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October 28, 2013

Vermont Nonprofits Among the Swindled

Dreamstime_s_7621129Three Vermont non-profit organizations reported to the Internal Revenue Service that they experienced significant financial losses due to theft in recent years, according to an investigation published by the Washington Post on Sunday.

The Post analyzed federal tax filings from 2008 to 2012 submitted by organizations across the country and found more than 1000 nonprofits reported a “significant diversion” of assets, primarily as a result of theft or embezzlement, which drained an estimated $500 million from their collective coffers.

The Post found three Vermont organizations in that category and made their records available in a database.

White River Junction-based Twin Pines Housing Trust, which provides low-income housing, the American Legion Post 29 in Readsboro and the South Burlington-based Make-a-Wish Foundation of Vermont reported being victimized on their Federal Form 990s, which nonprofits provide the Internal Revenue Service. 

In its 2009 Form 990, Twin Pines said it had experienced an “electronic attempt” to transfer $9600 from an administrative bank account. Various banks prevented half of that from being transferred, the organization said. 

Of the portion that was successfully stolen, half was restored by the insurance company. A donation from Mascoma Savings Bank covered the remainder. 

Andrew Winters, executive director of the Twin Pines Housing Trust, said the theft was never solved, but was thought to have been committed by someone outside the organization  "hacking" into either the nonprofit or the bank.

"Like a thief in the middle of the night," Winters added. In the end, though, "we were made whole," he said.

Make-A-Wish Foundation of Vermont doesn’t belong in the Post’s database, CEO Leslie Williams told Seven Days.

Williams said someone accidentally checked the wrong box on the 990 form in 2009. Make-A-Wish provided Seven Days a copy of the organization's audit to support that assertion.

“There was a clerical error,” Williams said. “It was inadvertently checked. There was no diversion.”

In its 2010 Form 990, the American Legion Post in Readsboro reported to the IRS that a “theft of funds was discovered when (the) bank notified an officer of multiple checks being issued to one individual.”

The organization provided the IRS no further information.

But court documents and media reports from 2010 explain what happened.

Dawnette Greene, who was acting as a caregiver to the former treasurer of the American Legion Post, was charged in 2010 with using his checkbook and signature stamp to draw on the Legion’s funds. 

The case was eventually transferred to federal court. In November 2011, Greene was sentenced to 15 months in prison and ordered to pay $65,000 to the Legion Post, according to federal court records.

Officials at the American Legion Post in Readsboro could not be reached for comment on Monday.

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