Two connected charities were removed from the Charity Commission’s register after the regulator found that trustees had misled it about the amount of money in the charities’ accounts.
Commission statements published today reveal that trustees of the anti-smoking charity The Light and the Muslim charity the Fatimiyya Trust had in their annual reports overestimated the amount they had in their bank accounts by £600,000.
A commission investigation also found that one former trustee of The Light had benefited from an undeclared loan to their company of £35,000, which the charity made no attempt to recoup.
The commission received a complaint in 2013 that The Light did not have proper accounting measures in place.
After examining The Light’s bank accounts, the commission found that between 1 February 2009 and 31 January 2013 the charity had an income of £376,900 and spent £367,500, despite claiming to have brought in £815,800 and spent £735,600.
Meanwhile, the Fatimiyya Trust had an income of £82,800 and spent £73,400, despite claiming to have brought in £296,000 and to have spent £280,000.
The commission opened inquiries into both charities on 27 June 2014, but they were postponed because of an HM Revenue & Customs investigation, which resulted in one former trustee of the Fatimiyya Trust and two former trustees of The Light being convicted for fraud in relation to false Gift Aid claims.
The three former trustees are now automatically disqualified from serving as trustees of any charity.
All of the trustees were living abroadat the time of the investigation and did not respond to the commission’s requests for information, including how and when they met to discuss the charities.
The commission made an unannounced visit to the charities’ registered address but found no evidence the charities were operating there. An office manager later confirmed they had left in early 2014.
Both charities were removed from the register in December 2016 on the grounds that they had ceased to operate.
Amy Spiller, head of the investigations team at the Charity Commission, said: "What went on here was a clear abuse of that trust and unacceptable misuse of funds intended to support good causes.
"I am pleased that we were able to stop further abuse by removing the trustees and removing the charities from the register.
"Our investigators also shared important information to support the prosecution, and it is right that those responsible were held to account for their actions."
A spokeswoman for the commission told Third Sector that the commission would have liked to have reported on the investigations before now, but this had not been possible because of resourcing issues and the commission had prioritised work where there was "an active risk of harm".