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Statement from RIAG and RIDOH regarding status of The Centurion Foundation HCA application

Today the Attorney General and the Rhode Island Department of Health, the two state regulators empowered to oversee hospital conversions in Rhode Island, issued the following statement regarding the status of an initial submission by Prospect Medical Holdings and The Centurion Foundation to state regulators pursuant to the Hospital Conversions Act (HCA). This submission was related to a proposed transaction involving CharterCARE, which includes Roger Williams Medical Center and Our Lady of Fatima Hospital.

“Following review of a submission from Prospect Medical Holdings and The Centurion Foundation delivered on May 26, 2023, regarding a proposed hospital conversion, the Attorney General and the Department of Health determined that the materials submitted do not constitute an Initial Application as required under the Hospital Conversions Act. The materials do not respond to the most recent, publicly available application form and do not include responses to transaction-specific questions.

The parties have been given notice by the Attorney General and the Department of Health that the submitted materials do not constitute an Initial Application. Under the HCA, transacting parties seeking the transfer of ownership of a hospital must complete an Initial Application and file it with both the Office of the Attorney General and the Rhode Island Department of Health, who will determine whether the application is complete. Once the application is deemed complete, the Attorney General and the Rhode Island Department of Health will then initiate a review and issue a decision on the application for transfer of ownership as to whether all statutory criteria are met and the public’s interest is protected.”

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SETTLEMENT REACHED WITH HUMANE SOCIETY OF HARRISBURG AREA REGARDING SUBSTANDARD RECORD-KEEPING AND REPORTING PRACTICES

Attorney General Michelle Henry today announced a settlement with the Humane Society of Harrisburg Area regarding the organization’s bookkeeping methods, specifically, a lack of internal oversight of purchases and reimbursements.

Humane Society of Harrisburg Area is a charitable organization and therefore is required to maintain record-keeping standards. The Office of Attorney General’s Assurance of Voluntary Compliance, or settlement, requires the organization to maintain those standards and pay $45,055.25 to the Office of Attorney General. This amount includes a $5,000 civil penalty with the remainder being collected to recoup investigative costs. The settlement also requires that the Humane Society of Harrisburg Area file amended IRS forms 990 for 2021, 2022, and going forward.

“It is essential that Pennsylvania’s non-profit and charitable organizations keep accurate records so we can ensure every aspect of the Charities Act and Nonprofit Corporation Law is being followed,” said Attorney General Henry. “It is part of my constitutional mandate as Attorney General to verify that a level of public transparency is maintained by these organizations.”

The investigation focused solely on the Humane Society of Harrisburg Area’s record-keeping as required by the Charities Act and Nonprofit Corporation Law. The investigation produced no evidence of abuse or mistreatment of animals and no such allegations are contained within the settlement.

Since being contacted by the Office of Attorney General, the organization has already taken steps to improve financial control procedures and keep records up to standard, including contracting with an outside auditor and enforcement of credit card and check-writing policies.

The settlement arose from an investigation into the Humane Society of Harrisburg Area’s failure to disclose the Executive Director’s housing stipend in the organization’s required yearly reporting. Further violations by the Humane Society include a lack of appropriate internal oversight with regard to the use of business credit cards, purchasing, travel, and reimbursement policies.

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AG Campbell Amends Filing Requirements for Small Charities and Requires Online Filing for All Charities in Massachusetts

Charities with Annual Gross Support and Revenue of $25,000 or Less No Longer Required to Submit Federal Form 990 to AGO; All Charity Registrations and Annual Filings Must Be Submitted Online Starting September 1, 2023

In an effort to ease the administrative burden on smaller charities, effective immediately Attorney General Andrea Joy Campbell will no longer require nonprofit organizations with gross support and revenue of $25,000 or less to submit a Federal Form 990 as part of their annual filings and disclosures. AG Campbell hopes this change will help to facilitate compliance and transparency from smaller, often volunteer-run organizations. This revision also places Massachusetts in closer alignment with other states that require public charities to submit annual financial filings and allows AG Campbell’s Non-Profit Organizations/Public Charities Division and the public to continue to access the important supplemental information from charities with gross support and revenue over $25,000.

“Our vibrant nonprofit community works hard every day to support those in need and improve the quality of life here in Massachusetts,” said AG Campbell. “We’re excited to make it easier and more efficient for charities to fulfill their regulatory obligations, which ensure transparency to the public about their operations while allowing those organizations to spend more time on their critical missions.”

