More than 30 charities were investigated by the Charity Commission after a gang of criminals was found to be using them to make fraudulent grant applications worth hundreds of thousands of pounds.
The gang, some of whom were jailed, defrauded various grant-makers, including the Big Lottery Fund, Comic Relief and Children in Need. The commission, which took seven years to complete its investigations, today published details of the scam in an inquiry report.
The report reveals that the commission began investigating in 2004 when the BLF raised concerns. Its regulatory inquiries were put on hold between 2006 and 2010 to avoid prejudicing a police investigation.
The police inquiry revealed that gang members submitted fraudulent applications for funding that yielded more than half a million pounds. Nine people, eight of whom were trustees, were convicted of fraud and theft offences in 2009 and 2010.
They had focused mainly on applying for small grants, taking advantage of the sporadic checks carried out by grant-makers. The commission reopened its inquiries when the police investigation ended.
Of the 30 charities it quizzed, it found evidence of mismanagement in 12. It provided advice and guidance to some of the others. Twenty-five organisations, including the African Community Welfare Association, the Cameroonian Youth Association and Leeds Great Lakes Community, were eventually removed from the register of charities.
Examples of mismanagement included four-figure payments to trustees or their families "to cover expenses" and sums allocated to private companies in which trustees had a personal interest, the commission’s report says.
"The commission used its powers to transfer the charities’ remaining funds to other charities, so they could be used for charitable purposes," it says.
The commission banned four people – Moses Bushiri, Marcel Mutekulwa, Edmund Ndkana and Prosper Umande – from being trustees.