Charity closed after fraud investigation

A charity set up to fulfil the dreams of terminally ill children has been shut down by the Charity Commission after two trustees and a member of staff were convicted of fraud against the charity totalling almost £0.25m.

The regulator launched the inquiry after police uncovered evidence of a major fraud against the Dream Foundation, based in Newcastle-upon-Tyne, in August 2000.

Maureen Lewis and former police officer David Foley, both trustees, and the charity’s fundraising co-ordinator Joseph Mulcahy, were all convicted of offences involving dishonesty against the charity in 2003.

Foley was given a 12-month prison sentence for theft from the charity and Mulcahy and Lewis were convicted of conspiracy to defraud and were given five years and 21 months respectively.

“Based on a forensic review of the charity’s financial records undertaken by the commission it was determined that more than £238,000 of charitable funds had been misused,” the inquiry report said.

The charity paid for seven season tickets for Newcastle United Football Club but only three children’s ‘dreams’ involved trips to the club, the commission found. The trio also had trips to the USA paid for by the charity on excursions that did not benefit the charity or its beneficiaries. The charity also paid Foley’s council tax bill.

The inquiry found that Mulcahy, who was banned from acting as a trustee due to being bankrupt, was effectively acting in that capacity and chaired board meetings. Lewis admitted to police she had agreed to become a trustee in order to get around Mulcahy’s disqualification.

The commission appointed an interim manager to handle the charity’s finances and then shut it down. The regulator subsequently gained a court order to force the sale of Lewis’ home, which recovered £94,000.

More than £267,000 of the charity’s funds was passed on to a children’s hospice in the area.
Police originally launched an investigation into the charity after Lewis contacted officers alleging that Foley, who was in the force at the time, had forged her signature on bank accounts. The subsequent inquiry uncovered the full extent of the fraud.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus