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MONEY LAUNDERING: NGO’S AND CHARITIES
By L. Burke Files
NGO’s and Charities have slowly evolved, under the radar, to become significant channels for laundering money.
Charities alone in the US received 320 billion dollars. About 2% to 3% of US GDP.
NGO’s are also a predictable source of fraud and chicanery.
For example, there are over 100 NGO’s in Palestine. There are only 6,000 square miles – that is one NGO for every 60 square miles. That would be 58,000 NGO’s in the US if the same density were to be applied in the US. That would mean there would be nearly four NGO’s for every one Starbucks outlet in the US!
Having worked in many countries, I can assure you I have heard this statement in many languages. “Want to make a few quick bucks? Set up an NGO.” Also both Charities and NGO’s provide a channel for funneling bribes and laundering money that is unsuspected and unchecked by service providers.
For the most part, when we look at Charities and NGO’s we shrug our shoulders. “Just more do-gooders”, we think to ourselves.And while the world does need more do-gooders, we also need fewer using the ‘do-gooder’network and set-up for chicanery.
All financial institutions and responsible representatives, such as agents, accountants and attorneys need to perform a reasonable amount of due diligence so that they can say, without any guess work, “yes, we know our clients.
For charities, at least in the US, there is a statement of work and purpose that has to be filed with the US Taxing authorities. It is the IRS that has the power to grant charitable status or withhold that status. As charities are for the public good these filings are a part of the public records. It’s your right to ask to see those filings as well as the approval letter from the IRS. Check to see that the charity has continued to operate in a manner that is relatively consistent with the request for and the granting of their charitable status. If the charity’s’ purpose was to save river otters and now they are saving llamas – this may be acceptable. If the charity was chartered to help with education of children but is now sponsoring medical mission to fix cleft pallets – there may be an issue of mission creep. If the charity was sponsored to help elephants in South East Asia and is now involved in unrelated religious activities, you may have a reason to doubt motives.
All charities in the US must file with the IRS a Form 990 at the end of each fiscal year and if you as a donor, service provider, financial intermediary, etc… – do not have a copy, you have been seriously negligent.You can request them from the charity, or you can often get a copy from GuideStar.
The same is true of NGO’s but often with flair. Some NGO’s are not charities, they just spend all of their grant money. Not non-profit or charitable by designation but non-profit by activities. Please look at an NGO’s charter, its funding sources and the congruence of current activity with original chartered purpose. We all need more resources – so please use these links for further reading.
For a US based Charity, I recommend that you have a look at both of these websites:
For NGO guidance I recommend the follow publication:
Do not let your firm or yourself be miss-tasked by Charities and NGO’s out for mischief and chicanery.
L. Burke Files is a private investigator, the president of Financial Examinations Evaluations, Inc, a specialist in financial investigations throughout the world. He is also the author of many financial fraud books. Find Burke at firstname.lastname@example.org