“This is a big step forward,” said Jim Klocke, CEO of the Massachusetts Nonprofit Network. “It will give small non-profits a clear, manageable path for reporting and transparency, without overburdening them. It will be particularly helpful to the smallest nonprofits, and startup nonprofits, who come from every part of Massachusetts and every segment of our communities. We appreciate the Attorney General’s work on this issue.”

In an additional effort to promote efficiency in the completion and processing of charities filings, effective September 1, 2023, charities will need to fulfill their regulatory filing obligations to the AG’s Office using the online Charity Portal, launched in 2022; the Office will no longer accept paper submissions. This online filing mandate provides a more efficient way for charities to comply with annual filing obligations and enables the Office to more quickly make the information available to the public on the Office’s website.

To support the sector through this transition, the Non-Profit Organizations/Public Charities Division will run several in-person filing clinics at locations around the Commonwealth and will host monthly online webinars to demonstrate the use of the Charity Portal and respond live to questions from users about the filing process. These learning opportunities are in addition to the live hotline, in-Portal support, and instructional materials and videos already available on the AG’s website. For more details about these training materials or to learn more about the webinars and filing clinics and sign up to attend, please visit the AG’s website.

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Multinational Non-Governmental Organizations Potentially Exploited in Aftermath of Earthquakes Affecting Turkey and Syria

SUMMARY

The FBI’s Counterterrorism Division assesses that Foreign Terrorist Organizations (FTOs), including ISIS and al-Qa’ida, continue to exploit non-governmental organizations (NGOs) and charities by diverting funds to subsidize FTO operations. The earthquake that struck Turkey and Syria on 6 February 2023 has resulted in more than 50,000 deaths and has been described as one of the strongest earthquakes to hit the region in the past century. Any diversion of funds intended to aid earthquake victims will exacerbate the existing humanitarian crisis in the region. Prior to the earthquakes, an estimated 4.1 million people in northwestern Syria alone — over 90 percent of the area’s population — already depended on humanitarian assistance following a decade of civil war in the country. FTOs operating in the region will attempt to capitalize on this tragedy in order to raise funds for their own violent objectives.

THREAT

FTOs and their supporters have been known to establish fraudulent charities or engage in fraudulent fundraising, often on social media platforms, to target unwitting individuals into providing funds to the FTOs. FTOs have also targeted established charities and NGOs to funnel funds or humanitarian relief items.

  • An al-Shabaab finance leader, who was designated as a Specially Designated Global Terrorist in 2015, was collecting money from NGOs as of early 2022.
  • An Australian citizen was indicted in 2017 in the United States for providing material support to a terrorist organization used a fraudulent charity called “Orphans Children and Human Care Foundation.” The charity claimed to be working in Syria to assist orphans, children, and the Syrian people by supplying food, water, medicines, and other commodities. One of the individuals who often appeared in the charity’s social media posts was later identified as a deceased member of al-Qa’ida’s then Syrian affiliate, Jabhat al-Nusra.
  • ISIS-Khorasan (ISIS-K) set up a fraudulent charity called “Nejaat Social Welfare Organization” to facilitate the transfer of funds to, and support the activities of, ISIS-K in 2016. Nejaat collected donations from individuals in Qatar, the United Arab Emirates, Iraq, and other Middle Eastern countries and transferred money via the global banking system to Asia, where ISIS-K used the Nejaat funds to recruit ISIS-K fighters in Kabul, Afghanistan.

RECOMMENDATIONS

While donating to NGOs and charities provides a means to help those in need, law enforcement officials recommend individuals consider the following mitigation strategies to avoid inadvertently providing funds to terrorist organizations:

  • Verify the legitimacy of the NGO and charity soliciting funds;
  • Look for secure site indicators, such as URLs beginning with “https” or a lock symbol. URLs beginning with “http” or that lack a lock symbol at the beginning of a URL could indicate an unsecure site.
  • Do not share personal account information or passwords with any groups soliciting funds; and
  • Do not click on links from unknown sources.

If you become aware of FTOs exploiting NGOs or charities to divert funds in support of terrorist operations or other nefarious activities, please contact your local FBI Field Office. Individuals associated with the above activities could be charged with violations including, but not limited to, 18 US Code § 2339(b), 18 U.S.C. § 1344, 18 U.S.C. § 1956, for provision and attempted provision of material support or resources to foreign terrorist organizations, bank fraud, or money laundering.

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NASCO Conference Save the Date!

The annual NAAG NASCO Conference will be held October 11 and 12, 2023 at (wait for it) – AT YOUR DESK!

We are holding a virtual conference this year and we hope that means more of you than ever will be able to join. Current plans are for October 11 as the public day and October 12 for regulators. The NASCO annual meeting will likely be held separately, during the October monthly charity call.

Looking forward to seeing you then…..