Charity Fraud Essay

In December of 2013, a man was arrested for taking part in a phishing scheme. He was sending out fake emails to students that attended colleges around the U.K. The emails sent them to a site where they were supposedly supposed to update their student loans. What they didn’t know, is that excessive quantities of money were being taken from

Phar-Mor, Inc was a thriving discount grocery store in the late 1980’s. Phar-Mor was moving product quickly but profit margins were not significant enough to pay the bills. By the early 1990’s, Phar-Mor declared bankruptcy due to fraudulent financial reporting and misappropriation of assets, making it one of the largest frauds in U.S. history. Below, we will use auditing standard AU 316.85 Appendix A in conjunction with the video “How to Steal $500 million” to analyze how incentives/pressures, opportunities, and attitudes/rationalizations allowed for fraud to start and continue at Phar-Mor.

Numerous accusations on the mismanagements of volunteers and donated funds didn't end with 9/11, but escalated following Hurricane’s Katrina and Rita. When the overwhelming numbers of donations specifically received for the relief efforts of 9/11, the executives made the wrong choice by going against donator’s wishes of how to use those funds. Also, the ARC didn’t update their donation system and was once again bogged down by the overpowering donations that poured in for Hurricane’s Katrina and Rita. On top of all that the ARC failed to get a grip on the financial disasters at its local chapters - unscreened volunteers walked away with ATM cards loaded with donated funds and some manager’s padded their own bank accounts with fundraiser donations (Holguin). For an organization that is supposed to help the country in disaster relief, the ARC has added monetary complications as the icing on the cake.

In the scenario given, “Bob” served in many positions within a nonprofit over a three year period of time and he stole $93,000 in a variety of ways. In a small nonprofit this might be a large percentage of their operating expenses. It could have an enormous impact on the nonprofit staying in operation as well as those who are served in the community. First we should address what the organization could have done to detect the theft earlier and areas the organization can prevent fraud. Next we will look at implementing safeguards and checks and balances to prevent future occurrences. And Finally, we will address a public relations campaign that will regain the trust of donors and the community.

Fraud is a problem that nonprofits must be prepared to prevent within their financial departments. Embezzlements and financial statement fraud can destroy the financial health of a nonprofit organization and undermine the organization’s mission. Skimming is particularly difficult to identify because the money is often taken off incoming funds before the donations are ever annotated or accounted for (Zack & De Armond, 2015). However, these financial woes can be easily avoided. Nonprofit Quarterly identifies the issue of financial fraud as a “people problem” (Zack et al, 2015). Financial departments within corporations are required to follow strict laws and regulations that are not required to be followed by nonprofit organizations. The Sarbanes-Oxley

(TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.

In New York after 1815, there seemed to be a flood of individuals that stormed into the city walls. The spread of a more urban area and a large numbers of immigrants that stormed into New York created a dynamic of both benefits and downfalls for the government of New York. The force that was coming for workers provided employers extremely cheap day workers, with the belief that the exponential growth of pauperism represented an unnecessary and eradicable evil” (pg. 577). Associations were formed for problems across the board, “to assist widows and orphans, immigrants and Negroes, debtors and prisoners, aged females and young prostitute". In January of 1805, there was a report of 10,000 residents that were on some form of charity in New York

Lesley Boone once said, “We are a country that prides itself on power and wealth, yet there are millions of children who go hungry every day” (Johnson, p.38). When people think of world issues, many do not consider America’s stand point on the ordeal. They are unable to fully comprehend the growing lack of jobs, poverty, hunger, poor health care, and meager education that takes place across the nation. American charity foundations are often eager to jump to the rescue of other countries, but what about the detrimental issues that occur and worsen here every day? In the past, the majority of organizations are predominantly directed at foreign countries; helping places such as Ethiopia, India, Somalia, etc. While here, poverty and debt are increasing by surmountable amounts. Charities for other regions are beneficial, but shouldn’t people here be first priority? Especially considering the majority of our problems have the potential to be easily fixed. Also speculate on what will happen when we have nothing left to give. If the United States does not soon take this into deliberation, it could be hazardous and irreversible to the American society. Charities need to start focusing more on America before it’s too late. When deciding where America’s charitable hands should go, many things need to be taken into consideration such as; charities outside of the U.S.,

Many phishing scams registered that caused thousands of dollars loss to victims. U.S. Law Enforcement took actions time-to-time against phishers. Some of the popular cases are as follows:

The Wounded Warrior Project is a nonprofit organization that was founded in 2003. It’s a charity and a veterans service organization that offers a variety of programs, events and services for those that were wounded in battle. The Wounded Warrior’s Project has grown immensely over the years, they have had great reviews of how they have helped the veterans and their families with contributions to medical expenses and college scholarships. Once I began digging, I found one main problem that the organization had. The keyword, “fraud,” kept resurfacing whenever I was looking for reviews. This sparked some curiosity with the beloved organization.

This paper discusses a brief history of Pat, his wrongdoings and related action, and the response by the related law enforcement agencies.

In addition to the significant financial challenges in obtaining funding and securing capital, the reputational risk is much greater for nonprofits than for-profit businesses (Jackson, 2008). He suggests that cases of fraud or misuse of funding can be especially damaging for nonprofits. Because nonprofit organizations are formed to provide a service to the community and are reliant upon outside donors to serve their mission, they must take certain precautions to safeguard their assets and maintain their relationships with the community. The purpose of this paper is to evaluate the financial health of The Assistance League of Bend.

Are there any restrictions that apply to charitable deductions of old clothes and household items that you, Clarence, intend to deduct?

Did you know that from 2005-2009 the internet scams rose from 100,000 per year to nearly 300, 000 per year (Internet Scam Statistics). From 2010- 2012 it continues to rise beyond 350,000 per year, with a monetary loss of over $300 million per year.

A business can not work out without an account system, which includes internal. Internal controls are used by companies to make sure financial information is accurate and valid. Strong internal controls are signs of a financially healthy company and protect the company’s integrity. Strong internal controls can also increase a company’s profitability. There are several types of internal controls that companies used to protect themselves such as: Segregation of duties, asset purchases, supervisor review, internal audits and adequate documents and records. This paper will discuss several topics from a case study about And the Fraud