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Press Release
Press Release
Defendant Charged With Misappropriating Almost $1 Million in Charitable Donations
ATLANTA - A federal grand jury has indicted Tyrone Brooks, Sr. on charges that he misappropriated almost $1 million in charitable funds from Universal Humanities, a charity he founded in 1990, and the Georgia Association of Black Elected Officials (GABEO).
“This is a disappointing day. Representative Brooks has done much good in his life, both as a state legislator and civil rights leader," said United States Attorney Sally Quillian Yates. "But the indictment charges that over many years, Representative Brooks misappropriated nearly one million dollars in charitable donations intended to provide literacy training in underserved communities, and from GABEO – the organization for which he has served as president since 1993. Sadly, by diverting these funds to his own use, Representative Brooks deprived those most in need of critical assistance.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated: “While the FBI continues to make public corruption matters its number one priority within its criminal branch, we do so with a clear commitment to the rule of law. Today’s federal grand jury indictment reflects the commitment of the FBI and its law enforcement partners to follow the facts of these investigations wherever they lead us.”
“Mr. Brooks exploited two charitable organizations for his own personal financial gain which came at the expense of the intended beneficiaries of the charitable donations. IRS Criminal Investigation is committed to investigating individuals who use charitable organizations for their personal gain,” stated Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Mr. Brooks defrauded not only the donors but also the American taxpayer by evading his tax obligations. Tax compliance should and must be equally shared among all Americans.”
Brooks, 67, of Atlanta, Ga., was charged by a federal grand jury in a 30-count indictment that includes charges of mail, wire and tax fraud. The indictment charges that, from the mid-1990s through 2012, Brooks solicited contributions from individuals and corporate donors to combat illiteracy and fund other charitable causes, but then used the money to pay personal expenses for himself and his family. The indictment was returned today, and Brooks will appear for arraignment on a date set by the Court.
According to the Indictment:
Universal Humanities Scheme
The indictment charges two fraud schemes, the first involving a tax-exempt charity, Universal Humanities, Inc., that Brooks established in the early 1990s. From at least 1995 through 2012, Brooks solicited contributions for Universal Humanities from corporate and individual donors purportedly to combat illiteracy in disadvantaged communities in Georgia and across the southeastern United States, eventually raising more than $780,000. Donors included the Coca-Cola Company ($400,000), Georgia Pacific Company ($140,000), Northside Hospital ($240,000), and others who gave smaller amounts. Brooks made specific false representations in his written solicitations about the work that Universal Humanities was doing to combat illiteracy and how the donated funds would be used, claiming that Universal Humanities had established literacy programs and was conducting workshops and tutoring and mentoring students. He also falsely claimed that Universal Humanities utilized a staff and operated under the direction of a board of directors.
The indictment alleges that in reality, Brooks did not use the donations to promote and address literacy in Georgia or elsewhere, or to retain a staff, occupy office space, fund workshops, hire instructors, or conduct programs attended by students. Instead, Brooks used the money to pay personal expenses for himself and members of his family, including home repairs, furniture, lawn service, life insurance, entertainment, personal credit card expenses, utility bills, food and clothing, dry cleaning, electronic equipment, jewelry, and payments on personal loans, among other personal expenses.
Brooks generally accomplished the diversion of funds by depositing the solicited donations into a bank account he established in the name of Universal Humanities, then almost immediately transferring the funds to a personal account, from which he paid personal expenses. At times, Brooks paid personal expenses directly from the Universal Humanities account.
More specifically, the indictment alleges that:
As a result of Brooks’ misappropriation of donated funds, the intended beneficiaries of the funds did not receive the needed literacy training or assistance.
GABEO Scheme
A second related scheme charged in the indictment alleges that Brooks also diverted charitable donations he solicited on behalf of GABEO and used much of the money to pay personal expenses for himself and his family. GABEO is an organization of state, county, and municipal elected officials that promotes voter registration, crime prevention, literacy and economic empowerment initiatives.
The indictment alleges that Brooks solicited contributions to GABEO from corporations, organizations and individuals. When Brooks was elected as GABEO’s President in 1993, the organization already maintained an official bank account at a local bank. This account was administered by GABEO’s Treasurer, and disbursements required two signatures by GABEO Board members. In December 1997, Brooks secretly opened a second GABEO bank account at a different bank. Brooks set himself up as the sole signatory on this account, and had the account statements sent to his address rather than the address of the GABEO Treasurer. Brooks then deposited the donations he solicited on behalf of GABEO into this undisclosed account, and used much of these funds to pay personal expenses for himself and his relatives.
Between 2002 and 2012, businesses, civic, religious groups and individuals contributed approximately $300,000 to GABEO through Brooks, which he then deposited into the undisclosed GABEO account. The indictment alleges that Brooks misappropriated donations he solicited on behalf of GABEO from corporations, local teacher unions, small business owners, and individual donors – all of whom relied on Brooks’ assurances that the contributions were intended to further GABEO’s community activities. The GABEO Board was unaware of this activity and did not approve these transactions. In fact, the indictment alleges that after Brooks began diverting donations, members of GABEO’s Board of Directors noted the organization’s apparent loss of most of its corporate donations.
The indictment charges that Brooks misappropriated the GABEO funds in much the same manner as the Universal Humanities funds. The indictment alleges that generally, Brooks deposited funds he solicited on behalf of GABEO into the undisclosed GABEO account, then transferred the funds to his personal account, from which he paid his personal expenses. While Brooks utilized some of the GABEO donations to pay expenses related to GABEO’s annual meetings, he utilized much of the GABEO funds for personal expenses.
More specifically, the indictment charges that:
By misappropriating GABEO donations for his personal use, Brooks benefitted himself at the expense of both GABEO and the communities most in need of the literacy, crime prevention and voter registration programs for which the funds were intended.
False Tax Returns Charges
Finally, the indictment charges that Brooks substantially underreported his income to the IRS for the years 2007 through 2011. Despite Brooks’ charged misappropriation of hundreds of thousands in donations to Universal Humanities and GABEO, his tax returns for the years between 2008 through 2011 falsely reported income of only approximately $35,000 annually.
Overview of the Charges
The indictment charges 30 counts of mail, wire and tax fraud. The mail and wire fraud charges carry a maximum sentence of 20 years in prison and a fine of up to $250,000. The tax charges carry a maximum sentence of three years and a fine of up to $100,000. It is important to note that the sentences imposed may not approach the statutory maximum sentences, as the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
This case is being investigated by Special Agents of the Federal Bureau of Investigation and Internal Revenue Service.
Assistant United States Attorneys Kurt R. Erskine, Richard S. Moultrie, Jr. and Kamal Ghali are prosecuting the case.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.