Bogus Charity Squanders $1M ... Parkinson's Group Exposed In 2002
Can't give receipts, but still raises cash

The Toronto Star, Canada
KEVIN DONOVAN - STAFF REPORTER

Aug. 7, 2004. 08:35 AM

Booze, cigarettes, dinners, groceries, mysterious cash payments and trips to a
casino. Along with exorbitant fundraising costs, that's how a bogus Parkinson's
disease charity frittered away more than $1 million in donations from a generous
public, according to a government audit.

The Parkinson's Support and Research Society has now been stripped of its right to
issue charitable tax receipts. The next step, federal officials hope, is to close its
doors this fall.

Of the more than $1 million donated to it by the Canadian public in a little more than
two years, the group has earmarked only $2,020 for its grandiose plan to build a
string of daycare centres for adults suffering from the degenerative disease.

That means less than 1 per cent of the charity's expenditures went to its planned
good works. Nothing has been built; no counselling programs or drug-plan benefits
materialized.

Charity watchdogs say a good organization devotes 60 per cent or more of annual
expenditures to good works (dubbed the "Good Works Index").

"That money, destined to do good, is lost forever," wrote Roger Leclaire, the justice
department lawyer who took the society to federal court on behalf of the Canada
Revenue Agency, which licenses charities. The audits and affidavits by tax officials
were filed with the court as part of the government's bid to shut the group down.

It's a case that raises a key issue in the world of Canadian charities: How can the
public separate the good from the bad? Typically, donors think registered charities
authorized to issue a tax receipt have been thoroughly checked out by the
government. In fact, becoming a charity in Canada is pretty much a rubber-stamp
process.

The federal Charities Directorate (part of the Canada Revenue Agency) is trying to
crack down on scams but has the resources to do detailed audits on only a few
each year. About 15,000 of Canada's 80,000 licensed charities fall below the 60 per
cent mark. Some of those are out-and-out scams, while others are simply poorly
managed, but there is no way to know unless you examine the business of the
charity.

It's up to the donor to check out a charity. Until recently, the public had little hope of
easily finding reliable information. But for the past two years, the government has
posted financial statements from most charities on a Web site http://www.cra-
arc.gc.ca ; click "English" then "charities" then "search".

The bogus Parkinson's society officials, including an ex-RCMP officer who started
the fund, did not return calls from the Star. Ex-Mountie David Waldron runs the
charity out of a Nova Scotia office with the help of his daughter and other relatives
and friends.

The bogus charity was publicly outed in a Toronto Star investigation in 2002. The
federal taxman, which oversees charities, has been investigating ever since,
following up on complaints by concerned donors and a legitimate charity with a
similar name, the Parkinson Society Canada.

"People give in good faith to charities. What this group has done is wrong. I am sad
that this trust has been broken," said Maryann Istiloglu, acting executive director of
the legitimate Parkinson's charity. Her charity, which funds research and actively
helps Parkinson sufferers, is in the midst of a reorganization and is trying to raise
the percentage of income it puts toward good works (its "Good Works Index" has
hovered slightly above or below 50 per cent over the past three years).

Istiloglu's charity contributed $1 million to vital research projects last year. She
looks at the cash the bogus charity took as money down the drain. "I just think it is
so unethical," she says. About 100,000 Canadians have Parkinson's, a debilitating
disease that has no cure.

The bogus charity is based in Bedford, N.S., but raised much of its money in
Ontario. As recently as last week it was collecting donations door-to-door and in
food stores around the GTA.

Back in 2001, the federal government took just seven weeks to issue the group a
charity licence, based on its stated promise to build daycare facilities that would
"offer respite to caregivers and the sufferer," provide recreation and nutrition
counselling, and "aggressively support scientific research."

In reality, a Star investigation found in 2002, it was created by a family that was
short of cash and looking for jobs. Waldron, the dad, was was trying to make a
living as a cab driver and computer consultant. He had gone bankrupt following a
failed business venture. Waldron told the Star he was experiencing the onset of
Parkinson's and hoped that money raised would help people like him pay for the
living expenses of people suffering the disease.

