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Shawn P Adamo
Shawn P Adamo, CPA, Professor, CFP. CGMA, Business Consultant, Professor, PFS I have decades of experience answering these questions.
Category: Finance
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Experience:  CPA, Professor, CFP. CGMA, Business Consultant, Professor, PFS I have decades of experience answering these questions.
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I believe I've found a business that cells itself a charity,

Customer Question

I believe I've found a business that cells itself a charity, files 990 exemption forms, but is not a charity at all. It's been active 8 years or so, and I'd like to find out if the issues I find suspicious on this charity's 990 forms are as significant as I believe they are.
First, this charity claims to help children with disabilities; they state 50 children a year come to their facilities and get therapy. They claim the kids are referred to them by doctors, therapists, or local public organizations that are for disables children. I called the organizations who refer parents to places for therapy; they'd never heard of this one, despite its proximity, but knew of the other three rehabs which offer identical help, but are much further away. I also called every pediatrician and doctor that specializes in areas that a disabled child might see; no one had heard of it.
The board of directors was only 4 people, all related through marriage, but using maiden names on the 990 so the relation isn't obvious. The fourth person is their tax Pearson, while address doesn't exist; it's in the middle of a national park.
For 2 consecutive years, only two employees are listed. They are both therapists. But on the line on the 990 asking how much was paid out to employees over the year, $600 was entered.
The 990 stated that $22,000 was spent for someone to make and upkeep a web page about the charity and it's facilities. The charity had no web site, nor had they ever had a web site. If someone gave a friend the name or description of this charity, but couldn't remember the phone number, the friend could look everywhere- phone book, internet, therapy centers, and never find it. If eventually they did get it from a 990, they'd get a line long disconnected.
The other purchases listed on the 990 were few, expensive, and all of the same thing. It was an item the charity would need, albeit the charity wouldn't need the highest echelon of quality these purchases represented; the purchases listed was a luxury item that could lend great enjoyment as something privately owned. The similar charities list of purchases gave the impression of a working institution; everything from office supplies to equipment used at such a place.
There is nothing on the internet about them; despite 8 years of offering their therapy, the only mention one can find of this charity is on sites offering public 990 forms, or
on a few of the sites that pick up public phone numbers and business names from the white pages or data bank, then the site makes a generic page for the business. These sites hope the business will then come to the site, and use the page, filling it up with advertisement, information on what, where, and why the business exists. These sites especially offer a way for the business / charity to tell the world how to reach them.
this charity has never been in the local papers, nor on local TV, nor news.
The charity lists only one phone number, but it hasn't worked for two years.
The charity shows it makes $80.000 to $200,000 in fund raisers and donations. There haven't been any fund raisers thrown for this place. I looked at the 990 forms of the other charities offering very similar help to children; those charities list each fundraiser thrown, what and when it was, and the amount each fundraiser raised. Any other type of money drive is also similarly listed, described, and the amount of money received is noted. All the similar charities did this.
The charity I find suspicious wrote one word; donations. Then the amount, which ran from 80K to 200K each year.
I called one of the board members who served for the first several years, but then wasn't listed as board member anymore. The 990 stated this person spent 3-4 hours a month in meetings. The interesting thing about this person is that they live next door to the charity. The charity sits on some of the most expensive land in the state. It's a huge parcel; the board member/ neighbor has the lot next to this charity, and was an executive of a company that gives severance packages in the high 7 figures. This neighbors portfolio in stock or it may have been charitable donations is public, and hundreds of items long. So, this is an extremely wealthy person. The 1%, you could call them! and be right. When I calked them, after hearing a hello and that my call concerned the charity in question, they became extremely agitated, and said their relationship,with the charity was O V E R; the attempt to put distance between the charity and themselves couldn't have been clearer.
I didn't attempt any more questions. My interpretation is that this person found out the extent of the charity next door, and realized that their involvement with it could bring big trouble if and when the authorities discovered the truth.
Does all this make you suspicious?
Submitted: 2 years ago.
Category: Finance
Expert:  Shawn P Adamo replied 2 years ago.

Hello. My specialty is focusing on YOUR Financial needs. Financial Planner/Business Owner for 20 years. CPA,PFS,QFP,GMMA.

Suspicious? Everything is suspicious.

a non-profit or a not for profit?

Is it a 501(C)3?

I'll offer you a call because it seems to me you want to keep the identity private.

I'm on the board of a non-profit (a real one).

There are ways to determine even more about this "charity". We can discuss that on the telephone discussion. All you need do is accept the offer. If not we can text back and forth.

Customer: replied 1 year ago.
I'm sorry I took so long to reply; My father's health suddenly took a turn for the worse and my care taking duties became overwhelming. I would love to speak with you. I believe this couple has been living a very very high life, not only defrauding the government , but by pressing fabricated criminal charges against people who are becoming close to this farce via friendship with innocent relatives. No one is allowed to visit this huge piece of land upon which children are supposedly being helped by the dozens, daily. A close friend of mine had been invited several times to this "magical place" by a close relative of the owners. He had just turned 65, and a seven year friendship had brought my friend and thus mildly schizophrenic relative into a kind and caring friendship. I believe this was the first friend the relative of the "charity owners" had ever had. I'd commented for years about this fellow, who was almost totally ignored by his charity driven siblings. When the charity owners discovered the close, beneficial friendship, they at first tried to tell the police my friend was stealing from the sibling. However not one cent was ever stolen; in fact this sibling was constantly without staples like soap and food. Eventually the millionaire. Charity owners convinced the police that elder abuse was occurring, because on two occasions my friend used the siblings. are car to due grocery shopping for him. My friend paid for everything. Including fixing up the sad condo where the sibling lived. The charity owners literally drugged their sibling, and as they control wether he has his rent paid, groceries delivered, or his auto paid, the sibling said nothing while his family claimed elder abuser. It was seeing how this man lived that made me check into the charity. I didn't believe that anyone who so neglected a blood sibling could possibly have the character interested in helping others for free. I was right. I've found out so many facts that point to a huge charade; every piece of evidence produced by thus enterprise is in fact something totally different than what it purports. These people were quite. Rich before the charity- they have held on to that wealth through the deception of a non profit for helping disadvantaged children overcome. Handicaps. Every tax break possible was afforded to this couple. Comparing their 990 forms to charities doing exactly the same thing expose the fact that none of their actions are as described. Simply money pouring in from unnamed sources then disappearing on purchases that do not exist, and are never used. Right now I'm re- joining justansr, to use a better email and new credit card. My subscription may have lapsed over the last month or two. My new account will be under the email***@******.*** and my phone is(###) ###-####or cell(###) ###-#### ***** Nicole. I hope u receive thus; I've got to get subscribed up again. Thank you.