reputable Rhode Island center. (In Rhode Island: the National Center on Public Education and Social Policy. In Illinois: the National Center on Public Education and Prevention.) The Illinois money then flowed into the two men's bank accounts, prosecutors say. Mr. Felner owns four houses whose combined value is more than $2-million.
Prosecutors say the two men siphoned away not only the $694,000 earmarked grant, but also $1.7-million in payments from urban school districts. Mr. Felner and his associate now await trial on charges of mail fraud, money laundering, and tax evasion.
Our take: Mr. Felner charged almost $37,000 of his salary against the grant; there is no evidence that he worked on the grant and no one looked.
Federal regulations require that universities use "suitable means of verification that the work was performed"; it took two years (and just months after a whistleblower tipped off the federal government) for the college of education's associate dean for research to declare that he knew of no reports, articles, or other products that resulted from the grant.
The university had a “blind eye” toward Felner’s management practices; many were impressed with U.S. News & World Report ranking that was attributed to Felner’s arrival, so they coddled him. The university paid little attention to the dozens of faculty and student grievances against Mr. Felner — and especially to a 2006 faculty vote of no confidence in his leadership
The university has learned lessons from that episode. Late last year the faculty senate was invited to overhaul the grievance system. The university's auditor reported to the Board of Trustees about a long list of university-wide accounting and research-compliance reforms that would be put into place.
On the other hand, many are still asking about how complaints about Mr. Felner had been handled by the university's president and others. Sounds a lot like this other agency.
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Let the Crisis in Nonprofits Drive Change (ncrp.org)
• Are Charities Ignoring a Spike in Nonprofit Fraud? (Chronicle of Philanthropy)
• A Large Uptick In Charitable Fraud Is Met With A Yawn (ncrp.org)
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, 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, 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, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com :6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700; Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
Wednesday, May 20, 2009
Nonprofit Imperative
…. your nonprofit browser
May 2009
Join us on twitter: NonprofitsNews and ncrp blog
"Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big." (Bernard Madoff’s secretary’s account)
What’s Included:
Skunk of the Month
Genesis Family Center; Speaker of House in FL.; Maricopa Com. College
Nonprofit News-In Case You Missed It
Cheating the Blind; Obama Promoting National service; Obama Wants Restricted Nonprofit Lobbying
Political/Official Chicanery
Congressman cheated campaigns; Sheriff; N.Y. Federal Reserve Resigns
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Update: In our last edition we shared with you the vagaries of Genesis Family Center and how the past chief executive violated her probation after pleading no contest and she was convicted of felony embezzlement and tax evasion. The county supervisors rejected a contract with the nonprofit citing questions about its troubled past. The county was its major donor. (ksee24.com) Update-2: The former executive director of the Genesis child welfare agency pleaded no contest to drunken driving and was given a jail sentence that runs concurrent with her violation of probation. (The Fresno Bee). Update-3: Upon being confronted by police the Genesis exec. directed an expletive-laced tirade at officers, ordering them off her property, according to the report. She also called a female officer a derogatory name, (The Fresno Bee).
This one has it all
He was elected speaker of the Florida House and then his house of cards started to collapse. Both he and his friend, the president of Northwest Florida State College face felony misconduct charges for allegedly misusing $6-million in state funds for a campus construction project. The speaker inserted the $6-million into the state budget in 2007 for what college officials had described as an emergency-management operations center. A grand jury believed that the money was to sublease a hangar adjacent to a private jet operation owned by a friend of the speaker and contributor, who has given millions of dollars to his and others campaigns. The newly elected speaker accepted an unadvertised $110,000-per-year job at the college. That position arose after the speaker had steered $35-million in construction funds to the college, according to The Miami Herald. When this broke the speaker stepped down as speaker and resigned his post at the college. The president of Northwest Florida since 1987 was also indicted for perjury for allegedly lying to jurors during his testimony on about plans for the building. (Chronicle of Higher Education). Northwest Florida College president is the "poster boy'' for abuse and "retired'' in 2007, collected a payment of $553,228 and started collecting a monthly pension of $8,803 to go with an annual salary of $228,000. (Tampabay.com) There is a call to the US Dept. of Ed & US Dept. of Justice to yank the accreditation of the College
Is a Third Strike an Out?
In order to provide nonprofits with retirement plans to their staff, Maricopa Community College District broke the law by misrepresenting at least 22 employees of non-profit organizations as district employees for years. The district paid their salaries and benefits and then accepted reimbursement. The audit of the college district marks the third time since 2006 that the state auditor has found that public entities misused public money by allowing non-profit organizations to get public-employee benefits. A 2006 audit of Santa Cruz County found the county improperly made loans to a non-profit corporation to cover the non-profit's payroll costs and allowed the employees to participate in the state retirement system. In 2007, state auditors found the Maricopa County Regional School District paid salaries and provided benefits to employees of a non-profit company.
Nonprofit News-
In Case You Missed It:
1. A mother and daughter who managed a D.C. government program aimed at employing blind vendors were indicted on charges of embezzling $281,000, much of which was supposed to be paid to the vendors, who were working at snack bars, cafeterias and gift shops in federal buildings. (Washington Post)
2. The Chief Financial Officer for Traveler’s Aid of Metropolitan Atlanta, a charitable organization that provides housing, support and assistance to homeless men, women and children in the Atlanta metropolitan area abused her position. She embezzled more than $164,000.00 of the charity’s funds and used that money for her own needs. (FBI Press Release)
3. An accounting director is expected to plead guilty to embezzling more than almost $600,000 from his former employers---American Society of International Law and the American Bakers Association. He is accused of embezzling about $445,000 from the law society and $145,000 from the bakers association. (washingtonexaminer.com)
4. In 2007, it’s believed she took $200,000 from a business, but no charges were filed. Now she is accused of embezzling more than $400,000 from the Hinton Economic Development Authority (OK) (newsok)
5. Using leads largely through the membership of the Church of Jesus Christ of Latter-day Saints in Lake Arrowhead, Terrance Tucker and Sonya Tucker are currently in custody for what federal prosecutors called a “mill scheme,” a scam that squeezed about $31 million from financial institutions and up to $2 million from individuals. A “mill” is a real-estate financing scheme in which they brokered real-estate loans by banks or other lenders, using fraudulent documents. (Mountain News)
6. The fired technology director for LifeGift Organ Donation Center pleaded guilty in Houston federal court to illegally accessing her employer’s computer and deleting files including organ donation database records. After being terminated, Danielle Duann, 51, repeatedly gained access to the LifeGift network and intentionally caused damage that cost the nonprofit Texas organ procurement group more than $94,000, officials said. A charity spokeswoman said the files were retrieved and no lives were put in jeopardy. (chron.com)
7. While posing as various charities --- including The Boys and Girls Club, Planned Parenthood, Teen Pregnancy Help Center, the YMCA, various domestic abuse shelters---the police investigated and arrested Norita Appleby. She will be charged with misappropriation of an Entity's Identifying Information, a class H felony. (wmtv.com)
8. A grand jury has indicted the Tucson Museum of Art's accountant with embezzling nearly $1 million. (examiner.com)
9. President Obama's budget for next year will include $50 million to help expand nonprofit programs across the country to promote national service
10. The Council on Foundations surveyed 430 foundations in March and found that 62 percent expect to reduce their grant making this year. Almost half of the respondents said they will decrease their giving budgets by more than 10 percent. (Chronicle of Philanthropy)
11. It appears that the Obama administration’s restrictions on lobbying are drawing criticism even as the administration defends the policies. The controversy surrounds two policy documents: one addresses restrictions on hiring lobbyists and others as political appointees, and the other focuses on communications by lobbyists about use of Recovery Act funds. (OMB Watch)
12. The IRS reminds small calendar year tax-exempt organizations to file their electronic Form 990-N, known as the "e-Postcard," by the May 15 deadline. To get more information about the annual electronic filing requirement for organizations whose annual gross receipts are normally $25,000 or less, go to IRS.gov.
13. Former Haven Humane Society CEO Norman Ray Ryan was convicted of five felonies in the embezzlement from the nonprofit group. (Redding.com)
14. A new study of the Bill and Melinda Gates Foundation illustrates its global reach with spending on health issues, but notes a need for accountability on whether the money is being spent in the most effective way.
