At least 18 Jewish non-profit groups and non-profit groups that support Israeli institutions have notified tax authorities of likely illegal “diversions” of funds in the past five years.
The Washington Post on Sunday published a review of more than 1,000 non-profit organizations that have reported such anomalies since 2008, when the Internal Revenue Service began requiring the reporting of “diversions” of over $250,000 or 5 percent of a group’s gross receipts and assets.
Most such reporting is related to fraud, the Post said, although a small number have to do with “financial restructurings, mergers and other types of financial losses” that are not illegal.
A JTA review of a handful of states with large Jewish populations turned up 18 Jewish non-profits and non-profits that support Israeli institutions recording diversions.
Some are well known, among them the $42.5 million reported by the Conference on Jewish Material Claims Against Germany in fraudulent claims in 2009 and the $95 million Yeshiva University reported it lost from scams associated with Ponzi schemer Bernard Madoff in the same year.
Numerous others losses also appear to be associated with the Madoff frauds.
Others are less well known: The American Friends of the Tel Aviv Museum of Art reported in 2009 that “certain works of art were stolen or destroyed by fire”; The Jewish Community Center of Dutchess County, N.Y., reported in 2010 that its bookkeeper had embezzled funds; and the Advancing Women Professionals and The Jewish Community Inc. reported that an independent contractor in 2010 and 2011 had diverted $62,000 in funds.
18 Jewish Non-Profits Report Major Illegal 'Diversions' of Funds