Scotland could remain haven for charity fraud

Bogus charities in Scotland could go undetected or unpunished until 2006 because of the time scale involved in beefing up the country's charity laws.

The promised charities bill, which will force Scottish charities to submit their accounts to a statutory regulator, might not be implemented for more than two years, according to the Scottish Council for Voluntary Organisations.

Last week, the assets of Scottish cancer charity Moonbeams were frozen and its directors suspended after it emerged that only £30,000 from £3m raised had been spent on the cause. And in May, Breast Cancer Research (Scotland) had its assets frozen after investigators found that only £1.5m of £13m raised had ended up with the charity.

Professor Gordon McVie, former joint director general of Cancer Research UK, has warned that more cases of fraud will emerge because of the weakness of charity regulation in Scotland.

He said there were tens of organisations he would not trust, but declined to name names.

He also claimed there were cases of charities being closed down in the US and England and then reopening in Scotland because regulations were a soft touch.

The Executive has set up an Office of the Scottish Charities Regulator to eventually succeed the current regulator, the Scottish Charities Office.

But any change to the regulator's powers to investigate charities must be passed by the Scottish Parliament.

"Without the legal powers which will be published in the Bill, there is very little the Executive is able to do about the bad apples," said Stephen Maxwell, associate director of SCVO.

The Inland Revenue is writing to Scotland's 28,000 charities after suggestions that many are no longer at their last-known address.

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