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Volunteers of America Southwest Accused of Double-Billing, Fraud and Conflicts

05/04/21

 

In October 2018, James McGowan was a financial clerk for a prominent San Diego charity, Volunteers of America Southwest. While working in the company’s accounting software, he noticed some odd payments to new companies he’d never seen.

The charity was paying one company, JER International, for a confusing range of products. JER sold fitness equipment, trash bags, foam skin cleanser, copy paper and even living room sofas, according to receipts obtained by Voice of San Diego from San Diego County auditors.

The closer McGowan looked at the receipts, the more suspicious he became. Some items, like copy paper and fitness equipment, were marked up to more than twice their market value.

McGowan’s colleague in the finance department, James Harrell, also didn’t trust the receipts. Harrell was not aware of any new vendors providing services to Volunteers of America Southwest, according to a lawsuit he filed against the nonprofit in January. In other words, it seemed possible that JER was billing for items, but not providing them.

The two finance workers went into detective mode. They ultimately discovered three companies doing business with Volunteers of America Southwest that seemed suspicious. Harrell searched the California secretary of state’s website to find out who owned the companies and got a shock. The owners, it turned out, were their own colleagues, a recently hired accountant and clerk who also worked in the finance department.

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Nathan Fletcher is chair of the County Board of Supervisors, which doled out funding to Volunteers of America. He praised county auditors who caught on to the accounting problems and said the organization should be held accountable.

“There is special place in hell for those who take funding designed to help veterans and the least among us,” said Fletcher, who’s also a former Marine. “To betray the trust of taxpayers and the folks counting on those services that are life or death is a level of evil that is massive.” READ MORE