Charity Operator Charged with Diverting Millions of Dollars of Charitable Funds and Evading Federal Income Tax
MIAMI - Douglas Sailors, 71, formerly of Parkland, Fla., and now living in Owensboro, Ky., was charged with conspiracy to commit mail and wire fraud as well as subscribing to a false tax return.
As set forth in the indictment, from approximately 2009 through 2018, Sailors formed and operated charities for his personal benefit. He hand-picked nominees to serve as board of directors and officers of the charities to conceal his participation in the fraud scheme. Sailors also had a nominee apply for tax exempt status from the IRS and secure a nonprofit designation. To confuse donors, he chose names that sounded similar to legitimate charities—such as Breast Cancer Research and Support Fund; Disabled Veterans Services; United States Firefighters Association, among others.
To further the scheme, Sailors directed the officers and directors of the charities to pay unreasonable fees to management companies owned by nominees yet controlled by Sailors. These management fees were the proceeds of the fraud scheme, which Sailors appropriated for himself to fund his lavish lifestyle.
Sailors used lawyers and accountants to create opinion letters that falsely stated that the fees paid to him were reasonable. He diverted hundreds of thousands of dollars from a charity that was intended to financially support nurses in the Dominican Republic. Management fees were deposited in a defined benefit pension plan where Sailors unlawfully withdrew those funds for his personal benefit and failed to report the income on his personal income tax returns.
Sailors faces a statutory maximum term of imprisonment of 29 years and a fine of $1,000,000 or twice the amount of the gross gain or gross loss.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, Matthew D. Line, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and Robert Dewitt, acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
IRS-CI and the FBI investigated the case. Assistant U.S. Attorneys Paul Schwartz and Jeffrey N. Kaplan are prosecuting it.
An Indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.