Scam Defrauds Seattle Nonprofit of Almost $10,000
A scam targeting nonprofits in Virginia that we reported on last week appears to have spread across the country.
Authorities in Seattle called the scam "an old con," but indicated they believe nonprofits are being targeted in Washington and Oregon.
In late January, an unidentified man emailed the Seattle Hearing, Speech and Deafness Center, offering a $30,000 donation, according to the Seattle Police Department. The charity received a check for $39,850 a few days later, but the "donor" indicated via email that the additional $9,850 was meant for another charity and requested it be wired back to him.
"And we felt horrible that we were going to be taking more money from this donor and not be able to have those funds go to the other nonprofit they had designated," Executive Director Lindsay Klarman told King5, NBC’s Seattle area affiliate. "So we tried to rectify the account.”
The Seattle nonprofit obliged to the request. By the time it learned the original check was fake, the return wire had been processed.
"We lost almost $10,000," Klarman said. "I was in shock, and my stomach just dropped."
Klarman noted that she and her staff vetted the donor, but they still were fooled. The nonprofit has started to improve its security as well as protocols used when verifying a donor’s background since the incident.
"This person was very, very savvy, or the people behind this were very savvy," she said. "Because they somehow made it through our controls."
Klarman’s nonprofit received about $1.2 million in donations in 2014 as well as government funding, according to Charity Navigator.
"It's a big deal," she said. "It's a big hit for our organization."
It is unclear if those behind the fraudulent acts in both areas are the same. In the Virginia instances, a British philanthropist, using the stolen identity of Kenneth (or Ken) McFarlane, emailed the nonprofits, offering five-figure donations. “McFarlane” then sent a check for more than promised and requested about $10,000 be returned. None of the charities complied with the request, but some received bank fees as a result of the bounced checks.
The Seattle Police Department is asking other nonprofits that were targeted in a similar scam to call its fraud unit at 206-684-8981.
"We just felt it was our duty to let [other nonprofits] know what happened to us, so that it doesn't happen to them,” Klarman said. “Make sure you are double checking all of your internal controls, use this as a learning opportunity, and just know to be aware. This is out there."