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Wisconsin charities lose millions to theft, fraud

UNDATED (WSAU-Wheeler News)  Almost two dozen Wisconsin charities lost millions-of-dollars to inside thieves over the past five years.

The Washington Post found that over a thousand non-profit groups in the U-S -- and 22 in Wisconsin -- reported fraudulent "diversions" of assets on their federal tax returns from 2008-through-last year. The Post said the 10 largest diversions drained over a half-billion-dollars from charities. Its list included the Oneida Golf and Country Club in Green Bay, which reported on its 2008 return that a former controller embezzled $2.6-million over eight years. Waukesha Memorial Hospital lost $1.4-million over five years when an employee created a fake billing scheme. Shepherds' Baptist Ministries of Union Grove reported a half-million-dollar embezzlement from its ex-controller, Michael Lowstetter. The president of Shepherds Ministries, William Amstutz, said it raised concerns about trust which affected his entire organization emotionally but quote, "It has not rocked our faith."

All told, four Wisconsin credit unions reported fraudulent diversions on their tax returns -- as well as a land trust, a volunteer fire department, and a chamber of commerce. The Washington Post said the reported losses represent only a small fraction of the total. The diversion box on the tax return is relatively new, and it only applies to larger charities. Many don't report the amounts of their losses, or the reasons -- even though both are supposed to be listed. Some embezzlements were made public soon after they occurred, but many never were.