15. The president and director of YouthBuild Pensacola Inc., was arrested on state charges of aggravated white-collar crime and organized fraud and theft of $65,000 mostly intended for small businesses participating in the program. He is a former executive director of the Gulf Coast African American Chamber of Commerce and former principal of the now-defunct Gulf Coast High School, which was a charter school. (pnj.com)
16. The Internal Revenue Service has added a detailed site map to its “Charities and Nonprofits” Web site to help visitors find what they are looking for. (Chron. Of Philanthropy)
We flagged these few examples of nonprofit mischief
1. St. Mary Magdalen Catholic Church (FL) $1 million (Orlando Sentinel)
2. Crow Creek Tribal School $6000 (S.D.) (Capital Journal)
3. Baldock Health Care Center in North Huntingdon, and Humbert Lane Nursing and Rehabilitation in Washington (PA) (Post Gazette)
4. Wellsville-Middleton School District (MO) $214,000 (wgem)
5. City of Springfield (MO) $750,000 (wgem)
6. Danville Harvest Jubilee (NC) $85,000 (Danville News)
7. Macon (GA) Waves $30,000 (macon.com)
8. University of St. Thomas (MN) $178,400 (bulletintoday)
9. Union Township (MI) unknown (themorningsun)
10. Options in Supported Living (CA) $225,000 (Sacramento Business Journal)
11. Central Maine Growth Council $29,000 (boston.com)
12. Christ Episcopal Church (VA) $300,000 (dailypress.com)
13. Association of Fish and Wildlife Agencies $180,000 (Washington Post)
14. Long Beach Unified School District/Long Beach Education Foundation $100,000 (mercurynews.com)
15. Memorial Christian Church thousands (wsls.com)
16. Colours $140,000 (courier-post)
17. Knights of Columbus (FL) $18,000 (news2.com)
18. A New Beginning (KS) $3.76 million (kake.com)
19. National Children's Alliance (MD) $15,800 (fox13now)
20. Coalition to End Family Violence (CA) $50,000 (Ventura County Star)
21. Tufts University (MA) $300,000 (The Tufts Daily)
22. Salford Township (PA) $95,000
23. Sioux Empire Fair (SD) $579,000 (ktiv.com)
24. Delaware Valley Regional High School District (NJ) $90,000 (AP)
25. Routt County Habitat for Humanity (CO) $75,000 (9news.com)
26. The Yuma Southwest Contractors Association (AZ) $15,000 (yumasun.com)
27. International Association of Machinists and Aerospace Workers District 9 (MO) $341,000 (St. Louis Business Journal)
28. Jubilee Restoration Inc (CA) $177,000 (cbs5.com)
29. The American Task Force on Palestine (VA) $107,000 (Washington Post)
*update
Political/public official chicanery (just a few):
1. A former political aide to Sen. Lindsey Graham (R-S.C.) will pay a civil penalty after embezzling hundreds of thousands of dollars from Graham's Senate campaign. In November 2008, Adams was sentenced to 18 months in prison and five years probation. She was also convicted of spending money from Graham's personal account. The campaign aide obtained a credit card in Graham's name sometime between 2006 and 2007. She had been convicted of fraud before. (The Hill)
2. The campaign manager for former Christopher Shays is being investigated by the Federal Election Commission, for significant financial irregularities. It is alleged that he quietly drained the account and had spent nearly $200,000 on Red Sox tickets, limousine travel, mysterious withdrawals at a casino and a donation of more than $1,000 to his synagogue. Mr. Shays said, “To lose an election is difficult; what happened since then is unimaginable.”
3. A former Okaloosa County (FL) Sheriff and former Okaloosa County Sheriff’s Office Director were indicted creating fictitious bonuses to sheriff’s department employees. The indictment alleges that Sheriff’s Office employees were directed to return all or a portion of the bonuses in the form of cash and cashier’s checks under the pretense that these returned funds were to be used for charitable purposes. (U.S. Attorney Press Release)
4. New York City’s longtime finance commissioner, Martha E. Stark, resigned amid a series of official inquiries. Ms. Stark faced new disclosures that she had been paid more than $134,000 in 2006 and 2007 for service as a board member of the Tarragon Corporation, a large housing builder and property owner not doing business in the city, a level of outside activity generally frowned upon by city regulations. Previously, it was reported that Ms. Stark was romantically involved with a former subordinate whose salary had risen sharply during the last three years she worked for the agency. She had decided to retain the husband of her first deputy commissioner as a parking ticket judge even though city investigators had found discrepancies in the time sheets submitted by the husband.
5. Two longtime supervisors at the Canyon County (WY) Division of Motor Vehicles are facing felony charges of grand theft of “a large” amount of money. (Localnews8.com)
6. They do not show up on staff rosters and touted belt-tightening, the California House and Senate leadership hired friends and close confidants to positions that totaled nearly a half a million dollars. (Sacramento Bee)
7. The chairman of the Federal Reserve Bank of New York resigned after questions were raised about his role as a director of Goldman Sachs and his purchases of stock in the company. This was after Goldman came under direct supervision of the New York Fed. He is representative of the too-cozy relationship between the New York Fed, which serves as the central bank's eyes and ears on Wall Street, and the bankers it oversees, critics say. (Washington Post)
8. Prosecutors are alleging that a 74-year-old spent $60,000 in public funds for personal use before retiring as Vernon (CA) city administrator five years ago. He reported a salary of more than $600,000 that had made him one of the state's highest paid city officials. (signonsandiego.com)
9. Former New York state senator has pleaded guilty to fraud charges, admitting that he used charity groups to steal hundreds of thousands of dollars. Efrain Gonzalez admitted that he siphoned the money away from charity groups that received state grants from $200 million the New York Legislature. (NYT) His gal friend admitted her role in Gonzalez's theft of $200,000 in public money, but as part of a plea deal with the feds, she faces a likely sentence of between four and 10 months in prison. (daily news)
10. Former Fresno (CA) County Deputy Coroner Joseph Tiger was sentenced to 18 months in jail and 5 years of probation, after pleading guilty to embezzlement charges. Tiger was accused of stealing from the dead. (ksee.com)
11. A former Water Operations Supervisor for the City of Sonoma, Calif., pleaded guilty to personally receiving financial payments from a parts vendor with whom he had arranged contracts for the City.
12. A Macomb County (MI) postal worker is charged with stealing more than $19,000 in stamps and selling them for discount online to help pay his mortgage was arraigned. (freep.com)
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, 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, 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, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
May 2009
Join us on twitter: NonprofitsNews and ncrp blog
"Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big." (Bernard Madoff’s secretary’s account)
What’s Included:
Skunk of the Month
Genesis Family Center; Speaker of House in FL.; Maricopa Com. College
Nonprofit News-In Case You Missed It
Cheating the Blind; Obama Promoting National service; Obama Wants Restricted Nonprofit Lobbying
Political/Official Chicanery
Congressman cheated campaigns; Sheriff; N.Y. Federal Reserve Resigns
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
Update: In our last edition we shared with you the vagaries of Genesis Family Center and how the past chief executive violated her probation after pleading no contest and she was convicted of felony embezzlement and tax evasion. The county supervisors rejected a contract with the nonprofit citing questions about its troubled past. The county was its major donor. (ksee24.com) Update-2: The former executive director of the Genesis child welfare agency pleaded no contest to drunken driving and was given a jail sentence that runs concurrent with her violation of probation. (The Fresno Bee). Update-3: Upon being confronted by police the Genesis exec. directed an expletive-laced tirade at officers, ordering them off her property, according to the report. She also called a female officer a derogatory name, (The Fresno Bee).
This one has it all
He was elected speaker of the Florida House and then his house of cards started to collapse. Both he and his friend, the president of Northwest Florida State College face felony misconduct charges for allegedly misusing $6-million in state funds for a campus construction project. The speaker inserted the $6-million into the state budget in 2007 for what college officials had described as an emergency-management operations center. A grand jury believed that the money was to sublease a hangar adjacent to a private jet operation owned by a friend of the speaker and contributor, who has given millions of dollars to his and others campaigns. The newly elected speaker accepted an unadvertised $110,000-per-year job at the college. That position arose after the speaker had steered $35-million in construction funds to the college, according to The Miami Herald. When this broke the speaker stepped down as speaker and resigned his post at the college. The president of Northwest Florida since 1987 was also indicted for perjury for allegedly lying to jurors during his testimony on about plans for the building. (Chronicle of Higher Education). Northwest Florida College president is the "poster boy'' for abuse and "retired'' in 2007, collected a payment of $553,228 and started collecting a monthly pension of $8,803 to go with an annual salary of $228,000. (Tampabay.com) There is a call to the US Dept. of Ed & US Dept. of Justice to yank the accreditation of the College
Is a Third Strike an Out?
In order to provide nonprofits with retirement plans to their staff, Maricopa Community College District broke the law by misrepresenting at least 22 employees of non-profit organizations as district employees for years. The district paid their salaries and benefits and then accepted reimbursement. The audit of the college district marks the third time since 2006 that the state auditor has found that public entities misused public money by allowing non-profit organizations to get public-employee benefits. A 2006 audit of Santa Cruz County found the county improperly made loans to a non-profit corporation to cover the non-profit's payroll costs and allowed the employees to participate in the state retirement system. In 2007, state auditors found the Maricopa County Regional School District paid salaries and provided benefits to employees of a non-profit company.
