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NATIONAL ASSOCIATION OF STATE CHARITY OFFICIALS (NASCO) ANNUAL REPORT ON STATE ENFORCEMENT ANDREGULATION

NASCO is pleased to provide fellow regulators and the public with the 2022-2023 Report on State Enforcement and Regulation. The report consists of a sample of cases in which NASCO members were involved in Deceptive Solicitation, Nonprofit Governance
and Trust and Estates actions. The report also includes outreach efforts and published guidance issued in 2022 and 2023.

2022-2023 Annual Report

Questions regarding particular cases, actions or issues should be directed to the relevant state. Contact information for each state can be found at www.nasconet.org.

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Jackson County Charity Embezzlement Case Highlights Need for Nonprofit Oversight

A Wellston woman who stole charitable funds from a local booster club was sentenced Wednesday to one year of community control and will repay the more than $9,000 that she took, Ohio Attorney General Dave Yost and Jackson County Prosecutor Randy Dupree announced.

Melanie Stanley had originally faced a fourth-degree felony charge of grand theft for misusing funds from the Wellston City School District’s volleyball booster program, The Spike Club (formerly the Wellston Match Point Club). In early June, though, Judge Christopher Regan of Jackson County Common Pleas Court accepted Stanley’s guilty plea to a lesser charge of misdemeanor theft after Stanley agreed to pay back the stolen money.

“She stole from the team and abused the trust of parents,” AG Yost said. “No matter how big or small the organization, thieves looking to set themselves up with charitable funds need to know that they’re playing a losing game.”

The Attorney General’s Charitable Law Section helped the Wellston Police Department investigate the case after booster club volunteers reported discrepancies in the nonprofit’s accounts to the police.

The volunteers said Stanley was the only officer with access to the accounts, and that she had used the charitable funds to make large personal purchases and issue checks to family members.

“Just as good teamwork can lead to victory, keen oversight can assure charitable dollars serve their intended purpose,” said Jackson County Prosecutor Randy Dupree. “We’re grateful for the collaborative investigation to put the money back in the hands of the booster club where it belongs.”      

Attorney General Yost said the case highlights the need for oversight in the charitable sector, noting how a passive board of directors and poor internal controls can spell disaster for a charity.

Coinciding with the adjudication of the Jackson County case, Yost also announced today that four new web-based trainings are available under the office’s Charitable University platform (Charitable U.), which launched in January:

  • Governmental Filings and Recordkeeping
  • Board Policy Considerations
  • Avoiding Theft and Internal Controls
  • Charitable Gaming

Charitable leaders who complete trainings in each of the four Charitable U. “pillars” will have their name and organization listed on the AGO website as a way to salute their efforts. They also receive a completion certificate that can be shared with funders as a way to reinforce their organization’s commitment to sound policies of board governance.

Charitable U. trainings are required for nonprofit agencies applying for grants from the office.

The Ohio Attorney General plays a critical role in the charitable realm as the state officer charged with protecting and regulating the sector. The office’s Charitable Law Section regularly holds trainings and conducts outreach to educate Ohio’s 60,000+ nonprofits on their legal obligations. 

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Former Columbus Zoo Executives Indicted for Theft of More Than $2 Million

Three former executives of the Columbus Zoo and Aquarium were indicted today for their roles in a scheme to defraud the zoo of more than $2.29 million and use the money for personal benefits, Ohio Attorney General Dave Yost announced today.

“I’m confident that when the allegations are heard in the court of law, the jury will agree that these former executives of the Columbus Zoo extorted, conspired, bribed and stole over $2 million in public funds for their own benefits,” Yost said. “In simple terms, the bank hired the robbers to work security.”

Former Chief Executive Officer Tom Stalf and former Marketing Director Pete Fingerhut are accused of operating a criminal enterprise to hijack the zoo’s purse strings and colluding to conceal their thievery. Also indicted was former Chief Financial Officer Greg Bell, who is alleged to have become ensnared in the wrongdoing.

The indictment alleges that the former executives manipulated credit-card and check authorization forms for more than a decade, using the nonprofit’s public funds for personal use. The Columbus Zoo receives about $19 million in taxes annually from Franklin County residents.

The stolen money was spent on lavish non-zoo related items, including suites and tickets to concerts and sporting events; golf memberships; trips to multiple states and foreign countries; meals, beverages and alcohol; and motor vehicles.

An investigation conducted by the attorney general’s Charitable Law and Antitrust sections, along with the Ohio Auditor’s Office, found that the criminal enterprise not only improperly expensed goods but also bartered, bribed and extorted zoo vendors for goods and services.

In one instance, zoo tickets were exchanged for tickets to Game 6 of the 2016 World Series. On another occasion, Fingerhut is accused of threatening harm to a vendor’s business opportunities with the zoo unless he was paid large sums of cash.

Stalf, Fingerhut and Bell allegedly attempted to conceal their criminal activities by knowingly signing financial authorization forms. In subsequent years, Stalf and Fingerhut filed their state and federal taxes without acknowledging the financial benefits obtained from the criminal enterprise.   

The indictment was filed today in Delaware County Common Pleas Court, as the zoo is located in Delaware County and much of the criminal conduct found by the grand jury took place at the zoo business office.

As the investigation unfolded, Delaware County Prosecuting Attorney Melissa Schiffel appointed the Attorney General’s Office as special prosecutor in the matter, with Senior Assistant Attorney General Dan Kasaris becoming the lead prosecutor. Marissa Gibson and Matt Klapheke, investigators with the Ohio Auditor’s Office, assisted in the case.

“The Columbus Zoo is a jewel and I hope that this investigation will ensure that the zoo will exist for many years to come,” Prosecutor Shiffel said. “Thank you to the Delaware County grand jurors who listened to countless hours of testimony and evidence and returned the indictment that was filed today.”