Charities struck off following £1.6m fraud case

Fraud

Two charities ran by a couple convicted of using migrants to falsely claim benefits have been removed from the charity register

20th July 2018 by Gareth Jones 0 Comments

Two former charity trustees have been disqualified for their part in a million-pound benefit fraud scheme.

Chowdhury Muyeed and Asma Khanam were jailed in 2016 for five-and-a-half years and three-and-a-half years respectively for their involvement in a £1.6 million scheme which saw migrants being flown over from Italy to falsely claim benefits.

The Charity Commission, the English and Welsh regulator, opted to ban the pair from serving as trustees this week and also removed the two organisations the couple were involved with from its register.

Families for Survival and Save the Age Ltd were set up to provide support to disabled people and orphaned children, and relieve the elderly of poverty, sickness and social isolation. However, the commission’s inquiry found limited evidence of charitable activity being carried out by either organisation.

The commission said it had been monitoring Families for Survival since February 2014 after concerns were raised about the charity’s fundraising practices. Further probes established that it was linked to Save the Age through shared founding trustees and a shared correspondence address.

Investigations by the Metropolitan Police Service, Redbridge Council and the Department for Work and Pensions were launched into suspected housing benefit and social security benefit fraud involving the charities. The founding trustees were both arrested in May 2015.

The regulator said it had further concerns about misuse of the charities, potential unauthorised trustee payments, lack of evidence of charitable expenditure and dubious fundraising activities, so it opened inquiries into both charities and issued a protective order to freeze the bank account of Save the Age.

The joint agency investigation identified that a number of the names listed as trustees of the charities, apart from the two founding trustees, had been hijacked from individuals who did not have any connection with the charities.

Further investigations found that the trustees were instructing their own accountancy firms to review the charities’ accounts and benefitted financially from the arrangement.

The inquiry also found up to £14,000 in unauthorised private benefit was paid to the trustees, and annual accounts were submitted containing false information. Both sets of accounts were reviewed by the same accounting company. However one of the independent examiners signing off accounts was untraceable and the other was in fact an alias for one of the founding trustees.

Despite assertions that they were carrying out charitable activity at local nursing homes and campaigning in support of the elderly, scrutiny of accounts and a review of records held by Redbridge Council brought up no corroborating evidence.

The commission concluded that there had been serious misconduct and mismanagement in the administration of both charities. As well as using the charities to facilitate unlawful activity, Muyeed Khanam were deemed to have failed in their fundamental duties and responsibilities as charity trustees.

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.”