The purpose of this blog is to show why reform is needed regarding Non Profit entities here in Alaska.
There has been a proliferation of non profits across the country. Alaska is no exception.
Our State laws and regulations regarding non profits are very lax.
Many non profits receive government funds - both federal and State funds. Some take in hundreds of millions of gov't funds each year.
And yet, non profit entities are not required to share very much information with the general public. They do not have to abide by the open meetings laws or share meeting minutes. They are not subject to public records requests. They don't have to share very much financial information - just the last three years of tax return which don't give much detailed information.
Non Profits are like black boxes. They want the public's money but they don't have to explain exactly how it is used (beyond the broad categories of information on their tax returns.)
This is a recipe for disaster. We need more transparency and oversight of non profit organizations.
How can the public evaluate whether or not to donate to a non profit if we have no true idea how funds are spent?
How can the US Gov't or State Gov't or local governments evaluate whether non profits entities are doing a good job and/or truly need more gov't money unless their books are open?
Reform is needed so that all non profits are required to make public exactly how they spend their funds. They should be subject to FOIA requests. Their board meetings should be open to the public. Anyone should be able to review their financial records.
Sunlight goes a long way to stop abuse, fraud, and corruption.
Alaska Non Profit Abuse
Saturday, September 16, 2017
Friday, September 15, 2017
Embezzlement/Theft case (Fairbanks Library Association)
http://www.newsminer.com/news/local_news/ex-library-employee-in-fairbanks-accused-of-stealing-k-from/article_5334293c-5a43-11e7-8dd6-37e18f64723c.html
Fairbanks Daily News Miner - June 25, 2017
Fairbanks Daily News Miner - June 25, 2017
FAIRBANKS — A former Noel Wien Library employee allegedly stole more than $10,000 in donations intended for the Fairbanks Library Foundation.
Court summons were issued last week for Virginia Marie Sabol, 64, a former library purchasing clerk. She’s accused of taking money from library foundation fundraisers between January 2014 and September 2016. The money came from foundation fundraisers such as T-shirt sales, the golden library card program and a program that lets donors put their names on the book-shaped tiles in the lobby.
The Fairbanks Library Foundation is a nonprofit organization that raises money for special library projects such as artwork in the library, cellphone booths and reading programs.
In 2014, an especially big fundraising year, the foundation contributed $100,000 to help build the new North Pole library.
Sabol had worked for the library since 1983. Her employment with the borough ended in January. She is charged with second-degree felony theft.
Borough staff reported a suspected theft this winter, according to the criminal complaint against Sabol.
A borough employee reported financial irregularities while filling in for Sabol, who’d been out on sick leave since September. Some of the money that had been paid for Library Foundation fundraisers hadn’t been deposited in the foundation’s account.
After the borough conducted an audit, borough human resources director Sallie Stuvek confronted Sabol about the discrepancy. Sabol admitted she had some of the library foundation deposits at her home, and she returned $2,307, according to the case against her.
Stuvek said in a Daily News-Miner interview this week $9,774 of foundation deposits remains missing.
“That wasn’t a borough account because the foundation is a nonprofit. That was a failure of the internal control process. This would have been caught a lot sooner had it been (a borough account),” Stuvek said “It’s an unfortunate circumstance. It isn’t reflective of how most normal borough employees handle their responsibilities.”
The borough plans to seek restitution from Sabol, Stuvek said.
This year’s alleged theft was unprecedented in the foundations 40-year history, foundation president Kathy Alton said. The borough has reimbursed the foundation all the money that was supposed to have been given to the foundation.
Because of the case, the foundation has changed its practices so the library employees aren’t handling cash on behalf of the foundation. The foundation plans to formalize its relationship with the borough through a memorandum of agreement. The foundation is also considering phasing out its gold library cards, which let donors check out materials for longer at the library than ordinary library cards. People with lifetime gold cards will still be able to use theirs.
Court summons were sent for Sabol on June 19. Her first court date has not been set.
Contact Outdoors Editor Sam Friedman at 459-7545. Follow him on Twitter: @FDNMoutdoors.
Embezzlement/Theft (Chugiak Mustang Hockey Association)
http://www.alaskastar.com/2017-06-26/woman-charged-stealing-180000-mustang-hockey-association#.Wbx4EciGOUk
A 33-year-old woman has been arrested for allegedly stealing roughly $180,000 from the Mustang Hockey Association.
