The Charity Commission has disqualified two people from being trustees after they used a charity to falsely claim state benefits.
Two people connected to Families for Survival (FFS) and Save the Age Ltd (STA) have been disqualified following a joint investigation involving the Commission, police, local council and Department for Work Pensions, which found FFS had been part of a scheme to fraudulently claim benefits.
FFS was established to provide support to disabled people, orphaned children, and others in need and claimed to have provided medical care, food, shelters and education. STA’s objects were to relieve need associated with old age, including the relief of poverty, sickness and social inclusion.
Harvey Grenville, head of investigations and enforcement at the Charity Commission, said: “This case highlights a cynical abuse of trusteeship by two individuals who used the good name of charity to further unlawful personal motives. They have proven themselves wholly unfit to serve as trustees.
“Close cooperation between different agencies has been critical to the outcome of this case. Our intervention has upheld key principles of charity law and helped criminal proceedings in bringing these individuals to justice.”
Concerns raised in 2014
In February 2014 a member of the public complained to the Commission that FFS did not have the correct public fundraising licenses and that fundraisers were reluctant to explain the charity.
Through its engagement, the Commission identified other concerns about the charity, including unauthorised trustee payment, payments to connected individuals and lack of evidence for any charitable expenditure.
A monitoring case was opened and the Commission provided trustees with advice and guidance.
The Metropolitan Police, London Redbridge Council and the Department for Work and Pensions were investigating a network of charitable and non-charitable organisations which included FFS and STA in relation to allegations of financial crime, money laundering and fake identities.
This investigation was looking into non-UK residents travelling to the UK and paying personal funds into FFS’s bank account, which were then paid back to them via the BACS system in the guise of wages. Wage slips were then used to claim housing and other benefits from the council and DWP. It found that people listed as trustees and directors on the Charity Commission and Companies House had, in fact, no connection to the charity.
A trustee and former trustee were arrested in May 2015.
In March 2016 both were convicted - one for conspiracy to dishonestly make false representation to make gain for himself or another or to cause loss to another or to expose another to a risk of loss contrary to the Fraud Act 2006, and was given a custodial sentence. The other was for dishonestly producing or furnishing documents or information contrary to the Social Security Administration Act 1992, and was given a custodial sentence.
The Commission opened statutory inquiries in November and December into FFS and STA respectively. It had previously held off taking any action so that it did not prejudice the police investigation.
It concluded that FFS was “clearly used for unlawful and improper purposes” and that both charities “failed to provide the inquiry with adequate evidence of charitable activity”, or that they had spent funds on charitable activity, as declared in its annual accounts.
The individuals were also directors of companies that provided accountancy services to the charities, including reviewing accounts. The Commission said that conflicts of interest were not managed properly.
They were also unable to explain how £16,000, which was paid to the two trustees over a number of years, could be classified as “expenses”.
The Commission concluded that FFS was “used for unlawful and improper purposes” and that there had been “serious misconduct and/or mismanagement” at both charities.
New trustees at FFS decided to close the charity and it was removed from the Register of Charities on 26 January 2017. The Commission instigated the removal of STA as it had minimal funds and was no longer operating.