Sandy Relief Group Sued For Fraud

The founders of a Hurricane Sandy relief group have been sued by the state of New Jersey for allegedly diverting funds for personal use, while victims of the storm supposedly received little money.

John Sandberg and Christina Terracino founded the Hurricane Sandy Relief Foundation (HSRF) in the aftermath of the deadly super storm to help those affected by it. On Thursday, the state Attorney General's Office and the New Jersey Department of Consumer Affairs (DCA) filed a lawsuit against the two founders and the Foundation. According to a report in The Asbury Park Press, the suit cites numerous violations of NJ's charity code, including allegedly diverting $17,000 in donated funds to, among other things, pay credit card bills and shop online.

“This organization told the state it does not pay its executives, but our investigators found a paper trail reflecting thousands of dollars being transferred into the individual defendants’ personal bank accounts,” said Attorney General Jeffrey S. Chiesa in a prepared statement. “Meanwhile, less than one percent [$1,650] of the money raised, has allegedly been paid out to help the victims of Sandy.”

According to the Foundation's website, almost $631,000 in cash donations were raised. The state's complaint alleges that nearly $39,000 of that money remains missing.

Other accusations against Sandberg and Terracino include, allegedly:

• Misleading donors by falsely claiming the Foundation is a tax-exempt 501(c)(3) charity; and,
• Co-opting the name of the Hurricane Sandy New Jersey Relief Fund, which was founded by NJ First Lady Mary Pat Christie.

You can read the full story in The Asbury Park Press.

D.C. Nonprofit Declines To Say How It Spent Money

An embattled D.C. nonprofit reported receiving $25 million in a recently filed Internal Revenue Service (IRS) report, but decline to say how it spent all of that money.

The D.C. Children & Youth Investment Corp., which was involved in a theft scandal which sent former councilman Harry Thomas Jr., to prison, also did not identify any grantees in its annual tax filing with the IRS, according to a report in The Washington Times. While the Trust did report $25.7 million in funding for the period spanning Oct. 2010 to Sept. 2011, sections of the report for expenditures -- including compensation -- were left blank.

The Trust's senior director of finance, Earl Thomas, told The Times that the organization plans to file an amended report with the IRS as soon as outside auditors finish reviewing two years finances. In a Jan. 29 post on this blog, it was reported that those audits would be released in 30 days.

The nonprofit has been trying to get back on track after the bad publicity from the Thomas Jr., situation. The former D.C. councilman was sentenced to three years in federal prison after pleading guilty to using grant money meant for local children for personal uses, including trips, clothes, a new car, and shoes.

The Trust reported a deficit of almost $3 million last year and, without the completed audits and the incomplete IRS filing, it is unclear whether its finances have improved or worsened.

You can read the full story in The Washington Times.

New Foundation To Oversee Newtown Fund

A new foundation has been formed to oversee the more than $9 million that has been donated to the Newtown Fund since the shootings took place Dec. 14.

Soon after the tragic shootings at Sandy Hook Elementary School in Newtown, Conn., the United Way of Western Connecticut and Newtown Savings Banks set up a fund for donations. The organization, however, did not want to oversee the money, so a transition team was formed to create a foundation that would distribute the funds for charitable purposes.

According to The Hartford Courant, the organization, known as the Newtown-Sandy Hook Community Foundation Inc., took two months to create. During that period, members of the team drafted bylaws for the foundation. The transition team officially transferred authority to the foundation, which has former U.S. Sen. Joseph Lieberman as an unpaid advisor. Lieberman met with families of victims on Wednesday to explain how the organization will operate, and to solicit suggestions.

While the foundation is open for business, it is not yet ready to begin distributing money. The board will first consider requests and suggestions that will be vetted by a "distribution committee." According to Newtown Selectman Will Rodgers, who headed the efforts to form the foundation, there is a possibility there will be more than one distribution committee.

Rodgers told The Courant that there is not yet a timetable for when the first funds will be distributed.

You can read the full story in The Hartford Courant.

IRS Bought To Court Over 'Dark Money' Organization

The Internal Revenue Service (IRS) is being sued by a former congressional candidate who alleges that the agency wrongly allowed a so-called "dark money" political organization to operate as a tax-exempt entity.

Dr. David Gill is a Democrat who unsuccessfully ran to represent Illinois' 13th district in the 2012 elections. According to a report on The Huffington Post, Gill and the Citizens for Responsibility and Ethics in Washington (CREW) are arguing that the IRS should not have allowed the American Action Network (AAN) to spend $2.6 million in ads against Gill while at the same time enjoying tax-exempt status.

Gill and CREW allege that the agency misinterpreted tax laws when it released regulations for social welfare nonprofits. IRS guidelines state that these organizations must be "primarily" focused on social welfare, while the federal statute states they must be "exclusively" focused on it.

"It is offensive that the IRS turns a blind eye to reality and allows partisan political groups to seek refuge in a provision of the IRS code that is meant to govern organizations such as volunteer firefighter companies and homeowner organizations," Dr. Gill said in a statement.

Dr. Gill and CREW filed the civil lawsuit Tuesday under the provisions of the Administrative Procedure Act, which allows those who have suffered "sufficient harm" to file suit against the IRS. Gill can certainly claim to have suffered, as he believes that his close defeat -- he only lost by 1,002 votes to Republican Rodney Davis -- was due to "misinformation" spread about his support of Medicare in AAN's ads. One of those spots claimed that Gill would eliminate Medicare and replace it with single-payer healthcare.

AAN was the only 501(c)(4) nonprofit to spend significant money in the 13th district campaign.

You can read the full story on The Huffington Post.

Featured Nonprofit Job: CEO/Head Of School

The Creative Learning Academy of Pensacola (CLA) is looking to hire a CEO/Head of School. Interested? Read on for more details.

Beginning with the 2013-2014 school year, this individual will be in charge of all aspects of the Schoool. Candidates must have a history of significant business leadership and a proven track record of growth.  Experience at an accredited independent school preferred, but not required.

Other requirements include:

• Exceptional communication skills, clear vision and strong management/leadership skills;
• the ability to further the organization’s mission while developing the human resources necessary to achieve maximum potential;
• Technologically proficient, with a broad knowledge of best business practices; and,
• Must be an active, visible part of the community as well as the school, inspiring students and teachers alike in a hands-on way.

You can find out more information by visiting our career center.