Nonprofit News-
In Case You Missed It:
1. A mother and daughter who managed a D.C. government program aimed at employing blind vendors were indicted on charges of embezzling $281,000, much of which was supposed to be paid to the vendors, who were working at snack bars, cafeterias and gift shops in federal buildings. (Washington Post)
2. The Chief Financial Officer for Traveler’s Aid of Metropolitan Atlanta, a charitable organization that provides housing, support and assistance to homeless men, women and children in the Atlanta metropolitan area abused her position. She embezzled more than $164,000.00 of the charity’s funds and used that money for her own needs. (FBI Press Release)
3. An accounting director is expected to plead guilty to embezzling more than almost $600,000 from his former employers---American Society of International Law and the American Bakers Association. He is accused of embezzling about $445,000 from the law society and $145,000 from the bakers association. (washingtonexaminer.com)
4. In 2007, it’s believed she took $200,000 from a business, but no charges were filed. Now she is accused of embezzling more than $400,000 from the Hinton Economic Development Authority (OK) (newsok)
5. Using leads largely through the membership of the Church of Jesus Christ of Latter-day Saints in Lake Arrowhead, Terrance Tucker and Sonya Tucker are currently in custody for what federal prosecutors called a “mill scheme,” a scam that squeezed about $31 million from financial institutions and up to $2 million from individuals. A “mill” is a real-estate financing scheme in which they brokered real-estate loans by banks or other lenders, using fraudulent documents. (Mountain News)
6. The fired technology director for LifeGift Organ Donation Center pleaded guilty in Houston federal court to illegally accessing her employer’s computer and deleting files including organ donation database records. After being terminated, Danielle Duann, 51, repeatedly gained access to the LifeGift network and intentionally caused damage that cost the nonprofit Texas organ procurement group more than $94,000, officials said. A charity spokeswoman said the files were retrieved and no lives were put in jeopardy. (chron.com)
7. While posing as various charities --- including The Boys and Girls Club, Planned Parenthood, Teen Pregnancy Help Center, the YMCA, various domestic abuse shelters---the police investigated and arrested Norita Appleby. She will be charged with misappropriation of an Entity's Identifying Information, a class H felony. (wmtv.com)
8. A grand jury has indicted the Tucson Museum of Art's accountant with embezzling nearly $1 million. (examiner.com)
9. President Obama's budget for next year will include $50 million to help expand nonprofit programs across the country to promote national service
10. The Council on Foundations surveyed 430 foundations in March and found that 62 percent expect to reduce their grant making this year. Almost half of the respondents said they will decrease their giving budgets by more than 10 percent. (Chronicle of Philanthropy)
11. It appears that the Obama administration’s restrictions on lobbying are drawing criticism even as the administration defends the policies. The controversy surrounds two policy documents: one addresses restrictions on hiring lobbyists and others as political appointees, and the other focuses on communications by lobbyists about use of Recovery Act funds. (OMB Watch)
12. The IRS reminds small calendar year tax-exempt organizations to file their electronic Form 990-N, known as the "e-Postcard," by the May 15 deadline. To get more information about the annual electronic filing requirement for organizations whose annual gross receipts are normally $25,000 or less, go to IRS.gov.
13. Former Haven Humane Society CEO Norman Ray Ryan was convicted of five felonies in the embezzlement from the nonprofit group. (Redding.com)
14. A new study of the Bill and Melinda Gates Foundation illustrates its global reach with spending on health issues, but notes a need for accountability on whether the money is being spent in the most effective way.
15. The president and director of YouthBuild Pensacola Inc., was arrested on state charges of aggravated white-collar crime and organized fraud and theft of $65,000 mostly intended for small businesses participating in the program. He is a former executive director of the Gulf Coast African American Chamber of Commerce and former principal of the now-defunct Gulf Coast High School, which was a charter school. (pnj.com)
16. The Internal Revenue Service has added a detailed site map to its “Charities and Nonprofits” Web site to help visitors find what they are looking for. (Chron. Of Philanthropy)
We flagged these few examples of nonprofit mischief
1. St. Mary Magdalen Catholic Church (FL) $1 million (Orlando Sentinel)
2. Crow Creek Tribal School $6000 (S.D.) (Capital Journal)
3. Baldock Health Care Center in North Huntingdon, and Humbert Lane Nursing and Rehabilitation in Washington (PA) (Post Gazette)
4. Wellsville-Middleton School District (MO) $214,000 (wgem)
5. City of Springfield (MO) $750,000 (wgem)
6. Danville Harvest Jubilee (NC) $85,000 (Danville News)
7. Macon (GA) Waves $30,000 (macon.com)
8. University of St. Thomas (MN) $178,400 (bulletintoday)
9. Union Township (MI) unknown (themorningsun)
10. Options in Supported Living (CA) $225,000 (Sacramento Business Journal)
11. Central Maine Growth Council $29,000 (boston.com)
12. Christ Episcopal Church (VA) $300,000 (dailypress.com)
13. Association of Fish and Wildlife Agencies $180,000 (Washington Post)
14. Long Beach Unified School District/Long Beach Education Foundation $100,000 (mercurynews.com)
15. Memorial Christian Church thousands (wsls.com)
16. Colours $140,000 (courier-post)
17. Knights of Columbus (FL) $18,000 (news2.com)
18. A New Beginning (KS) $3.76 million (kake.com)
19. National Children's Alliance (MD) $15,800 (fox13now)
20. Coalition to End Family Violence (CA) $50,000 (Ventura County Star)
21. Tufts University (MA) $300,000 (The Tufts Daily)
22. Salford Township (PA) $95,000
23. Sioux Empire Fair (SD) $579,000 (ktiv.com)
24. Delaware Valley Regional High School District (NJ) $90,000 (AP)
25. Routt County Habitat for Humanity (CO) $75,000 (9news.com)
26. The Yuma Southwest Contractors Association (AZ) $15,000 (yumasun.com)
27. International Association of Machinists and Aerospace Workers District 9 (MO) $341,000 (St. Louis Business Journal)
28. Jubilee Restoration Inc (CA) $177,000 (cbs5.com)
29. The American Task Force on Palestine (VA) $107,000 (Washington Post)
*update
Political/public official chicanery (just a few):
1. A former political aide to Sen. Lindsey Graham (R-S.C.) will pay a civil penalty after embezzling hundreds of thousands of dollars from Graham's Senate campaign. In November 2008, Adams was sentenced to 18 months in prison and five years probation. She was also convicted of spending money from Graham's personal account. The campaign aide obtained a credit card in Graham's name sometime between 2006 and 2007. She had been convicted of fraud before. (The Hill)
2. The campaign manager for former Christopher Shays is being investigated by the Federal Election Commission, for significant financial irregularities. It is alleged that he quietly drained the account and had spent nearly $200,000 on Red Sox tickets, limousine travel, mysterious withdrawals at a casino and a donation of more than $1,000 to his synagogue. Mr. Shays said, “To lose an election is difficult; what happened since then is unimaginable.”
3. A former Okaloosa County (FL) Sheriff and former Okaloosa County Sheriff’s Office Director were indicted creating fictitious bonuses to sheriff’s department employees. The indictment alleges that Sheriff’s Office employees were directed to return all or a portion of the bonuses in the form of cash and cashier’s checks under the pretense that these returned funds were to be used for charitable purposes. (U.S. Attorney Press Release)
4. New York City’s longtime finance commissioner, Martha E. Stark, resigned amid a series of official inquiries. Ms. Stark faced new disclosures that she had been paid more than $134,000 in 2006 and 2007 for service as a board member of the Tarragon Corporation, a large housing builder and property owner not doing business in the city, a level of outside activity generally frowned upon by city regulations. Previously, it was reported that Ms. Stark was romantically involved with a former subordinate whose salary had risen sharply during the last three years she worked for the agency. She had decided to retain the husband of her first deputy commissioner as a parking ticket judge even though city investigators had found discrepancies in the time sheets submitted by the husband.
5. Two longtime supervisors at the Canyon County (WY) Division of Motor Vehicles are facing felony charges of grand theft of “a large” amount of money. (Localnews8.com)
6. They do not show up on staff rosters and touted belt-tightening, the California House and Senate leadership hired friends and close confidants to positions that totaled nearly a half a million dollars. (Sacramento Bee)
7. The chairman of the Federal Reserve Bank of New York resigned after questions were raised about his role as a director of Goldman Sachs and his purchases of stock in the company. This was after Goldman came under direct supervision of the New York Fed. He is representative of the too-cozy relationship between the New York Fed, which serves as the central bank's eyes and ears on Wall Street, and the bankers it oversees, critics say. (Washington Post)
8. Prosecutors are alleging that a 74-year-old spent $60,000 in public funds for personal use before retiring as Vernon (CA) city administrator five years ago. He reported a salary of more than $600,000 that had made him one of the state's highest paid city officials. (signonsandiego.com)
9. Former New York state senator has pleaded guilty to fraud charges, admitting that he used charity groups to steal hundreds of thousands of dollars. Efrain Gonzalez admitted that he siphoned the money away from charity groups that received state grants from $200 million the New York Legislature. (NYT) His gal friend admitted her role in Gonzalez's theft of $200,000 in public money, but as part of a plea deal with the feds, she faces a likely sentence of between four and 10 months in prison. (daily news)
10. Former Fresno (CA) County Deputy Coroner Joseph Tiger was sentenced to 18 months in jail and 5 years of probation, after pleading guilty to embezzlement charges. Tiger was accused of stealing from the dead. (ksee.com)
11. A former Water Operations Supervisor for the City of Sonoma, Calif., pleaded guilty to personally receiving financial payments from a parts vendor with whom he had arranged contracts for the City.
