Realization dawns that for small charities embezzlement is an ever present risk, not just an isolated incident.
The St. Paul Pioneer Press is genuinely pioneering with its report on several incidents of fraud in youth sports operations ("Stung by Swindles" Dave Orrick).
- Pete Rolstad took $77,000 while he was president of the Spring Lake Park District 16 Youth Hockey Association (EIN 41-1427092 Form 990).
- Laurie Jones, assistant gambling manager for Brooklyn Park Youth Hockey (EIN 23-7428330 Form 990), is suspected of altering receipts for proceeds of pull-tab bingo (like turning a receipt for $1,529 into one for $529 by turning the 1 into a dollar sign). The skimming might have exceeded $100,000.
- Ronald Worden, past president of the Columbia Heights Basketball Association (EIN 41-1558212 Form 990) is accused of allowing relatives to make withdrawals from association accounts. The group's former treasurer Susan Genosky of complicity in trying to cover up the transactions. The newspaper uncovered evidence that Mr. Worden had sought bankruptcy protection in the period around his presidency.
Directly or indirectly the incidents are related to bingo operations. In each of these cases, the bingo operation dwarfs the sports program. Spring Lake reports pull tab sales of $3.5 million, yielding $745,345 for the team. Brooklyn Park sales were $7.6 million, but only $47,231 went for sports operations. Columbia Heights boosters sold $2.1 million but the team gained $7,740.
Internal controls are obviously going to be problematic when a small, volunteer based charity supports a large gambling operation. It's easy to blame the individual charities and their boards, but the pattern shows that this is something that could happen to any of these youth sports organizations "but for the grace of God." People aren't in the habit of doing credit checks on their fellow parents. Really to blame are the legislatures that facilitate outscale gambling operations that use charity as a pretext.