A charity set up to work with ex-offenders has been removed from the register of charities after its former general secretary was sent to prison for fraud involving charitable funds.
The Charity Commission opened a statutory investigation into the People’s Opportunity to Work Trust in November 2002, in response to concerns about its management and administration.
The report into the inquiry, published yesterday, found little evidence of charitable activity and said it was "unacceptable" that financial control of the charity was exercised by Peter Sainsbury, the general secretary, and not by the trustees.
The investigation found that more than £300,000 of charitable funds were moved between several subsidiary accounts, including £190,000 to an account named POW Investments Ltd and £15,000 to Al’s Bar and Restaurant.
Because the transactions could not be properly accounted for, the regulator concluded that there had been criminal activity involving these funds and referred the case to the police in September 2004.
Both Sainsbury and Kirkvine Ellis, a former trustee, were found guilty of conspiracy to defraud and given prison sentences of five and three years respectively in May 2010.
The report says trustees failed "to ensure that funds held in the name of the charity and its trading subsidiary were used for activities that further the charity’s purpose and not, as it appeared to the inquiry at the time, for criminal and unlawful purposes".
The charity was registered with the commission in 1999 with the aim of supporting the unemployed and people with disabilities, as well as rehabilitating ex-offenders.
It was removed from the register on 7 December last year after the commission’s inquiry and criminal proceedings.
The inquiry report reminds trustees that they are "under a legal duty to ensure that the charity’s funds are applied solely and reasonably to carry out the charity’s purpose and to be able to demonstrate this".