12. A Macomb County (MI) postal worker is charged with stealing more than $19,000 in stamps and selling them for discount online to help pay his mortgage was arraigned. (freep.com)
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Funding Incompetence (ncrp.org)
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, 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, 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, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
Thursday, May 7, 2009
Nonprofit Imperative
Join us on twitter: NonprofitsNews
What’s Included:
Skunk of the Month
Getting off was not enough
Nonprofit News-In Case You Missed It
Nonprofit Lobbying Obama Appointment Push; Serve America Bill Law; Foundations Hit Badly By Economy
Political/Official Chicanery
Congressman; Police Chief; Library Board President; IRS employee
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
What’s Wrong with this Picture?
The executive director of Genesis Family Center, a Fresno (CA) child-welfare agency, was charged with embezzling more than $500,000. She was sentenced to three years on probation and 300 days in a work-furlough program with electronic monitoring after she pleaded no contest to felony tax evasion and embezzlement. Even in the face of the conviction she stayed on as the agency’s chief executive officer. She ignored the judge’s order that forbade her from attending social events while on probation and in a work furlough program. Her picture was splashed in a magazine at social events and she was seen at luncheons. The judge had her arrested and he sentenced her to a year in jail. She finally resigned her position with the nonprofit. (fresnobee.com)
Nonprofit News-
In Case You Missed It:
1. As he sat on the board of directors and vice president of finance, he embezzled nearly $700,000 from the Columbian Retirement Home, a (CA) nonprofit retirement facility operated by the Knights of Columbus. (Mercury-Register)
2. A coalition of nonprofit groups has started a campaign to exempt lobbyists for charitable and social welfare organizations that have tax-free status from being considered for appointment in the Obama administration. (NYT)
3. President Obama signed landmark legislation that boosts national service, volunteerism, and innovative social projects. The Edward M. Kennedy Serve America Act is to expand the country’s national-service programs and provide money for entrepreneurial approaches to social problems. While the Serve America Act outlines federal programs that can now expand or start operating, Congress still has to allocate money to pay for them.
4. The Fidelity Charitable Gift Fund, Vanguard Charitable Endowment Program and the Schwab Charitable Fund are some of the growing donor funds. In part the growth is because private foundations are frustrated by increasing fees, tax requirements and general upkeep. Donor funds allow donors to take an immediate tax deduction after making contributions; donors can advise the fund on where the grants should go; the funds don't have to make distributions as often as a foundation would; donors can give many types of assets -- including cash, securities and even art -- depending on the fund's specific rules. (WSJ)
5. Maria Eitel, president of the Nike Foundation, is to be chief executive of the Corporation for National and Community Service, President Obama announced. The corporation manages the country’s national-service programs, which are set to grow significantly under the Serve America Act. (Chronicle of Philanthropy)
6. The former executive director of Children’s Alliance (CO) was arrested and accused of stealing $20,000 from the organization (DenverChannel.com)
7. The nation’s foundations lost nearly $150 billion in assets last year, or almost as much as they have given away over the last four years, a new Foundation Center study has found. Foundation giving for the year nonetheless held steady at an estimated $45.6 billion, falling by just 1 percent on an inflation-adjusted basis. Nearly two-thirds of foundations expect to reduce the number or the size of grants they award in 2009. (NYT)
8. The former pastor of a prominent North Shore Episcopal church stands accused of stealing $84,537 over the three years from his parish to pay for plastic surgery and Botox injections, as well as prescription drugs. (topix.com/religion)
9. The former accountant and office manager for Cornerstone Christian Fellowship has been sentenced to five years in prison for embezzling $495,000 from the Chandler (AZ) church. (Azcentral.com)
10. A former employee of the Lucile Packard Foundation for Children's Health pleaded no contest to embezzling more than $350,000 over an eight-year period from an endowment fund intended to help sick youths. (San Francisco Chronicle)
11. The deputy director of two NYC Head Start programs has pleaded guilty to stealing $600,000 from the program (usdoj.gov)
12. A director and initial incorporator for United Way of the Mountains, its successor, Kentucky Charities United, and Feed God’s Children, Inc. have been convicted of using money raised to pay for residential utilities, vehicle loan, vehicle insurance and other living expenses. (The Morehead News)
13. A Baltimore pastor who worked with developmentally disabled people as an operations manager for the Arc of Baltimore was charged with befriending a blind and disabled man in his care, then paying a hit man $50,000 in church funds for an execution so he could collect on a $200,000 life insurance policy. The pastor had policies in his name as beneficiary worth nearly $1 million combined. (Baltimore Sun)
We flagged these few examples of nonprofit mischief
1. St. Paul’s Memorial Episcopal Church (NY) $85,000
2. San Diego Hispanic Chamber of Commerce (CA) $70,000 (S.D.Union-Tribune)
3. Turning Pointe Therapeutic Riding $209,000 (Westerlysun.com)
4. The Starting Place (FL) $2 million (Sun-Sentinel.com)
5. California State Bar $675,000 (Law.com)
6. First Witness Child Abuse Resource Center (MN) $125,000 (wcco.com)
7. Fremont (MI) Area Community Foundation $20,000 (Muskegon Chronicle)
8. United Steelworkers of America (PA) $88,000 (Pitt. Post-Gazette)
9. Ranch Hope (NJ) $350,000 (nj.com)
10. First Witness Child Abuse Resource Center (MN) $125,000 (Duluth News Tribune)
11. Salem United Methodist Church $113,000 (FDLREPORTER.COM)
12. First Congregational Church (MI) $50,000 (Gaylord Herald-Times)
13. First Baptist Church on Highland Avenue (NC) $300,000 (journalnow.com)
14. Community Senior Serv (CA) $1 million (Huntington Beach Independent)
15. Southern Arizona Legal Aid $18,000 (azstarnet.com)
*update
Political/public official chicanery (just a few):
1. Former (NC) congressman Frank Ballance who was convicted of fraudulently conspiring to exercise his influence over state appropriations for the personal benefit of his family is able to serve his remaining sentence at home. Federal prosecutors said that Ballance channeled $2.3 million dollars to a private foundation and the money was then diverted to the benefit of members of his family, including his son and mother. (Beaufort-observer)
2. A (CA) police chief, a mayor and a city councilman in his 40 years of public service has pleaded guilty to felony embezzlement for using his city-issued credit card to buy thousands of dollars in casino tokens and alcohol. His wife is in deeper trouble facing 23 felony counts, including grand theft and embezzlement, for allegedly getting more than $800,000 in loans under false pretenses from friends, neighbors and colleagues, including the mayor and city manager of Canyon Lake, and then paying them back with bad checks. In one instance she allegedly wrote a bad check to her husband. (L.A. Times)
3. The Roosevelt (NY) Public Library's former board president has been arrested on charges she stole $47,000 from the library to pay for airplane tickets, car repairs and groceries. In 2002, it was reported that the library's then-business manager allegedly misappropriated $15,000 of library funds. (OrlandoSentinel.com)
4. The former Standish (MI) city treasurer has pleaded no contest to neglect of duty in an embezzlement case. He made illegal transfers involving city tax accounts at the direction of the former City Manager, who faces charges of embezzlement and neglect of duty. (Chicago Tribune)
5. A contract worker for the U.S. Internal Revenue Service has been found guilty of embezzling nearly $500,000 in remittance checks (UPI.com)
6. A federal judge sentenced a former Buchanan County (MO) official who pleaded guilty to stealing money meant for 120 people, altering accounting records in her office to hide the embezzlements and submitting false reports to the Social Security Administration. She acknowledged taking the money between September 2003 and August 2006. (KansasCity.com)
7. The former executive director of the Bullskin Township/Connellsville Township Joint Sewerage Authority is in the Fayette County Prison after being charged by state police with siphoning more than $100,000 from the authority. (wpxi.com)
8. Former municipal court clerk and utility department clerk for the Town of Taylorsville, has been indicted on one count of embezzlement. She allegedly embezzled $6,041.63. (Meridian Star)
9. Belington (WV) Little League treasurer was convicted $13,000 (State Journal)
10. A parking meter repairman stole more than $170,000 from the City of Alexandria, VA… in coins. (kare11.com)
Charity Check Up:
She put over $200,000 in mostly grant money in an unauthorized account. She is currently in custody for violating the terms of her bail. She used some of the stolen $209,000 for personal use with the rest sitting in her account. She pled no contest to a previous charge of marijuana possession where she was smoking a marijuana cigarette during a court-warranted search. She is currently serving the last year of a four-year suspended sentence after pleading guilty in 2005 to a larceny charge for stealing $14,000 from an elementary school cancer fund, where she worked as a secretary.