According to an Anchorage Police Department online Nixle alert issued Monday, June 26, volunteer treasurer Jennifer Suchan, 33, was caught making unauthorized withdrawals from the Chugiak-Eagle River nonprofit youth hockey organization. Suchan (who until recently went by the name Jennifer Kerr) is accused of stealing the money over a 22-month period from August, 2015 until the money was discovered missing by MHA board president Joey Merrick on June 19.
Following an investigation by APD, Suchan was arrested Monday on charges of first-degree theft and scheme to defraud. She was taken to the Anchorage Jail and later released on bond, according to an online database.
Merrick said he became aware of irregularities in the association’s finances when he checked its account online June 19.
“After about 10 minutes I noticed there were some serious problems,” he said.
After discovering the apparent theft, Merrick said he immediately contacted police and the association’s bank; soon after, detectives launched an investigation and the bank accounts were frozen.
Merrick said he and the board had no prior reason to suspect anything was amiss. The apparent theft, he said, left him “shocked.”
“I’ve been sick to my stomach for a week,” he said Monday night, several hours after news of the arrest was made public by APD.
In a statement about the arrest issued Monday night, the association said it was “dismayed” by Suchan’s actions.
“It is deeply disappointing for a close-knit community such as Eagle River to experience such fraud and deceit by one of our own,” reads the statement. “MHA vows to remain a premium hockey program dedicated to developing young players both on and off the ice. Our amazing group of coaches, volunteers, parents and players will demonstrate our resiliency by moving forward despite the current situation. Additional quality controls have been instituted to assure confidence in our future fiscal oversight.”
According to the association’s website, the Mustang Hockey Association offers both house (recreational) and competitive hockey programs for kids ranging from 4 to 18 years of age. The association was formed in 1983 in advance of the opening of the new Fire Lake Recreational Center (since renamed the Harry McDonald Center) in Eagle River. The league’s first full season was during the winter of 1984-85, the first year the McDonald Center was in operation.
“The goal of this league is to teach basic skills and develop each player to his/her maximum potential,” reads a mission statement on the website.
According to the site, the group’s board held its most recent monthly meeting June 14 in Eagle River. As of Monday night, no minutes had been posted from that meeting.
However, the website does include minutes from the May 5, 2016 meeting at the McDonald Center in Eagle River that provide a window into its finances.
According to those documents, a treasurer’s report filed by Jenn Kerr (according to police spokeswoman Renee Oistad, Suchan and Kerr are the same person. “She got married recently,” Oistad said Monday night) stated the association had approximately $155,000 in the bank at that time.
“(W)e started the year with about 149,000 dollars and ended the year with about 155,000,” read the minutes.
Merrick said the association spends hundreds of thousands of dollars annually. Ice time alone, he said, costs in the neighborhood of $250,000 per year.
“Hockey’s an extremely expensive sport,” he said.
He said the theft appeared to have taken place for much of Suchan’s roughly three-year tenure as treasurer.
“It was over a long period of time, it wasn’t something that came out overnight,” he said.
He said the association will be able to weather the current storm, and vowed the theft won’t impact MHA’s on-ice operations.
“We’re going to continue to move forward as an organization,” he said.
Merrick said he’s been working closely with police since the funds were discovered missing, and has contacted accounting firms for advice on how to better handle the association’s finances. In the coming weeks and months, he said, the association will continue to closely examine its policies and procedures.
“There’s lots of things we’re going to look into and we’re going to discuss,” he said.
He said the association will seek “full restitution” for the amount allegedly stolen by Suchan, who could not be reached for comment.
On Monday evening, Jennifer Kerr was still listed as the MHA treasurer. A photo of her remained active on the site, but an email sent to the address associated with the group’s treasurer bounced back as undeliverable. By Tuesday, her photo had been removed from the page, with TBD listed as the group’s treasurer.
Merrick said he hopes the incident doesn’t reflect badly on “one heck of a group” of volunteers who keep the association running.
“One bad apple’s not going to spoil all the good things that we’ve done to create hockey players and to help create great members of this community,” he said.
Contact Matt Tunseth at editor@alaskastar.com.
Embezzlement/Theft case (Anchorage - 28 Assets, Inc.)
Anchorage bookkeeper embezzles $90K from nonprofit
Author: Jerzy Shedlock
Updated: September 27, 2016
Published June 13, 2013
An Anchorage bookkeeper who worked for a nonprofit that provides support to people with disabilities has been charged with multiple felony counts after embezzling more than $90,000.
Ruby M. Brooks stole $93,603 from multiple accounts belonging to 28 Assets, Inc. clients, according to an Anchorage Police Department press release. She allegedly purchased an Old Navy credit card with the money and used the money to fund a Las Vegas vacation.