Also involved in the charity were Waldron's two daughters, a son-in-law, his ex-wife,
and her new husband (who owned a rundown trucking yard that the charity said
would make a good home for the daycare centre).

The society hired Ontario-based fundraisers to canvass the public. The contracts
signed by the society entitled the fundraiser to keep as much as 81 cents of each
fundraising dollar, the government audit found. The audit showed that, of the $1
million raised between June, 2001, and November, 2003, the fundraiser kept
$658,185 (66 per cent). The group has been actively raising funds since then, but
how much has come in is unknown.

Fundraisers (one was Courtesy Call, based in Oshawa) used aggressive tactics to
get money from the public in door-to-door and telephone campaigns across
Canada. Unwitting donors say fundraisers told them the money was needed to find
a cure, or that a chain of homes was about to be built, with one in their
neighbourhood. Some donors approached at home were suffering from Parkinson's,
which raised suspicions the group had obtained a real charity's mailing list.

Some of $47,000 in unexplained Interac withdrawals from the charity's bank account
were made at an ATM at the Halifax casino
After the fundraisers were paid, the rest of the cash, about $350,000, went to the
charity, which cut cheques for personal expenses, salaries and unknown
administrative costs.

For its glitzy website, the bogus charity copied detailed information on the disease
and the need for research money from the website of a legitimate Parkinson charity
based in Ottawa. That charity took the scammers to court and ended the ongoing
plagiarism.

Still, the money rolled in. According to the audit, the Waldron family and others
used some of the funds to buy groceries, restaurant meals, liquor and cigarettes
and to pay salaries.

Auditors also found the directors of the charity (the Waldrons' extended family)
received $150,000 in unexplained payments. Directors of charities are not
supposed to benefit from being directors. The audit also turned up $140,000 in
personal loans made to two members of the Waldron family (not identified in court
documents).

The audit also discovered many cheques written to unknown suppliers. The charity
has refused to explain any of these payments to the government, documents filed in
court state.

Intriguingly, the auditors noted that some of the $47,000 in unexplained Interac
withdrawals from the charity's bank account were made at an ATM at the Halifax
Casino.

The case shows not only how easy it is for a bogus charity to be registered in
Canada, but also how long it takes to get one shut down.

The bogus charity started in 2001. By 2002, Ottawa had dozens of complaints from
the public and legitimate charities.

The charity could not explain to government officials where the donations were
going and what charitable programs were being supported.

By 2003, with money still rolling in, it was clear to the taxman that the charity's
business was fundraising, not helping Parkinson's patients. Finally, on March 3, the
Canada Revenue Agency told the society it would revoke its charitable status.

The charity appealed and kept on fundraising. Last week, the government agency
obtained a court order preventing the charity from issuing tax receipts while the
appeal was pending. While it can still collect donations, it can no longer issue a
receipt, something the public sees as proof of legitimacy.

Now, the taxman and federal justice department are pushing to get the appeal
dismissed. A ruling is likely by September. A dismissal would shut the charity down.

The Star's research shows that charities that are closed down tend to pop up again
under a different name, with some of the same people involved.

Several years ago, there was a Canadian charity devoted to the eye disease
glaucoma.

After taking $600,000 from the public, one of the principals created the National
Society for Abused Women and Children, which in turn was shut down after taking
$1 million in donations and giving nothing. Some fundraisers for that group went on
to raise cash for the bogus Parkinson's charity.

Penalties for running a bogus charity rarely go beyond simply shutting it down and,
occasionally, banning directors from acting as such for another charity. In rare
cases, such as that of the National Society for Abused Women and Children, a
court order can force directors to reimburse some money.

Police investigations are even rarer. In the case of the bogus Parkinson's group,
complaints to police in Ontario and the Maritimes did not result in charges.

Instead, police suggested donors contact federal charity officials.

Kevin Donovan can be reached at 416-869-4425

SOURCE: The Toronto Star, Canada
http://tinyurl.com/3jcao

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