Where was the judgment of the hiring authority in this case? Obviously a reference check never took place. Who was overseeing the bookkeepers work? Were there internal controls in place for check cashing/endorsement and depositing?
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, 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, 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, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
What’s Included:
Skunk of the Month
Getting off was not enough
Nonprofit News-In Case You Missed It
Nonprofit Lobbying Obama Appointment Push; Serve America Bill Law; Foundations Hit Badly By Economy
Political/Official Chicanery
Congressman; Police Chief; Library Board President; IRS employee
Comings and Goings
What Do You Think?
***the single biggest inquiry we have is… ‘where do you find these misdeeds?’ To the degree possible, we will cite our sources so that you can follow up on these seemingly astonishing (and sordid) tragedies. Enjoy!
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
What’s Wrong with this Picture?
The executive director of Genesis Family Center, a Fresno (CA) child-welfare agency, was charged with embezzling more than $500,000. She was sentenced to three years on probation and 300 days in a work-furlough program with electronic monitoring after she pleaded no contest to felony tax evasion and embezzlement. Even in the face of the conviction she stayed on as the agency’s chief executive officer. She ignored the judge’s order that forbade her from attending social events while on probation and in a work furlough program. Her picture was splashed in a magazine at social events and she was seen at luncheons. The judge had her arrested and he sentenced her to a year in jail. She finally resigned her position with the nonprofit. (fresnobee.com)
Nonprofit News-
In Case You Missed It:
1. As he sat on the board of directors and vice president of finance, he embezzled nearly $700,000 from the Columbian Retirement Home, a (CA) nonprofit retirement facility operated by the Knights of Columbus. (Mercury-Register)
2. A coalition of nonprofit groups has started a campaign to exempt lobbyists for charitable and social welfare organizations that have tax-free status from being considered for appointment in the Obama administration. (NYT)
3. President Obama signed landmark legislation that boosts national service, volunteerism, and innovative social projects. The Edward M. Kennedy Serve America Act is to expand the country’s national-service programs and provide money for entrepreneurial approaches to social problems. While the Serve America Act outlines federal programs that can now expand or start operating, Congress still has to allocate money to pay for them.
4. The Fidelity Charitable Gift Fund, Vanguard Charitable Endowment Program and the Schwab Charitable Fund are some of the growing donor funds. In part the growth is because private foundations are frustrated by increasing fees, tax requirements and general upkeep. Donor funds allow donors to take an immediate tax deduction after making contributions; donors can advise the fund on where the grants should go; the funds don't have to make distributions as often as a foundation would; donors can give many types of assets -- including cash, securities and even art -- depending on the fund's specific rules. (WSJ)
5. Maria Eitel, president of the Nike Foundation, is to be chief executive of the Corporation for National and Community Service, President Obama announced. The corporation manages the country’s national-service programs, which are set to grow significantly under the Serve America Act. (Chronicle of Philanthropy)
6. The former executive director of Children’s Alliance (CO) was arrested and accused of stealing $20,000 from the organization (DenverChannel.com)
7. The nation’s foundations lost nearly $150 billion in assets last year, or almost as much as they have given away over the last four years, a new Foundation Center study has found. Foundation giving for the year nonetheless held steady at an estimated $45.6 billion, falling by just 1 percent on an inflation-adjusted basis. Nearly two-thirds of foundations expect to reduce the number or the size of grants they award in 2009. (NYT)
8. The former pastor of a prominent North Shore Episcopal church stands accused of stealing $84,537 over the three years from his parish to pay for plastic surgery and Botox injections, as well as prescription drugs. (topix.com/religion)
9. The former accountant and office manager for Cornerstone Christian Fellowship has been sentenced to five years in prison for embezzling $495,000 from the Chandler (AZ) church. (Azcentral.com)
10. A former employee of the Lucile Packard Foundation for Children's Health pleaded no contest to embezzling more than $350,000 over an eight-year period from an endowment fund intended to help sick youths. (San Francisco Chronicle)
11. The deputy director of two NYC Head Start programs has pleaded guilty to stealing $600,000 from the program (usdoj.gov)
12. A director and initial incorporator for United Way of the Mountains, its successor, Kentucky Charities United, and Feed God’s Children, Inc. have been convicted of using money raised to pay for residential utilities, vehicle loan, vehicle insurance and other living expenses. (The Morehead News)
13. A Baltimore pastor who worked with developmentally disabled people as an operations manager for the Arc of Baltimore was charged with befriending a blind and disabled man in his care, then paying a hit man $50,000 in church funds for an execution so he could collect on a $200,000 life insurance policy. The pastor had policies in his name as beneficiary worth nearly $1 million combined. (Baltimore Sun)
We flagged these few examples of nonprofit mischief
1. St. Paul’s Memorial Episcopal Church (NY) $85,000
2. San Diego Hispanic Chamber of Commerce (CA) $70,000 (S.D.Union-Tribune)
3. Turning Pointe Therapeutic Riding $209,000 (Westerlysun.com)
4. The Starting Place (FL) $2 million (Sun-Sentinel.com)
5. California State Bar $675,000 (Law.com)
6. First Witness Child Abuse Resource Center (MN) $125,000 (wcco.com)
7. Fremont (MI) Area Community Foundation $20,000 (Muskegon Chronicle)
8. United Steelworkers of America (PA) $88,000 (Pitt. Post-Gazette)
9. Ranch Hope (NJ) $350,000 (nj.com)
10. First Witness Child Abuse Resource Center (MN) $125,000 (Duluth News Tribune)
11. Salem United Methodist Church $113,000 (FDLREPORTER.COM)
12. First Congregational Church (MI) $50,000 (Gaylord Herald-Times)
13. First Baptist Church on Highland Avenue (NC) $300,000 (journalnow.com)
14. Community Senior Serv (CA) $1 million (Huntington Beach Independent)
15. Southern Arizona Legal Aid $18,000 (azstarnet.com)
*update
Political/public official chicanery (just a few):
1. Former (NC) congressman Frank Ballance who was convicted of fraudulently conspiring to exercise his influence over state appropriations for the personal benefit of his family is able to serve his remaining sentence at home. Federal prosecutors said that Ballance channeled $2.3 million dollars to a private foundation and the money was then diverted to the benefit of members of his family, including his son and mother. (Beaufort-observer)
2. A (CA) police chief, a mayor and a city councilman in his 40 years of public service has pleaded guilty to felony embezzlement for using his city-issued credit card to buy thousands of dollars in casino tokens and alcohol. His wife is in deeper trouble facing 23 felony counts, including grand theft and embezzlement, for allegedly getting more than $800,000 in loans under false pretenses from friends, neighbors and colleagues, including the mayor and city manager of Canyon Lake, and then paying them back with bad checks. In one instance she allegedly wrote a bad check to her husband. (L.A. Times)
3. The Roosevelt (NY) Public Library's former board president has been arrested on charges she stole $47,000 from the library to pay for airplane tickets, car repairs and groceries. In 2002, it was reported that the library's then-business manager allegedly misappropriated $15,000 of library funds. (OrlandoSentinel.com)
4. The former Standish (MI) city treasurer has pleaded no contest to neglect of duty in an embezzlement case. He made illegal transfers involving city tax accounts at the direction of the former City Manager, who faces charges of embezzlement and neglect of duty. (Chicago Tribune)
5. A contract worker for the U.S. Internal Revenue Service has been found guilty of embezzling nearly $500,000 in remittance checks (UPI.com)
6. A federal judge sentenced a former Buchanan County (MO) official who pleaded guilty to stealing money meant for 120 people, altering accounting records in her office to hide the embezzlements and submitting false reports to the Social Security Administration. She acknowledged taking the money between September 2003 and August 2006. (KansasCity.com)
7. The former executive director of the Bullskin Township/Connellsville Township Joint Sewerage Authority is in the Fayette County Prison after being charged by state police with siphoning more than $100,000 from the authority. (wpxi.com)
8. Former municipal court clerk and utility department clerk for the Town of Taylorsville, has been indicted on one count of embezzlement. She allegedly embezzled $6,041.63. (Meridian Star)
9. Belington (WV) Little League treasurer was convicted $13,000 (State Journal)
10. A parking meter repairman stole more than $170,000 from the City of Alexandria, VA… in coins. (kare11.com)
Charity Check Up:
She put over $200,000 in mostly grant money in an unauthorized account. She is currently in custody for violating the terms of her bail. She used some of the stolen $209,000 for personal use with the rest sitting in her account. She pled no contest to a previous charge of marijuana possession where she was smoking a marijuana cigarette during a court-warranted search. She is currently serving the last year of a four-year suspended sentence after pleading guilty in 2005 to a larceny charge for stealing $14,000 from an elementary school cancer fund, where she worked as a secretary.
