A charity trustee was jailed for seven years after stealing more than £600,000 from the Egyptian Community Association in the UK and then failing to pay back his debt by the deadline ordered by the courts, the Charity Commission has said in a report published today.
Nehad Gamal-Eldin was found guilty of charges of theft of £627,000 in November 2012 and was sentenced to imprisonment for three years, the commission said in its inquiry report. In September 2013, he failed to repay to the charity almost £703,000 by the given deadline when issued with a confiscation order, and was therefore sentenced to a further four years’ imprisonment.
The commission opened an inquiry into the charitable company, the Egyptian Community Association in the UK, in November 2011 after being approached by several complainants who said that charitable funds had been transferred into Gamal-Eldin’s personal bank accounts.
The funds taken by Gamal-Eldin between November 2009 and October 2010 were the proceeds from the sale of a property owned by an unincorporated charity, also known as the Egyptian Community Association in the UK, that were initially transferred to the charitable company shortly after the sale, the commission report said. The charitable funds were later transferred into Gamal-Eldin’s accounts.
The regulator found that Gamal-Eldin had engaged in misconduct and mismanagement of funds, and consequently gave notice to remove him as trustee and contacted the police. Gamal-Eldin was arrested in September 2012 and jailed two months later.
Michelle Russell, head of investigations and enforcement at the Charity Commission, said: "The theft of any charitable funds is unacceptable – in this case it was more than £600,000. The sentence given to the trustee sends a clear signal that abuse of charities will not go unpunished, and the additional years of imprisonment that were handed down demonstrate that failure to return charitable funds is also taken very seriously by the courts."
The commission’s report of the inquiry concludes that there was a "serious failure by the former trustees of the charitable company to put in place proper financial controls and decision making procedures to protect charitable funds".
Galal Ismail, chairman of the unincorporated charity, said that the Egyptian Community Association is continuing with its aim of providing education and social activities to the Egyptian community in the UK, despite a note on the Charity Commission website that says that it is not active and that all activities were suspended by the commission. The commission says the note was written by the charity.
Ismail said the charity first complained to the commission about the misappropriation of funds by Gamal-Eldin as early as 2009, but its concerns were "not taken seriously" until late 2012. "The commission has done a lot of bad for us," he said. "They have not done their work properly. We helped them, we went to the police and we gave them all the information they needed."
As of December 2012, the charitable company had no validly appointed trustees and had ceased to operate. It was removed from the register of charities.
Russell said that the investigation findings have wider lessons for all trustees to take steps to protect charitable funds from abuse and ensure they are used for legitimate purposes.