Tag: Charity Fraud

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IRS joins effort to fight charity fraud during international recognition week

The Internal Revenue Service announced its continued support by joining international efforts to fight fraud during Charity Fraud Awareness Week, October 17-21.

The IRS partners in this effort as part of its ongoing commitment to fight fraud against charities, businesses and individuals. It’s estimated that charitable organizations will lose 5% of their revenue each year to fraud, according to the Fraud Advisory Panel, a UK-based organization leading the effort by organizing this week of awareness. Experts say cybercrime is on the rise, including attacks on charities, their supporters and beneficiaries.

Charities, regulators, agencies, law enforcement and other not-for-profit stakeholders around the world are working together to raise awareness about fraud and cybercrime that affects charities. These efforts resulted in seven days when supporters actively discuss fraud, share best practices and offer helpful resources.

How to verify a charity

“We’d like to thank the Fraud Advisory Panel for reminding donors to remain vigilant,” said IRS Director of Exempt Organizations & Government Entities Rob Malone. “Unfortunately, natural disasters, like Hurricane Ian, provide an opportunity for charity scammers to take advantage of genuine efforts to help. I urge donors to verify a charity’s tax-exempt status at Tax Exempt Organization Search before donating goods, services or money.”

Fake Charities

In addition to cybercrime targeting charities, criminals who create fake charities are also a problem. Fake charities are part of the IRS’s Dirty Dozen tax scams for 2022. As noted above, taxpayers should verify legitimate and qualified charities using the Tax Exempt Organization Search tool on IRS.gov. Donors should never feel pressured to give immediately.

Links to more information

A special website was created for Charity Fraud Awareness Week and features information to help partners, charities and other tax-exempt organizations and non-profits find:

  • Details about the awareness week
  • Free resources
  • A fraud pledge for organizations
  • A listing of webinars and other events

Those encouraged to participate in the week’s activities include:

  • Trustees, staff and volunteers from charities, non-government organizations and non-profits
  • Organizations that represent the interests of non-profits
  • Accountants, auditors and those acting as professional advisors to non-profits
  • Regulators, law enforcement officials and policymakers working to safeguard non-profits
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NASCO Drafts Letter to FTC Regarding Impersonation Scams

On March 22, 2022 the NASCO Board responded to the FTC’s Advance Notice of Proposed Rulemaking (“ANPR”) by submitting the NASCO letter .  The FTC has stated that their ANPR is to combat government and business impersonation fraud and is intended to allow the FTC to seek strong relief for consumers in cases involving imposter scams.  The NASCO letter specifically requests that the FTC consider impersonation of charitable organizations and causes in its rulemaking.

https://www.nasconet.org/wp-content/uploads/2022/02/NASCO-Letter-to-FTC-2022-02-22-002.pdf

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Fraudulent charity shut down in Kansas, ordered to pay damages

A Georgia man and his Kansas charity have been banned from doing business in Kansas and ordered to pay more than $11,000 in damages for violating the Kansas Charitable Organizations and Solicitations Act, Attorney General Derek Schmidt said today.

Steven Beck of Ludowici, Georgia, and A Ride for the Wounded, Inc., a Kansas charity, were permanently banned from doing business in Kansas. Shawnee County District Court Judge Thomas Luedke this week approved a default judgment after Beck and the charity failed to respond to a lawsuit filed by Schmidt’s office.

Luedke ordered Beck and the charity to pay $11,029.05 for funds that were used for personal expenses in violation of the Kansas Charitable Organizations and Solicitations Act.

Schmidt urged Kansans to do their homework when donating to charities and offered the following tips to keep in mind when making charitable contributions:

  • Ask for written information, including how much of the money raised is actually used for charitable purposes and how much will end up in the hands of the professional fundraiser.
  • Be careful with telemarketers requesting contributions – oftentimes the telemarketer keeps a substantial portion of the donation.
  • Do not be pressured into making a contribution or pledge.
  • Do not feel obligated to send a donation to charities that send token gifts such as key chains, greeting cards, mailing labels, etc.
  • Make certain the charitable organization actually serves the need it claims to serve.
  • Ask for financial statements of the organization to determine who will benefit from the donations.
  • Make a personal giving plan and support well established charities on your terms, not in response to marketing solicitations.
  • Check out the charity at www.kscharitycheck.org to assess whether it is registered to solicit in Kansas and to see important aspects of its financial filings, including how much of any money you give will be spent on the charity’s overhead expenses rather than going to support the charitable purpose, such as disaster-relief efforts. However, note that some charities are exempt by law from registration.
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Missouri Attorney General Schmitt Announces Sentencing of Angela McMunn for Fraud Related to “Shop with a Cop”

Attorney General Eric Schmitt announced that on February 9, 2021, Angela McMunn pled guilty in the Circuit Court of Jefferson County to two class C felony counts of Receiving Stolen Property, one class D felony count of Receiving Stolen Property, and one class D felony count of Unlawful Merchandising Practices.

“Stealing from law enforcement, including Officer Michael Flamion, who put his life on the line in the line of duty, is beyond the pale,” said Attorney General Schmitt. “I’m grateful for the work that Sheriff Dave Marshak and the Jefferson County Sheriff’s Office did to investigate this case, and I’m pleased that my Office was able to hold McMunn accountable for her actions.”

While serving as the president of Shop with a Cop, a non-profit organization founded to assist underprivileged children, McMunn used a total of $18,398.07 from the organization’s bank account for personal purchases. Further, McMunn fraudulently solicited funds for Officer Michael Flamion after he was shot and paralyzed in the line of duty. While McMunn advertised all proceeds would go to Officer Flamion, she used $6,498.00 from the proceeds collected for personal purchases.

As a result of McMunn’s plea of guilty to all four counts, she was sentenced to four years in the Missouri Department of Corrections with the execution of the sentence suspended, and placed on 5 years of supervised probation with various conditions of probation including an order to pay a total of $24,886.07 in restitution to Jefferson County Shop with a Cop and Officer Flamion.

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NASCO Joins International Charity Fraud Awareness Week, October 19-23

NASCO is joining an international coalition of regulators, law enforcement agencies, charities, nonprofit associations and the Federal Trade Commission to announce the third annual International Charity Fraud Awareness Week (ICFAW), a coordinated international social media campaign to help charities and consumers avoid fraud and promote wise giving. The ICFAW Charity Fraud Hub features helpful documents, free tutorials, videos, case studies and on-demand webinars, including, ‘COVID-19 and charity fraud: what to watch out for and how to stay safe.’

Participants will share education tips and resources on Twitter, Instagram and Facebook using #charityfraudout and #charityfraudout2020