In late April, an Assets, Inc. representative filed a report with the police department about a suspected employee theft of an unknown sum of money from multiple client accounts. A detective looked into the thefts and determined Brooks was the culprit. The 35 year old allegedly had been running the scheme since late 2011.
Assets, Inc. employs more than 400 employees; 42 percent are disabled. Their workplaces include Providence Hospital and the Alaska Court System.
Susan Newsome, the Assets employee, reported the thefts to Anchorage Police only a day after discovering that a business was not receiving compensation from one of the accounts Brooks was charged with managing. The nonprofit handles 29 bank accounts for clients who require care.
When confronted, Brooks told Newsome she had engaged in "gross mismanagement of funds." Brooks went as far as writing and signing three pages in which she admitted to stealing the money for the last year to "cover expenses" -- and that she knew it was illegal, according to an affidavit. The confession was handed off to a detective.
Her expenses allegedly kept her from paying one client's rent for four months, the affidavit says. Assets, Inc. also received a letter from a separate condo association lawyer stating that a client was $2,200 behind on condo dues.
An investigation and audit of a client's financial records revealed Brooks withdrew funds to cover personal expenses. It turned out she did so with multiple accounts. In an attempt to conceal the thefts, she took more money from alternative accounts to cover the previously withdrawn funds, according to Anchorage Police.
On more than one occasion, Brooks obtained credit cards using clients' names; she would use one of the cards as another way to cover funds removed from the dwindling accounts, according to Anchorage Police. Brooks' indictment alleges she purchased an Old Navy credit card with a client's name and charged items with the card. Newsome told investigators her company had received a credit card bill for another client totaling $672. She described the client as "high functioning," and decided to give him a call; he said he did not have a credit card.
Following investigators' original tally of about $53,000, officers went to speak with Brooks; they wanted to know why she had stolen the money. She was short on funds, she told the detectives. She thought she could replenish the money, she continued, but it got to a point where she "just kept doing it," the affidavit says. And eventually, Brooks said she lost track of what accounts she took money from.
Further investigation revealed the sum was closer to $90,000.
Brooks credited her expenses to family medical expenses, the affidavit says. But she also admitted to a Las Vegas trip during which she accessed clients' accounts when money was low. She paid for the trip with her dividend, she said.
For her alleged embezzlement, Brooks faces nine felonies and two misdemeanors. The felonies include first-degree theft, scheme to defraud and first-degree criminal impersonation, among other charges, according to court records.
Embezzlement/Theft case (Tatitlek Native Village)
Department of Justice
U.S. Attorney’s Office
District of Alaska
FOR IMMEDIATE RELEASE
Tuesday, January 7, 2014
Former President of Tatitlek Native Village Sentenced to 18 Months for Misapplication of Tribal Funds
Lori “Sue” Clum (formerly Johnson), 46, of Anchorage, Alaska, was sentenced today by United States District Court Judge Sharon L. Gleason, to 18 months in prison.
According to Assistant U.S. Attorney Aunnie Steward, Clum was elected as President of the Native Village of Tatitlek, a federally recognized tribe, in October 2007. Clum was voted out of office in April 2008 but refused to accept the results of this election and maintained control of the tribal bank accounts for another year, during which time she misapplied $112,000 of tribal funds for her personal benefit. Clum used the money to gamble, pay personal debts, and purchase a four wheeler among other things. Clum finally relinquished control of the tribal bank accounts after she was arrested for illegal drug possession in March 2009.
In a separate but related matter, Clum confessed judgment in a civil case brought by the Native Village of Tatitlek for a total of $150,000 that she misapplied, which amount included disputed payroll for Clum. Clum was arrested on January 13, 2013, on state charges that she was selling drugs and alcohol in Tatitlek. These charges are still pending.
At sentencing, Judge Gleason noted the importance of deterring this type of conduct in remote communities with fragile economies where fraud like this has an enormous impact, as well as the emotional impact on a small community.
Clum’s brother, James Kramer of Valdez, Alaska, is scheduled for sentencing on January 22, 2014, for his role in accepting $20,000 from Clum. Kramer accepted the money knowing he was not entitled to it, and he failed to file a tax return to include this money as well as other income he had received in 2009.
Ms. Loeffler commends the FBI, IRS Criminal Investigations, and EPA Office of Inspector General, with assistance from the Valdez Police Department, for the investigation of this case.