Where was the judgment of the hiring authority in this case? Obviously a reference check never took place. Who was overseeing the bookkeepers work? Were there internal controls in place for check cashing/endorsement and depositing?
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• An Assault on Charities (ncrp.org)
• Nonprofit Hospitals Chase Debt (The Sun News)
• Is CEO Pay at Angel Food Ministries Excessive? (Atlanta Journal
Constitution)
• Five Rivers Outcome a Travesty (The Sun News)
• Where’s the Ire? (ncrp.org)
• A rags-to-riches life, with painful detours (Atlanta Journal Constitution)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, 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, 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, National Coalition of Homeless Newsletter, The Michigan Nonprofit Management Manual, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
Wednesday, March 25, 2009
Nonprofit Imperative
…. your nonprofit browser
February 2009
What’s Included:
A record amount of misdeeds in one month: $208.795 million
Skunk of the Month
Nonprofit Stimulus problem?; Religious Compensation
Nonprofit News-In Case You Missed It
Nonprofits Wield a Political Whop: Another Misconduct Tip-line; Large Charitable Gifts Dropping
Political/Official Chicanery
Alderman; PA state Senator; Jailer; GSA Accountant; School CFO; NASA Theft
Comings and Goings
What Do You Think?
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
A Provocative Letter
Citing a New York Times story that "theft and embezzlement in the nonprofit sector was over $40 billion in 2006 alone”, Mark Fitzgibbons, President of Corporate and Legal Affairs at American Target Advertising, Inc. sent a letter to, the President of the National Association of State Charitable Officials (NASCO), the umbrella organization for attorneys general and other state officials which regulate nonprofit organizations. He noted, “… nonprofit organizations will now receive untold billions of taxpayer dollars under the hastily prepared, controversial American Recovery and Reinvestment Act (ARRA), otherwise known as the Stimulus Bill. This unprecedented, rushed federal spending on nonprofit organizations is likely to result in fraud and abuse both by recipients and government dispensers of funds in proportion to the dollars spent, which likely means fraud will be at record-breaking levels.”
What do you think?
------------------------------
One Way to Look at It
A jury found the Irish Catholic priest guilty of embezzling hundreds of thousands of dollars from the collection plates at St. Vincent Ferrer Church in Delray Beach and using the money to support a lifestyle that would have worn out rock stars and NBA players. He used church money for trips to Las Vegas and the Bahamas. He used it to buy real estate, furniture and jewelry. He used it to gamble and entertain women. He suggested that he might have lived so large to deal with the stress of the job, that he turned to babes, blackjack and Vegas because he was tired of hearing the faithful complain about their problems. He took money from a slush fund - which the Irish media dubbed a "lush fund" - and destroyed financial records. He testified that the stolen money was "small compensation" for his service. He asked a jury to accept that his behavior might have been immoral but not illegal.
Nonprofit News-
In Case You Missed It:
1. According to a study by the Campaign Finance Institute, an academic research group affiliated with George Washington University, nonprofits, known as 501(c) 4s and 501(c) 6s, spent a total of nearly $200 million in the 2008 campaign cycle. The total tripled the amount those types of groups spent in the 2004 presidential campaign cycle and is only expected to grow in the 2010 election cycle.
2. The Catholic Diocese of Cleveland announced that a financial-misconduct hot line has been established to report any concerns about suspected financial wrongdoing. The decision to utilize the system in Cleveland was, in part, based on the tax-fraud convictions of the diocese's former chief legal and financial officer and former diocesan accountant. According to the evidence presented in the Cleveland federal court, Smith directed $17.5 million in church business to the accountant between 1997 and 2003. The accountant then made payments, characterized as kickbacks, to two companies owned by Smith. The archdioceses of Chicago, Milwaukee and Cincinnati are using a similar system. (see next 3 items)
3. In response to preventing future cases of financial embezzlement, after a priest in Darien, Conn. embezzled $1.4 million from his parish, legislation that would take financial control of parishes away from the bishops and give governing authority to boards made up of members in each individual parish. Because of public pressure, hearings were cancelled.
4. The Rev. Charles Newman, former president of Archbishop Ryan High School, pleaded guilty to felony theft and forgery charges in connection with his having stolen what prosecutors say is $900,000 from the school and his order of Franciscan Friars. He allegedly gave $54,000 of that money to a former student whom he is accused of having sexually abused. He did not face criminal charges on the alleged sexual abuse because the complaint surfaced after the statute of limitations had passed.
5. A jury in West Palm Beach convicted a priest of stealing from his church. He used the money to finance a lavish lifestyle that included trips to the Bahamas and Las Vegas, jewelry and home furniture. Father Guinean will remain jailed until his March 25 sentencing.
6. Charitable gifts of $1-million or more from individual donors fell by 33 percent in the last half of 2008 compared with the same period in 2007, according to a new analysis of big gifts by researchers at the Indiana University Center on Philanthropy
7. Serious problems with accounting procedures in Arlington (WA) opened the door for the city to be a victim of embezzlement which led to a former city finance department admitting that she wrote herself dozens of city checks worth more than $1.3 million.
8. An Associated Press investigation shows that the Army Emergency Relief Fund grew into a $345 million charity but spent only $64 million (about 12 years of reserves). In its defense, it says that Charity Navigator gave it a 4 star rating for three consecutive years.
9. Two money managers who oversaw investments for Carnegie Mellon University and other institutions were arrested on charges of running an estimated $114 million, decade-long swindle. The pair, both former part owners of the New York Islanders National Hockey League team, are accused of using client money as "their personal piggy-bank" to fund lavish lifestyles.
10. Former officials of El Paso’s National Center for Employment of the Disabled are accused of stealing tens of millions of federal dollars appeared in federal court Dodgers Dream Foundation build 42 youth baseball fields and a $10-million gift to help build the Children's Museum of Los Angeles (CA. In the five years from 2001 to 2006 covered by the indictment, NCED received more than $700 million from the government as payment for the manufacture of military uniforms, chemical protective suits, boxes and cardboard products for the U.S. Postal Service.
11. A former finance executive assistant of Mercy Medical Center Foundation, an employee for 28 years, is accused of embezzling more than $200,000 from the hospital over a period of three years. She was charged with first-degree theft
12. More foundation leaders have started counting their expenses as charity because total donations fell short of the charitable spending level the federal government required
13. A federal grand jury has returned an indictment charging Capt. Michael Dung Nguyen. It alleges that between April 2007 and February 2009, while deployed to Iraq, he stole in excess of $690,000 in U.S. currency that was entrusted to him. He attempted to launder the stolen money by purchasing a 2008 BMW and a 2009 Hummer H3T, in addition to purchasing computers, electronics and furniture.
14. Best known for his charitable activities, including a $5-million pledge to help the), Bruce Fred Friedman, is accused of diverting investors' money to himself and to a charity he founded and operates. He spent much of the money on luxuries that included a $6.5-million Malibu home, vacations, cars, jewelry and designer clothing. The SEC said Friedman gave at least $1.8 million of investor money to his charity, the Friedman Charitable Foundation. Friedman was previously convicted of grand theft and sentenced to 40 months in state prison for stealing $300,000 from Avery International Corp.
15. Fraud and abuse helped boost Medicare spending on home health services 44% over five years as some providers exaggerated patients' medical conditions and others billed for unnecessary services or care they did not provide, a Government Accountability Office reported. The GAO reviewed home care payments from 2002 to 2006, when spending reached $13 billion.
We flagged these few examples of nonprofit mischief (can’t make this up):
1. Battle Ground High School (WA) Grad Night Committee $11,000
2. Diversified Industrial Services (WA) $110,000
3. Lincoln Park Fire Department (MI) $2000
4. Pleasant Valley (CA) Sports Boosters Club $60,000
5. Shingleton Recreational Club (MI) thousands
6. Big Brothers Big Sisters chapter of Defiance, Henry and Paulding counties (OH) $15000
7. Bordentown Historical Society (PA) $80,000
8. Union County West End Fire Company (PA) $38,000
9. Sioux Empire Fair Association (SD) $383,000
10. Port Jervis Youth Football League. (NY) $10,000
11. Rocky Ripple Community Association (IN) $60,000
12. Washingtonville Soccer Club (NY) $130,000
13. Farmington (NM) Civic Center Foundation $375,000
14. Fremont (MI) Area Community Foundation >$20000
15. St. John’s College of Nursing and Health Sciences (MO) $500,000
16. Congregational Church of South Dennis (MA) $650,000
17. Northshore Supporting Organization (IL) $3 million
18. Lucile Packard Foundation for Children's Health (CA) $350,000
19. Historic Savannah Foundation (GA) $75,000
20. Lehigh Valley Community Foundation (PA) $500,000
*update
Political/public official chicanery (just a few):
1. Former Norwich alderman has pleaded no contest to embezzling from two nonprofit organizations--- $4,650 while serving as treasurer for the Norwich Little League and took $10,567 from Norwich High Stakes Bingo, Inc., a veterans organization
2. A jury found former state Sen. Vincent Fumo, a legendary power broker in Pennsylvania politics, guilty of 137 criminal charges. He once boasted of using "OPM" — other people's money — and prosecutors said he used state employees to support his lavish lifestyle. He defrauded the South Philadelphia nonprofit, Citizens' Alliance for Better Neighborhoods, by getting it to pay for thousands of tools, consumer goods and other items. His former aid that headed Citizens' Alliance was convicted in the conspiracy. Fumo also was also guilty of defrauding the Independence Seaport Museum, where he was a board member, by using its luxury yachts to take overnight cruises.
