Stories from all over (even Japan) offer a smorgasbord of fiscal misbehavior types, demonstrating the many ways charities are at risk.
- A typical pattern is the employee who diverts funds to his own use. Mainichi News reports from Osaka that the 72-year-old Kunihiko Konishi stands accused of diverting ¥40 million (about $350,000) from the Asuka-kai Foundation, though investigators suspect that the total amount could be as high as ¥132 million (about $1.2 million). Asuka-kai Foundation receives the income from a parking garage that it is supposed use to promote the welfare of decendants of Japan's former outcaste group, the Burakumin (部落民).
- Similarly, Gary Freund, 59, in San Francisco has been arrested for diverting $165,000 from the UCalSF Mount Zion Hospital Auxiliary (EIN 94-6065433 Form 990), by forging signature and making unathorized debit card withdrawals. The auxiliary operates a gift shop and does fundraisers for indigent patients. Mr. Freund reportedly worked in the hospital business for over 25 years. (San Francisco Chronicle)
- Then there are the people who fake charities. Donald McCarver and Anne Pellegrini of Villa Park Illinois are accused by Du Page County police of posing as military reservists (in uniforms) selling $5 raffle tickets for a non-existent Navy/Marines Family Relief Fundraiser. (Chicago Sun-Times)
- It's not easy to fool the government, but in Denver William P. Orr has just been indicted for (among other things) fraudulently obtaining a research grant for $3.6 million for his National Alternative Fuels Association (EIN 84-1575567 Form 990 from 2003). The grant came through an earmark (pork barrel project). Mr. Orr claims that the indictment is in retaliation for his complaints about the EPA outlined on the organization's web site. The 2003 Form 990 is unusal in showing no income other than the government grant and no regular staff salaries for "general and administrative" (e.g. accounting).
- And the dishonest can abscond with really big money using charity connections. The LA Times reports that James P. Lewis Jr., former money manager of Orange County, California, was sentenced to 30 years in prison for defrauding clients $156 million over two decades in a Ponzi sceme. Many of the victims were fellow Mormons met through church contacts. The scheme was able to continue for so long because it involved retirement accounts that had few payouts.
There's more, but let's give this a break for now. If this keeps up we may need a weekly crime blotter section.