Tuesday, December 1, 2020

Charity operators jailed for stealing donations, tax evasion

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Geraldine Hill and Clayton Hill, a California couple who operated a charity that purported to provide goods to the needy, were sentenced to prison for conspiracy to commit mail fraud and tax evasion.

Geraldine Hill was sentenced to 15 months in prison, and Clayton Hill was sentenced to 9 months in prison, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Robert S. Brewer, Jr. for the Southern District of California.

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According to court documents and statements made in court, the Hills operated On Your Feet (OYF), also known as the Family Resource Center, a tax-exempt charitable organization whose stated mission was to provide assistance to low income families and individuals in need.

From 2011 through 2016, the Hills fraudulently obtained more than $1.35 million in donated clothing and other items for OYF by falsely representing to the donors that the items would be given to needy recipients. In fact, the Hills caused OYF to make only about $13,000 in charitable donations, and then sold the remaining donated items, and used the proceeds to support themselves and their family members.

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Between January 2011 and February 2017, the Hills spent nearly $380,000 from their personal and charity bank accounts on personal expenses including some luxury retail purchases, vacations, entertainment, and vehicles. To conceal their conduct from the IRS, the Hills filed false charitable tax returns for OYF, and did not pay taxes or file personal tax returns for 2013 and 2014.

“The defendants defrauded the IRS and companies that donated goods in an effort to alleviate poverty and suffering among the least fortunate,” said Principal Deputy Assistant Attorney General Zuckerman. “The Tax Division is committed to investigating and prosecuting those individuals who seek to use the cover of a charity to illegally line their own pockets.”

“Geraldine and Clayton Hill lied to unsuspecting donors about the direction of charitable contributions and engaged in tax fraud to cover their trail,” said Jim Lee, Chief of IRS Criminal Investigation. “Unfortunately, the donors were well-meaning organizations interested in helping the needy and this fraud prevented real people in need from receiving assistance. IRS Criminal Investigation works tirelessly to ensure that criminals like the Hills are brought to justice. In cases like these, not only do the needy of our communities suffer, but also taxpayers and the U.S. government.”

On June 9, 2020, the Hills pleaded guilty to conspiracy to commit mail fraud and tax evasion.

In addition to the terms of imprisonment, U.S. District Judge Dana M. Sabraw ordered the Hills to serve three years of supervised release, and to pay $50,933 in restitution to the United States for their tax evasion. A hearing to address victim restitution for the mail fraud will take place at later date.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Brewer commended special agents of the IRS-Criminal Investigation Division and the FBI, who conducted the investigation, and Trial Attorney Valerie Preiss of the Tax Division and Assistant U.S. Attorney Rebecca Kanter, who are prosecuting the case.

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