Two former trustees have been ordered to repay £500,000 to the charity they “abused and exploited”, after a ten-year investigation by the regulator.
The Charity Commission opened a statutory inquiry into Afghan Poverty Relief in 2011, and worked alongside the Metropolitan Police as part of its criminal investigation.
The trustees, Syed Hajnajafi and Akila Kassam, who are husband and wife, were automatically disqualified from their positions after being jailed for theft and fraud in 2014.
Afghan Poverty Relief has now been dissolved and removed from the charity register.
The Commission published its inquiry report last week. The regulator acknowledged that it taken a long time to complete its work and said this was down to “complexities experienced by the interim manager in transferring the charity’s remaining assets, and then winding the charity up”.
Afghan Poverty Relief registered as a charity in 2004, to address poverty and help orphans in Afghanistan.
The Charity Commission began a statutory inquiry in February 2011, to investigate concerns about governance and financial transactions at the charity, and specifically whether its funds were “being used for significant private advantage”.
Hajnajafi and Kassam were arrested in November that year. In 2013, both were charged with theft, and Kassam was later charged on four counts of fraud relating to the annual returns the charity had filed with the Commission.
They were found guilty of all charges in 2014. Hajnajafi was sentenced to five years in prison and Kassam to three.
Both were automatically disqualified as trustees or from senior positions at any charity as a result of the convictions.
The court ordered that the two must return over £530,000 to the charity, of which £457,000 had been repaid by 2017.
In the course of the Commission’s inquiry, the regulator suspended both trustees, froze the charity’s bank account, and ruled that neither Hajnajafi nor Kassam could raise money without the regulator’s prior consent.
The inquiry concluded that the charity “was mismanaged by its trustees” and “intentionally abused” by Hajnajafi and Kassam “to facilitate their criminal conduct”.
Financial analysis by the regulator found that over £215,000 was paid into the trustees’ personal and business bank accounts following cash withdrawals of £254,000 from the charity’s accounts, in the period between 2007 and 2011.
The inquiry also found that Hajnajafi had accepted a cash donation from a member of the public after the Commission had ruled that neither trustee could fundraise without consent. The charity’s other two trustees confirmed that this donation was never banked, and “could not demonstrate that the funds received were appropriately applied”.
Charity wound up
The Commission appointed Pesh Framjee, from the accountancy firm Crowe, as interim manager at the charity after the criminal case concluded in 2014, and he took over responsibility for Afghan Poverty Relief from the remaining trustees.
Framjee oversaw the winding up of the charity in May this year, after identifying a suitable international charity to which Afghan Poverty Relief’s remaining assets could be transferred.
Tim Hopkins, assistant director of investigations and inquiries at the Charity Commission, said: “Charity represents the best of human characteristics – that’s why the behaviour and conduct of those involved in charities matters.
“This charity was set up to support vulnerable and disadvantaged people, including orphans in Afghanistan.
“Instead of ensuring donations received by the charity were applied for charitable purposes, two of its then trustees abused and exploited it for criminal purposes.
“In doing so, they committed criminal offences, breached charity law and exhibited behaviours which fell far below the legal and public expectations of how trustees should behave.
“I am pleased that our investigation has helped bring those individuals to justice, and that, together with the police and the interim manager, we have ensured significant sums, that would otherwise have been lost, were returned to charity.”