3. A former chief of a South Carolina jail has been sentenced after pleading guilty to an embezzlement charge. He will serve 18 months in prison. He asked the judge for a chance to repay the $360,000 he was accused of embezzling from the Dorchester County jail.
4. Former Canyon Lake (CA) Councilman Frank Kessler pleaded guilty to embezzlement
5. A payroll technician for the city of Colton has been arrested and charged with one count of embezzlement in connection with an estimated loss of $28,000. He resigned.
6. An accountant for the General Services Administration admitted he was an embezzler of $600,000
7. East Nicolaus school district's former chief financial officer has been sent to jail for embezzlement of $23,000
8. The former chief financial officer of Lincoln (NJ) is charged with stealing $10,000. He resigned and was arrested and is out on bail.
9. While working for the John Kerry presidential campaign, and later at a nonprofit group, Shane Tessimond stole checks and gave them to an associate, who deposited the money. He also is accused of opening a credit card using a co-worker's stolen social security number. Prosecutors say the entire scam led to the theft of more than $137,000.
10. A NASA official steered $9.6 million to a consulting firm at Mississippi State University where he was the principal consultant. He was NASA’s chief of staff and liaison to the White House.
11. A former employee of the year in the Durham County (NC) Sheriff's Office pleaded guilty in Superior Court to embezzling $113,000. His sentence: probation for two years.
12. A former policy director for the U.S. House of Representatives Committee on Transportation and Infrastructure, and a legislative assistant to a U.S. senator, were indicted for an all-expenses-paid trip to Game One of the 2003 Baseball World Series. Included was a round-trip commercial airline travel to and from New York City; use of a chauffeured sport utility vehicle for transportation while in New York City; a ticket for each official to Game One of the World Series; a souvenir baseball jersey for each official; as well as lodging, meals, drinks and entertainment at a strip club. All have pleaded guilty.
13. While acting as its treasurer, Gresham Village (WI) trustee stole nearly $30,000 from Cashiers Who Care, a nonprofit.
Charity Check Up:
For more than half a century, charities have been barred by federal law from making contributions to political campaigns. A review of campaign-finance and federal tax records by the New York Times shows that at least 81 tax-exempt charities have given contributions to legislative candidates since 2005, with some organizations giving more than once to multiple candidates. The donations — by museums, churches, hospitals, even Little Leagues and soccer clubs — underscore the lack of oversight of lawmakers’ fund-raising practices in the state. Asked about the contributions, legislators and charity officials offered several responses, including apologies, suggestions of clerical errors and defiance. Some of the contributions were given as the cost of admission to political fund-raisers, which some donors said they did not realize it counted as campaign contributions. On the other hand, Assemblywoman Rhoda S. Jacobs, a Queens Democrat, received contributions from several nonprofits, according to the records, including Maimonides Medical Center, which gave her campaign $2,500 in 2006. That summer, Ms. Jacobs secured state financing to help Maimonides buy a CT scanner.
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Is CEO Pay at Angel Food Ministries Excessive (Atlantic Journal Constitution)
• Where’s the Ire? (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, 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, 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, National Coalition of Homeless Newsletter, , MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
The Michigan Nonprofit Management Manual (Governance Section) (3,000 distribution)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
February 2009
What’s Included:
A record amount of misdeeds in one month: $208.795 million
Skunk of the Month
Nonprofit Stimulus problem?; Religious Compensation
Nonprofit News-In Case You Missed It
Nonprofits Wield a Political Whop: Another Misconduct Tip-line; Large Charitable Gifts Dropping
Political/Official Chicanery
Alderman; PA state Senator; Jailer; GSA Accountant; School CFO; NASA Theft
Comings and Goings
What Do You Think?
Skunk of the Month…
Skunk of the Month is the designation made by Nonprofit Imperative, the organization dedicated to eliminating waste, fraud, abuse and mismanagement in nonprofits and government. The Skunk of the Month award is given to charities and government officials who show blatant disregard for the interests and trust of contributors and taxpayers. This month’s example is:
A Provocative Letter
Citing a New York Times story that "theft and embezzlement in the nonprofit sector was over $40 billion in 2006 alone”, Mark Fitzgibbons, President of Corporate and Legal Affairs at American Target Advertising, Inc. sent a letter to, the President of the National Association of State Charitable Officials (NASCO), the umbrella organization for attorneys general and other state officials which regulate nonprofit organizations. He noted, “… nonprofit organizations will now receive untold billions of taxpayer dollars under the hastily prepared, controversial American Recovery and Reinvestment Act (ARRA), otherwise known as the Stimulus Bill. This unprecedented, rushed federal spending on nonprofit organizations is likely to result in fraud and abuse both by recipients and government dispensers of funds in proportion to the dollars spent, which likely means fraud will be at record-breaking levels.”
What do you think?
------------------------------
One Way to Look at It
A jury found the Irish Catholic priest guilty of embezzling hundreds of thousands of dollars from the collection plates at St. Vincent Ferrer Church in Delray Beach and using the money to support a lifestyle that would have worn out rock stars and NBA players. He used church money for trips to Las Vegas and the Bahamas. He used it to buy real estate, furniture and jewelry. He used it to gamble and entertain women. He suggested that he might have lived so large to deal with the stress of the job, that he turned to babes, blackjack and Vegas because he was tired of hearing the faithful complain about their problems. He took money from a slush fund - which the Irish media dubbed a "lush fund" - and destroyed financial records. He testified that the stolen money was "small compensation" for his service. He asked a jury to accept that his behavior might have been immoral but not illegal.
Nonprofit News-
In Case You Missed It:
1. According to a study by the Campaign Finance Institute, an academic research group affiliated with George Washington University, nonprofits, known as 501(c) 4s and 501(c) 6s, spent a total of nearly $200 million in the 2008 campaign cycle. The total tripled the amount those types of groups spent in the 2004 presidential campaign cycle and is only expected to grow in the 2010 election cycle.
2. The Catholic Diocese of Cleveland announced that a financial-misconduct hot line has been established to report any concerns about suspected financial wrongdoing. The decision to utilize the system in Cleveland was, in part, based on the tax-fraud convictions of the diocese's former chief legal and financial officer and former diocesan accountant. According to the evidence presented in the Cleveland federal court, Smith directed $17.5 million in church business to the accountant between 1997 and 2003. The accountant then made payments, characterized as kickbacks, to two companies owned by Smith. The archdioceses of Chicago, Milwaukee and Cincinnati are using a similar system. (see next 3 items)
3. In response to preventing future cases of financial embezzlement, after a priest in Darien, Conn. embezzled $1.4 million from his parish, legislation that would take financial control of parishes away from the bishops and give governing authority to boards made up of members in each individual parish. Because of public pressure, hearings were cancelled.
4. The Rev. Charles Newman, former president of Archbishop Ryan High School, pleaded guilty to felony theft and forgery charges in connection with his having stolen what prosecutors say is $900,000 from the school and his order of Franciscan Friars. He allegedly gave $54,000 of that money to a former student whom he is accused of having sexually abused. He did not face criminal charges on the alleged sexual abuse because the complaint surfaced after the statute of limitations had passed.
5. A jury in West Palm Beach convicted a priest of stealing from his church. He used the money to finance a lavish lifestyle that included trips to the Bahamas and Las Vegas, jewelry and home furniture. Father Guinean will remain jailed until his March 25 sentencing.
6. Charitable gifts of $1-million or more from individual donors fell by 33 percent in the last half of 2008 compared with the same period in 2007, according to a new analysis of big gifts by researchers at the Indiana University Center on Philanthropy
7. Serious problems with accounting procedures in Arlington (WA) opened the door for the city to be a victim of embezzlement which led to a former city finance department admitting that she wrote herself dozens of city checks worth more than $1.3 million.
8. An Associated Press investigation shows that the Army Emergency Relief Fund grew into a $345 million charity but spent only $64 million (about 12 years of reserves). In its defense, it says that Charity Navigator gave it a 4 star rating for three consecutive years.
9. Two money managers who oversaw investments for Carnegie Mellon University and other institutions were arrested on charges of running an estimated $114 million, decade-long swindle. The pair, both former part owners of the New York Islanders National Hockey League team, are accused of using client money as "their personal piggy-bank" to fund lavish lifestyles.
