Theft. It’s the world’s second oldest profession. Some use force. Others cunning. Where the pickings are easy. Like your local charity. Who’d do such a thing? The nice people.
Take Bobby Thompson. Head honcho at the United States Navy Veteran’s Association. Headquartered in Washington, DC. Thompson was photographed at political fundraisers with the likes of George W. Bush and John McCain. While he was wanted by the FBI. For robbing his own charity. To the tune of twenty million bucks. How?
Start with his charity’s headquarters. A rented post office box. No physical address. Zilch. He’s got one now. It’s federal custody for the next twenty-eight years. How’d he get caught? Google.
It happened here too. Right down the street. At Ron LeValley’s place. With another rented post office box. In the name of MRB Research. A charity. LeValley used it to launder nearly seven figures in stolen Yurok money. Yup. He’s wearing orange now too.
Like Thompson, LeValley suckered everybody. How? With a local sponsor. Charlene McAllister. On the board of directors at the local Audubon Society. Check. President at the local hospital. Uh-huh. And president of the local hospital foundation too. Right.
McAllister started backing LeValley in 2000. Right around April Fool’s Day. As co-founder of MRB Research. With more co-founders. And real addresses. Like the U.S. Fish and Wildlife Service. And Humboldt State University. With references like that, how can you go wrong? Google.
Which takes us to the local hospital foundation and our now-bankrupt hospital. According to State records — courtesy of Google — the foundation is supposed to bankroll the hospital. According to hospital records – also Google – the required amount is $2 million a year. But the foundation’s been short over the past ten years. By around twenty million dollars. Which is why the hospital went bust. Where can you find that? On Google.
The hospital foundation began in 1984 with fifteen pages of bylaws. All approved by the State. With language like ‘membership’, ‘voting rights’ and ‘board of trustees’. But in 2006 that all disappeared. Instead, phrases like ‘governing board’ and ‘advisory board’ appeared. Eight pages of bylaws vanished too. Another curious change was a provision for ‘honorary trustee’ where the self-elected board could ‘designate a certain distinguished person’ to this position with ‘terms and specific honors’ determined ‘at the time of designation.’ None of these changes were reported to the State.
At the time of these changes, one of the advisory board members was none other than LeValley’s sponsor, Charlene McAllister. As you might expect, this wasn’t reported to the State either. McAllister was president of the hospital at the time. But with a Grand Jury investigation closing in, she jumped ship to become a full-fledged member of the foundation’s newly minted ‘board of governors’. By 2008, she was running the place.
This is where the story gets really interesting. Got Google? Look up “Mendocino Coast Hospital Foundation” “2008” and “990”. Be sure to include the quotes. What you’ll find is the foundation’s 2008 tax return. Look at the bottom of page one. The foundation’s net assets were nearly three million dollars then. Right? Then check out the signature. It’s Charlene McAllister’s. Okay. Now turn to page twenty-two. The foundation hired a professional fundraising company that year. Seventy thousand dollars in cost produced two hundred grand net. Right? That’s around a three-to-one profit ratio. Isn’t it?
Turn to the next page. These are the figures for Winesong! You’ll see that six hundred thousand in expenses produced a quarter million net. That’s a fraction of the profit ratio for professional fundraising. Correct? So why bother with Winesong? Check out item number seven titled ‘Other direct expenses’. See the amount? It’s five hundred and eighty thousand dollars. Dude, that is one helluva petty cash drawer!
What happened to that fundraising company? They got pocketed. State law requires that if a charity employs such a company, their contact information must be reported. On something called a Registration Renewal Fee form. You can find that on Google too. Signed by guess who? Charlene McAllister. Under penalty of perjury. But according to that form, the foundation didn’t employ a professional fundraising company in 2008. This sleight-of-hand allowed McAllister to bury the fundraising company in favor of Winesong! And protect her gigantic slush fund.
Now go back to the 2008 tax return for a minute. To the last page. This tax return was available to all board members for review. So how many were there? Go to page eight. There were fifteen other board members at the time. Right? Did they all miss this? Could they? Look up the foundation’s tax returns for every year since then. That little old fundraising company seems to have disappeared too. How could that happen?
Think about it. You’ve got an advisory board. And honorary trustees. Not elected by membership. But appointed by self-appointed board members. Unreported in any State document. Couldn’t they review that tax return? And handle the miscellaneous expenses as well? How? Through something called the ‘investment committee’. In the State approved bylaws, this committee was required to use safeguards. But not in the new bylaws. These folks could do anything they wanted. Carte blanche. Without the board of governors.
Better yet, someone like Ron LeValley could fit the criteria for ‘honorary trustee’. Why not? What’d keep him from handling a few bucks? Or a whole suitcase full? Now think about putting someone like that on the investment committee. With ‘terms and specific honors’ such as handling cash? Like he did at MRB Research?
Finally, go to the last page of the foundation’s 2008 tax return again. Financial statements are available to the public on request at any time. Do you see anything about 990 tax returns there? I don’t. Fortunately for us, we have the IRS on our side. Go to the bottom of page seven. Item eighteen. The IRS requires them to be publically available. So who has them? Look at item twenty. It’s Charlene McAllister! Guess what, Charlene? The IRS has them too. So does Google.
When the Feds finally caught up with Bobby Thompson, they went looking for his board of directors. What do you think they found?
Something like Charlene McAllister’s ‘governing board’ today. Along with all the nice people.
And they found it all on Google.