Shoplifting, Larceny, Robbery, Theft Embezzlement from relief organization

[jmiltime]

I have been leading a relief effort from Arizona to the Phlippines that started in March 2007. Over this time we have wired money totalling around $70,000 to an account that was set up for us by a member (I will call him Jim) of a church organization (501(c)3) who is from this area and still has business there.

The money was earmarked very specifically to be used for support for the staff overseas as well as for projects (building a school, cooperative store, bathrooms, security wall, aquiring land, etc.). Until recently I was relying on Jim to manage most of the communication with the staff overseas and to ensure that the money was going where it was supposed to. I was alerted recently to the fact that money may not be reaching its destination (though we know it reached the account overseas). I began to communicate with leadership overseas through social networking sites and the information they were telling me, if true, would mean at least $18,000 (could be up to $30,000 if project costs were inflated to us and some projects were not done) of the money was missing. Because of the nature of the area, it is very difficult to track down standard receipts for labor and most money transactions are done in cash.

The only people involved in money handling overseas is Jim, his accountant and the leader of the group we are supporting. For what it's worth, I trust the leader (as he would have nothign to gain and everything to lost by lying about this), the accountant could not have mishandled this much money over a 2 year period of time without Jim knowing about it, so I am inclined to think Jim is mishandling the money.

Is there any way to aquire bank records from an overseas account? This is the only way at this time I would know of to account for the money. Also, is there any other course of action or way to track money once overseas?

Thank you for any insight.

 

[army judge]

Is "Jim" a citizen of the USA?
Even if "Jim" is a foreign national, US federal authorities can prosecute this case, as these are 503c funds.
You can speak with the US Secret Service, as I believe they are the US law enforcement agency with jurisdiction in these matters. If not, they will tell you where to bring your complaint. The bottom line here is, after getting authorities involved, justice can be pursued. I doubt, however, you'll recover much (if any) of your pilfered/looted funds. But, you should see that the thief gets what is coming to him.


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[jmiltime]

Thanks Army Judge,

Yes, 'Jim' is a US citizen. He has family and business in the Philippines but lives in the states. Part of my dilemma is that Jim is fairly connected and the leadership of the organization we are helping is not. I fear that with loose receipt practices if Jim decides to point fingers at innocent people, they may be in danger. I guess I cannot take one risk without the other and I agree, I would like to see justice happen even if little funds get recovered. Both would be nice.

Thanks again

 

[jmiltime]

As a follow up to this, 'Jim' has admitted to diverting funds in the amount of about $15,000 from 'personal support' to 'project costs' (at least this is his current documented story). When wired, the money with amounts was earmarked to be spent in specific areas. Jim admits to 'diverting funds' without myself (effort Leader), our organization (501c3), or the staff overseas knowing about it. Jim obviously never had the authority to divert the money and it is still in question (and highly unlikely) that the money was actually diverted to 'projects' (this will be evaluated as we look over the books this week).

My question is, is what Jim has already admitted to - "diverting money from one area to another without those in authority knowing about it" - a criminal offense? And if it is, and we are unable to account for the $15,000, would Jim be held legally liable to repay that money?

 

[FlaRiptide]

It may be helpful to define the diversion with more detail.

For instance, if I wrote a company check to myself and thus diverting the funds to benefit me that is indeed criminal.

Yet, if my superiors were not available and a crisis occurred and I wrote a check to someone which prevented damage to or in some other manner benefited the company then I don't believe that would be criminal. My superiors may or may not be upset with me and they might decide to fire me, yet the action was not criminal.

You need to account for the $15,000 prior to making a conclusion of criminal activity or not.

 

[army judge]

If you're a 501c3, you can ask the IRS to audit you. That way, they can uncover any misdirected funds. The IRS can point the crooked finger of accusation at the wrongdoer. Or, you can tell the IRS what you suspect and save them the trouble of rooting out the truth. Either way, if you sit on it, you'll lose your 501c3 status and more of you might be accused.


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[jmiltime]

Thanks for the responses. Basically, we wire money that is specifically allocated to certain areas. We were informed that money wasn't getting to where we were sending it though Jim has said it was and has provided 'loose records' of that which have passed recent audits (as we are looking for a loan so were audited extensively). He would say that receipts aren't given and cash is used in this very 3rd world area. When we pressed Jim on this with evidence of our concern he then states that their was not enough money for projects so he used money designated for personal support for leaders abroad to pay for projects. This means the leaders have received no money (about $10,000). And there is another $5,000 Jim told us was spent in other areas but we are now finding was never spent.

We are currently in the process of an internal investigation to go over bank statements and follow the money before we proceed with legal action. I have estimates from other sources on the projects and I am being told the money we sent originally was too much (though Jim is saying he needed 40% more).

The question is, since Jim had no authority to make the decision he said he made, and he made no attempt to contact or communicate he was diverting funds (in fact he lied to Philippine leadership about it saying we never sent it) and it was not in the best interest of us or those receiving the money, does this constitute theft?

In a 3rd world Jim can easily create invoices for work as most documents are hand written and done by workers on the street and are nearly impossible to verify. However, if we cannot completely prove where the money ended up, but know that he misdirected funds and lied about it, does that make him responsible for the money?

By the way, it may interest you to know, Jim does bookkeeping for his wife who is a doctor, and deals in real estate in the Philippines and was involved in politics there prior to coming to the states. He is very intelligent and savvy, yet is acting as though few/no records and handshakes are 'how things are done' in the Philippines. Nothing about this seems right to me.

 

[army judge]

Thanks for the responses. Basically, we wire money that is specifically allocated to certain areas. We were informed that money wasn't getting to where we were sending it though Jim has said it was and has provided 'loose records' of that which have passed recent audits (as we are looking for a loan so were audited extensively). He would say that receipts aren't given and cash is used in this very 3rd world area. When we pressed Jim on this with evidence of our concern he then states that their was not enough money for projects so he used money designated for personal support for leaders abroad to pay for projects. This means the leaders have received no money (about $10,000). And there is another $5,000 Jim told us was spent in other areas but we are now finding was never spent.

We are currently in the process of an internal investigation to go over bank statements and follow the money before we proceed with legal action. I have estimates from other sources on the projects and I am being told the money we sent originally was too much (though Jim is saying he needed 40% more).

The question is, since Jim had no authority to make the decision he said he made, and he made no attempt to contact or communicate he was diverting funds (in fact he lied to Philippine leadership about it saying we never sent it) and it was not in the best interest of us or those receiving the money, does this constitute theft?

In a 3rd world Jim can easily create invoices for work as most documents are hand written and done by workers on the street and are nearly impossible to verify. However, if we cannot completely prove where the money ended up, but know that he misdirected funds and lied about it, does that make him responsible for the money?

By the way, it may interest you to know, Jim does bookkeeping for his wife who is a doctor, and deals in real estate in the Philippines and was involved in politics there prior to coming to the states. He is very intelligent and savvy, yet is acting as though few/no records and handshakes are 'how things are done' in the Philippines. Nothing about this seems right to me.

Sic the jackbooted, IRS thugs on him. Then sit back and enjoy the show. He won't outsmart those babies.



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[jmiltime]

I'm hoping more and more that it goes that way. We should find out what his whole story is and how he attempts to show 'records', then we will know more of the situation we are in. I think he knows he's in some trouble right now.

Thanks Army Judge!