Oversight: Salvation Army Accounting Flaws Escape Notice

While preparing a recent post about fund diversion at the United Way, I ran across some stories about serious internal fraud cases at the Salvation Army in Toronto and Honolulu (and possibly New York) that for some reason did not receive much press notice. 

Toronto's was an alleged phony-invoice scheme that diverted $2.3 million (Canadian) from the organization's Canada headquarters in Toronto.  It was reported in January by the Toronto Globe & Mail and by CTV.  The full Globe & Mail article may still be available here.  I don't recall seeing it anywhere else. 

Apparently Ming Wa, an accountant for the SA earning $41,000 a year, had first attempted a settlement that would have allowed him to keep most of what he had taken.  In December, an attorney had informed the Salvation Army about the misappropriation on behalf of a client who offered to return 40% of the money in return for a confidentiality agreement.  Acting on the information that it was an inside job, the chief financial officer eventually focused on the computer files of an accountant who had resigned suddenly in early December.  He found spreadsheets documenting 34 deposits with amounts that corresponded to payments made to two companies, which were then investigated and found to be fictitious.  A call to the bank confirmed that Mr. Ming was signer on accounts in the companies' names.  The Salvation Army spokeperson said that controls were in place, but the Globe and Mail pointedly noted that in this case the perpetrator had foolishly outed himself, at which point the spokesperson said that he could not comment further due to the ongoing criminal investigation. 

This week, there is a story out of Hawaii about a prison escapee who landed a position as planned giving director at Salvation Army Hawaii.  Timothy Peter Janusz was caught after an anonymous tip that he was defrauding seniors.  He had deposited at least $150,000 in checks to account he controlled and received deeds to properties valued at over $200,000.  Both Janusz and his wife Susan had criminal records, yet the Salvation Army only did background checks of staff working with children, and the schools where Mrs. Janusz worked had not found anything amiss. 

The possible third story appears in an odd publicaton called the "North Country Gazette."  It reports an indictment of an accountant in the Manhattan office of Salvation Army named Wilfred Keaton.  Allegedly he deposited 51 checks totalling $166,914 into an account he controlled.  The story is very specific, almost as if it were written directly from an indictment.  However, the story is corroborated nowhere else.  North Country Gazette appears to be published by June Maxam, who bills herself as an "investigative journalist" and was very active in blogging circles during in the Terri Schaivo case. 

So here are two, possible three, cases that reflect serious lapses in very basic accounting controls at the Salvation Army units—not in small, out of the way offices, but in the large metropolitan centers.  The question remains why there has not been more attention given to these stores at a time when much smaller alleged frauds against the Red Cross get headline treatment.  It does charitable organizations no favor when the press looks the other way: it just ensures that abuses will continue. 
 

Comments

[North Country Gazette]

Please contact me ASAP in regard to this posting . Odd publication? I have been in the newspaper business for over 35 years. What's odd about this news publication? I have never been a blogger, where did you get that information. You are inferring my information is false and I have a problem with your attack on professional integrity. And it's Terri Schiavo, not Terry Schaivo--so much for your accuracy. I await your response.

The possible third story appears in an odd publicaton called the "North Country Gazette." It reports an indictment of an accountant in the Manhattan office of Salvation Army named Wilfred Keaton. Allegedly he deposited 51 checks totalling $166,914 into an account he controlled. The story is very specific, almost as if it were written directly from an indictment. However, the story is collaborated nowhere else. North Country Gazette appears to be published by June Maxam, who bills herself as an "investigative journalist" and was very active in blogging circles during in the Terry Schaivo case.

[news]

http://www.northcountrygazette.org/articles/031706SalvationArmy.html

Contact: Barbara Thompson
212.335.9400

If you have a problem with my news report, contact the New York County district attorney's office.

I find it curious that you fail to provide a contact address and that you also operate this BLOG anonymously. ODD

[Anna]

It is best not to trust anything that blogger/conspiracy theorist/liar June Maxam writes or says = just ignore her, and hope you aren't her next online victim.

[Stefanie Wolfe]

I am a former (technically still registered) salvation army soldier. I held many positions in the salvation army church and my husband and myself were on the corps (church) council. We saw where and when money was spent and also alot of abuse of spending. The salvation army today has put their officers and their expenses first and are falling away from the true mission. I pray that God will convict them and that the public holds them more accountable for their handling of donations. (I "cringe" every time a disaster happens in the USA or around the world and hear that the salvation army is involved. I know personally that they are seeing "$dollar-signs"!!!!

[terry pierce]

what i would like to know is this.what hotline do we call to report fraud within our charities?i have been trying to report her for years.

[cheap jordan shoes]

Great, the inside of the many I expect things. Thank you to let me share the joy. Finally I wish you good health, success in work!

[air jordans]

Tierney says that larger scale organizations would have access to other resources, which I suspect means that they pay for consulting services from Bain at the going rate. Bridgespan's Form 990 reports that the company operates with consultants borrowed from Bain & Company, which continues to pay their salaries while on loan.

[Seven]

I can't beielve I've been going for years without knowing that.

[cheap jersey]

information in this sector to read the reports, not just the news.

[バーバリーマフラー]

死者·行方不明者約１００人に上った台風１２号による紀伊半島豪雨から２カ月が経過した。その間、死者·行方不明者や孤立集落が集中した奈良県十津川村や五條市大塔（おおとう）町は注目が集まり、復旧·復興に多くの支援も寄せられた。一方で、被害の深刻さや復旧の姿が伝わらず、風評被害に苦しみながら復興に向かっている被災地もある。
同県中部に位置する川上村は、県内で発生した約１８００カ所の土砂崩れの中でも、人家に隣接した崩落としては最大規模で、土砂崩壊量が概算で東京ドーム１杯分に相当する大規模な土砂災害に見舞われた。土砂崩れの発生は９月４日午後５時半ごろ。役場の電灯が突然消え、近くの国道１６９号を大量の土砂が埋め尽くした。

[ティンバーランド]

ティンバーランド１２日に判明した政府の社会保障分野の一体改革素案（骨子案）は、来年の法案提出を検討してきた受診時定額負担制度の見送りを容認するなど、負担増を先送りしようとする民主党の主張に大幅に譲歩する内容となった。公務員の特権に切り込むことが期待された被用者年金一元化でも、公務員の優遇措置の存続に道を開く文言が盛り込まれた。「公平な負担」を旗印とした社会保障改革の看板は大きくゆがみつつある。

　ティンバーランド骨子案は、病院を訪れるたびに患者が１００円を上乗せして支払う受診時定額負担制度について「（導入見送りを掲げた）民主党ワーキングチームの報告を踏まえる」と記した。７０～７４歳の窓口負担の２割への引き上げでは「平成２４年度の対応については調整」と、その後の引き上げに含みを残したが、党側の猛反発で撤回に追いやられるのは確実な情勢だ。