Embezzlement/Theft Case (Alaska Inter-Tribal Council)
Department of Justice
U.S. Attorney’s Office
District of Alaska
FOR IMMEDIATE RELEASE
Friday, October 23, 2015
Former Finance Director Of Alaska Inter-Tribal Council Sentenced In Federal Court For Theft Of Funds
Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that the former Finance Director of the Alaska Inter-Tribal Council (“AITC”), a non-profit organization which advocates in support of tribal governments throughout Alaska, was sentenced in federal court in Anchorage to five years of probation, with a requirement that he serve 120 days of community confinement, for his theft of funds belonging to the organization. Thomas R. Purcell, 52, of Anchorage, who served as the Finance Director of AITC from January 2008 until February 2009, admitted to stealing or misappropriating approximately $22,270 in AITC funds while he served in that capacity. Purcell was also ordered to pay $22,270 to AITC in restitution, and was fined an additional $15,000 by United States District Judge Sharon L. Gleason.
According to Assistant U.S. Attorney Joseph Bottini, AITC received substantial federal funding in 2008 and 2009 – including a federal grant from the United States Environmental Protection Agency of in excess of a million dollars. As the Finance Director, Purcell was responsible for managing all of AITC=s financial accounts, including account reconciliation, and payroll operations. The investigation established that Purcell was able to steal the funds through an unauthorized salary increase.
Purcell was indicted by a federal grand jury in August 2013 together with co-defendant Steven Osborne, the former Executive Director of AITC. Purcell pled guilty in April 2015 to one count of Theft from an Organization Receiving Federal Funds. Osborne also pled guilty to one count of stealing approximately $145,000 from AITC, and on October 22, 2015, he was sentenced to 21 months in prison by United States District Judge Sharon L. Gleason. Purcell, who had cooperated with the government during the investigation and subsequent prosecution, received a reduced sentence in recognition of his cooperation.
Two individuals associated with AITC addressed the court at Purcell’s sentencing and noted that as a result of the thefts committed by Osborne and Purcell, AITC became ineligible for further federal funding because the organization was considered “high risk”. Without federal funding, AITC was basically rendered a defunct organization, and it remains so today.
Ms. Loeffler commends the U.S. Environmental Protection Agency, Office of Inspector General and the Federal Bureau of Investigation for the investigation of this case.
Embezzlement/Theft Case (Healy Lake Tribe)
Department of Justice
U.S. Attorney’s Office
District of Alaska
FOR IMMEDIATE RELEASE
Friday, February 5, 2016
Former Healy Lake Tribe First Chief And Tribal Administrator Sentenced For Conversion Of Federal Government And Tribal Fund
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a Fairbanks woman was sentenced on Friday, February 5, 2016, in federal court in Fairbanks after being found guilty of converting federal government and tribal funds to her own use.
JoAnn Polston, 60, of Fairbanks, Alaska, was sentenced by U.S. District Judge Ralph R. Beistline to three years’ probation with special conditions including 90 days home confinement and cooperation with representatives of the Healy Lake Tribe concerning whereabouts and disposition of tribal funds, and payment of restitution of $4,577.61 to the Bureau of Indian Affairs and $102,860.20 to the Healy Lake Tribe. Polston had pled guilty in September 2015.
Assistant U.S. Attorney Yvonne Lamoureux, who prosecuted the case, noted that according to filings with the court, between 2009 and 2012, Polston knowingly converted to her own use money belonging to the Bureau of Indian Affairs and the Healy Lake Tribe. Specifically, Polston, as the First Chief and Tribal Administrator for the Healy Lake Tribe, abused her position of trust to write herself checks and transfer money from the Tribe’s bank accounts to her personal bank account. Polston also submitted and received per diem payments from the BIA in the amount of $4,577.61 to which she was not entitled because Polston had previously paid herself per diem payments from the Healy Lake Tribe’s bank accounts for the same trips. Between August 2009 and May 2012, Polston knowingly converted the Tribe’s money to her own use by writing herself checks and transferring money into her account in the amount of at least $10,914.20. Between May 2009 and June 2013, Polston also paid herself $91,946.00 without backup documentation, above and beyond her salary payments or other authorized payments.
In sentencing Polston, Judge Beistline noted that misuse of federal funds jeopardizes other native and rural communities that receive federal funds.
“The results of this prosecution reflect the Department of Interior Office of Inspector General’s commitment to pursue fraud involving the Department’s programs and its commitment to its trust responsibility to Native Americans,” said U.S. Department of the Interior Office of Inspector General Special Agent in Charge David House. “Public corruption in Native American communities is especially egregious because it usually comes at the expense of vital tribal programs intended for the benefit of the entire tribal community.”
Ms. Loeffler commends the Federal Bureau of Investigation and the Department of the Interior Office of Inspector General for conducting the investigation leading to the successful prosecution of Polston.
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