Must repay gifts of stolen funds

From ANIMAL PEOPLE, November/December 2010:

ST. AUGUSTINE–Judas contributed his 30
pieces of silver toward the purchase of a
potter’s field in which to bury the poor, and
Robin Hood robbed from the rich to give to the
poor, but charities accept donations of
ill-gotten gains at their peril, according to
U.S. courts.

In Florida, “Five nonprofits are under
the gun to repay as Lydia Cladek is investigated
in a Ponzi scheme said to have involved $100
million in losses,” reported Don Scanlan of the
Florida Times Union on November 6, 2010. “Among
the returns sought are $75,000 from Awaiting
Justice,” a recently reincorporated horse
sanctuary founded by Marie Matte as Diamonds in
the Rough in 2004, “and about $1 million from
Goliath & BeBe’s World,” a multi-species
sanctuary and dog-and-cat adoption program
founded in 2001 by Nedra Wooley and Joyce Walker.
Matte told Scanlan that Cladek gave
$37,290 to Diamonds in the Rough in 2008 and
2009, but plaintiffs are seeking repayment of
twice as much as Matte says the charity received.
The sum sought from Goliath & BeBe’s World is
almost the entire revenue of the charity in
2007-2009, about 40% of which was raised through
program service, according to the Goliath &
BeBe’s World filings of IRS Form 990.
Says the Goliath & BeBe’s World web site,
“Recently, the owner of the property filed for
bankruptcyŠIf we are unable to purchase it, we
will lose the sanctuary.”
The Sevier County Humane Society in
Pigeon Forge, Tennessee, in 2009 discovered
that “we are required under law to return
donations made” by another alleged Ponzi schemer,
Dennis Bolze, executive director Jayne Vaughn
told ANIMAL PEOPLE. “We have enlisted the help
of an attorney to handle
negotiations/communication with the trustee from
the bankruptcy court. We have not yet settled,”
Vaughn said. “The American Eagle Foundation here
got hit the worst,” Vaughn added, “as in
addition to having to repay donations received,
they had invested a significant amount of money
with Bolze, that was sacrificed as well, and
also have to return any dividends they received.”
American Eagle Foundation founder Al
Cecere did not respond to an ANIMAL PEOPLE
inquiry, but the foundation “may be out more
than $1.25 million,” reported Derek Hodge of The
Mountain Press: what the foundation lost to bad
investments, plus $814,000 in donations claimed
by creditors. Hodge wrote that the American
Eagle Foundation is contesting the payback order.