Charities exist for a number of reasons, and most of them donate goods or funds to help the communities they serve. Smaller charities, especially those that have recently formed or have not yet established themselves in a market, may face fraud charges if they cannot accurately track their expenditures and link them to charitable purposes. Owners or administrators of such charities may also find themselves facing embezzlement or money laundering charges if expenditures appear to be more personal than in accordance with the charitable organization's goals.

A 37-year-old man from West Bloomfield was charged in Lansing, with two counts of embezzlement and a violation of the charitable solicitation act for misappropriation of over $100,000 in funds collected on behalf of an organization he allegedly created. The organizations, which he named Paralyzed American Veterans of America and Disabled American Veterans, bear names similar to major charities.

Officials claim that the funds gained by the charity were primarily spent on athletic clubs, liquor stores and restaurants instead of being used for, or donated to, charitable works. It is unclear at this time how these alleged expenditures break down and what, if any, charitable work may have been performed.

Understanding the rights and responsibilities of a charitable organization is very important for those seeking to do good deeds under the umbrella of a charity. Not all entertainment expenditures are excluded by charitable solicitation acts. Those accused of soliciting funds for a charity and not using them for charitable acts should seek information on the evidence obtained against them and the laws they stand accused of violating.

Source: MLive, "Michigan man charged in fake disabled veterans charity scam," Melissa Anders, Sept. 7, 2012