Charity used as a fraudulent platform
Commission publishes report of inquiry into Yoruba Language and Cultural Heritage.
The Charity Commission (’the commission’) today published a report of its inquiry) into Yoruba Language and Cultural Heritage (‘the charity’). The commission’s inquiry considered whether the charity operated for the public benefit and whether the trustees had committed mismanagement or misconduct.
The charity was registered with the commission in July 2012. It had objects to advance the education of the public in the Yoruba language, heritage and culture.
The commission opened a case in August 2013 after the commission was contacted by an online donation platform. Concerns were raised that payments made to the charity were fraudulent as they had been made without the credit card holder’s knowledge. In November 2013, a different online donation platform raised further concerns with the commission regarding potential fraudulent payments. Both companies had attempted to contact the charity but did not receive any response.
Further enquiries by the regulator uncovered that the bank statement submitted to the commission on registration was fraudulent, and that 12 cheques had been paid to 2 of the charities trustees, to the value of £14,070.
Given the serious nature of the concerns and result of its preliminary enquiries the commission escalated its engagement with the charity and opened a statutory inquiry in April 2014. The inquiry wrote to the 6 individuals listed as trustees for the charity, however only 2 individuals responded. The inquiry found no evidence to connect these individuals to the charity and it is believed their identities were stolen. Despite efforts, the commission was unable to locate or contact the 2 trustees who had received funds from the charity.
The commission further examined the payments made to the 2 trustees and saw no evidence that the payments formed a part of any legitimate charitable expenditure. The trustees also failed to submit their financial information to the commission and failed to comply with the commission’s requests for information.
The inquiry concluded that the failure of the trustees to account for the charitable funds they had received amounted to misconduct and mismanagement. The commission considered that the provision of the fraudulent bank statement by the charity at registration was likely to amount to an offence under section 60 of the Charities Act 2011.
The commission passed its concerns to Action Fraud and the police, and removed the charity from the register in March 2015 as it was no longer operating. This reduced the risk of future abuse.
Carl Mehta, Head of Investigations and Enforcement at the commission, said:
Trustees must use charitable funds only to further the charity’s objects. The commission found in this case, that the individuals who registered it had provided false information to the commission. In addition, there was no evidence of charitable activity, there was evidence the donations were fraudulently obtained and diverted to the bank accounts for private gain and that the charity had been set up and used purely for this purpose. We take such cases very seriously and have reported this to Action Fraud and the police and have removed the charity from the register.
The full report is available on GOV.UK.
Notes to editors
- The Charity Commission is the independent regulator of charities in England and Wales. To find out more about our work, see our annual report.
- Search for charities on our online register.
- Read more information on how the commission reports on its regulatory work.
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Published: 24 March 2016
From: The Charity Commission