10. Former officials of El Paso’s National Center for Employment of the Disabled are accused of stealing tens of millions of federal dollars appeared in federal court Dodgers Dream Foundation build 42 youth baseball fields and a $10-million gift to help build the Children's Museum of Los Angeles (CA. In the five years from 2001 to 2006 covered by the indictment, NCED received more than $700 million from the government as payment for the manufacture of military uniforms, chemical protective suits, boxes and cardboard products for the U.S. Postal Service.
11. A former finance executive assistant of Mercy Medical Center Foundation, an employee for 28 years, is accused of embezzling more than $200,000 from the hospital over a period of three years. She was charged with first-degree theft
12. More foundation leaders have started counting their expenses as charity because total donations fell short of the charitable spending level the federal government required
13. A federal grand jury has returned an indictment charging Capt. Michael Dung Nguyen. It alleges that between April 2007 and February 2009, while deployed to Iraq, he stole in excess of $690,000 in U.S. currency that was entrusted to him. He attempted to launder the stolen money by purchasing a 2008 BMW and a 2009 Hummer H3T, in addition to purchasing computers, electronics and furniture.
14. Best known for his charitable activities, including a $5-million pledge to help the), Bruce Fred Friedman, is accused of diverting investors' money to himself and to a charity he founded and operates. He spent much of the money on luxuries that included a $6.5-million Malibu home, vacations, cars, jewelry and designer clothing. The SEC said Friedman gave at least $1.8 million of investor money to his charity, the Friedman Charitable Foundation. Friedman was previously convicted of grand theft and sentenced to 40 months in state prison for stealing $300,000 from Avery International Corp.
15. Fraud and abuse helped boost Medicare spending on home health services 44% over five years as some providers exaggerated patients' medical conditions and others billed for unnecessary services or care they did not provide, a Government Accountability Office reported. The GAO reviewed home care payments from 2002 to 2006, when spending reached $13 billion.
We flagged these few examples of nonprofit mischief (can’t make this up):
1. Battle Ground High School (WA) Grad Night Committee $11,000
2. Diversified Industrial Services (WA) $110,000
3. Lincoln Park Fire Department (MI) $2000
4. Pleasant Valley (CA) Sports Boosters Club $60,000
5. Shingleton Recreational Club (MI) thousands
6. Big Brothers Big Sisters chapter of Defiance, Henry and Paulding counties (OH) $15000
7. Bordentown Historical Society (PA) $80,000
8. Union County West End Fire Company (PA) $38,000
9. Sioux Empire Fair Association (SD) $383,000
10. Port Jervis Youth Football League. (NY) $10,000
11. Rocky Ripple Community Association (IN) $60,000
12. Washingtonville Soccer Club (NY) $130,000
13. Farmington (NM) Civic Center Foundation $375,000
14. Fremont (MI) Area Community Foundation >$20000
15. St. John’s College of Nursing and Health Sciences (MO) $500,000
16. Congregational Church of South Dennis (MA) $650,000
17. Northshore Supporting Organization (IL) $3 million
18. Lucile Packard Foundation for Children's Health (CA) $350,000
19. Historic Savannah Foundation (GA) $75,000
20. Lehigh Valley Community Foundation (PA) $500,000
*update
Political/public official chicanery (just a few):
1. Former Norwich alderman has pleaded no contest to embezzling from two nonprofit organizations--- $4,650 while serving as treasurer for the Norwich Little League and took $10,567 from Norwich High Stakes Bingo, Inc., a veterans organization
2. A jury found former state Sen. Vincent Fumo, a legendary power broker in Pennsylvania politics, guilty of 137 criminal charges. He once boasted of using "OPM" — other people's money — and prosecutors said he used state employees to support his lavish lifestyle. He defrauded the South Philadelphia nonprofit, Citizens' Alliance for Better Neighborhoods, by getting it to pay for thousands of tools, consumer goods and other items. His former aid that headed Citizens' Alliance was convicted in the conspiracy. Fumo also was also guilty of defrauding the Independence Seaport Museum, where he was a board member, by using its luxury yachts to take overnight cruises.
3. A former chief of a South Carolina jail has been sentenced after pleading guilty to an embezzlement charge. He will serve 18 months in prison. He asked the judge for a chance to repay the $360,000 he was accused of embezzling from the Dorchester County jail.
4. Former Canyon Lake (CA) Councilman Frank Kessler pleaded guilty to embezzlement
5. A payroll technician for the city of Colton has been arrested and charged with one count of embezzlement in connection with an estimated loss of $28,000. He resigned.
6. An accountant for the General Services Administration admitted he was an embezzler of $600,000
7. East Nicolaus school district's former chief financial officer has been sent to jail for embezzlement of $23,000
8. The former chief financial officer of Lincoln (NJ) is charged with stealing $10,000. He resigned and was arrested and is out on bail.
9. While working for the John Kerry presidential campaign, and later at a nonprofit group, Shane Tessimond stole checks and gave them to an associate, who deposited the money. He also is accused of opening a credit card using a co-worker's stolen social security number. Prosecutors say the entire scam led to the theft of more than $137,000.
10. A NASA official steered $9.6 million to a consulting firm at Mississippi State University where he was the principal consultant. He was NASA’s chief of staff and liaison to the White House.
11. A former employee of the year in the Durham County (NC) Sheriff's Office pleaded guilty in Superior Court to embezzling $113,000. His sentence: probation for two years.
12. A former policy director for the U.S. House of Representatives Committee on Transportation and Infrastructure, and a legislative assistant to a U.S. senator, were indicted for an all-expenses-paid trip to Game One of the 2003 Baseball World Series. Included was a round-trip commercial airline travel to and from New York City; use of a chauffeured sport utility vehicle for transportation while in New York City; a ticket for each official to Game One of the World Series; a souvenir baseball jersey for each official; as well as lodging, meals, drinks and entertainment at a strip club. All have pleaded guilty.
13. While acting as its treasurer, Gresham Village (WI) trustee stole nearly $30,000 from Cashiers Who Care, a nonprofit.
Charity Check Up:
For more than half a century, charities have been barred by federal law from making contributions to political campaigns. A review of campaign-finance and federal tax records by the New York Times shows that at least 81 tax-exempt charities have given contributions to legislative candidates since 2005, with some organizations giving more than once to multiple candidates. The donations — by museums, churches, hospitals, even Little Leagues and soccer clubs — underscore the lack of oversight of lawmakers’ fund-raising practices in the state. Asked about the contributions, legislators and charity officials offered several responses, including apologies, suggestions of clerical errors and defiance. Some of the contributions were given as the cost of admission to political fund-raisers, which some donors said they did not realize it counted as campaign contributions. On the other hand, Assemblywoman Rhoda S. Jacobs, a Queens Democrat, received contributions from several nonprofits, according to the records, including Maimonides Medical Center, which gave her campaign $2,500 in 2006. That summer, Ms. Jacobs secured state financing to help Maimonides buy a CT scanner.
What do you think??? : gary.r.snyder@gmail.com
Don’t miss Gary Snyder’s latest contribution to the National Committee on Responsive Philanthropy website (ncrp.org)
Nonprofit Imperative gathers its information solely from public documents...some of which are directly quoted. Virtually all cited are in some phase criminal proceedings; some have not been charged, however.
Recent (cites) Comings and Goings:
• Is CEO Pay at Angel Food Ministries Excessive (Atlantic Journal Constitution)
• Where’s the Ire? (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• The Best Charitable Watchdog Going Kaput (ncrp.org)
• Five Rivers leaders guilty on six counts (The Sun News)
• Angel Food chief has led up-and-down life (Atlanta Journal Constitution)
• Our Students Deserve Better (ncrp.org)
• National Religious Broadcasters March 7,2009
• Siphoning Off Sacred Funds (ncrp.org)
• The Accountants and Regulators Role in the Current Collapse (ncrp.org)
• Veterans Whine as Executives Dine (ncrp.org)
• Government agency Monitoring: Indifference and Hush (ncrp.org)
• The Sun News, Atlanta Journal Constitution, Ethics World, Aspen Philanthropy Newsletter, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, 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, 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, National Coalition of Homeless Newsletter, , MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org,
• Nonprofits: On the Brink (iUniverse, 2006)
The Michigan Nonprofit Management Manual (Governance Section) (3,000 distribution)
Our intent is to keep you informed.... You may send an e-mail that will remove you from our contact list and future mailings by emailing to nonprofitsonthebrink@gmail.com with the word "remove" in the subject line.
Email: gary.r.snyder@gmail.com
6584 Pleasant Lake Court, West Bloomfield, Michigan 48322, 248/324-3700
Website: www.garyrsnyder.com
Gary Snyder is the author of Nonprofits: On the Brink (iUniverse, February, 2006) and articles in numerous publications. The book can be bought at amazon.com, barnesandnoble.com, Barnes and Noble (store) and iUniverse.com (publisher).
© Gary R. Snyder, All Rights Reserved, 2009
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