The founder of a North Carolina nonprofit and his two alleged accomplices pleaded guilty to federal charges of defrauding a Canadian fertilizer company of more than $620,000 in matching charitable contributions. The funds were obtained through an illicit kickback scheme operated by the defendants from 2010 through 2018.
Dwayne Moorer West, 60, of Fuquay-Varina, North Carolina, pleaded guilty on March 5 to a federal charge of conspiracy to commit wire and mail fraud after being charged this past December as the alleged mastermind of the scheme. The other alleged conspirators, Martin Fareed Abdullah and Michael Lavern King, pleaded guilty on Jan. 23 to the same charges.
All three face up to 20 years in federal prison and fines of up to $250,000 each plus restitution. A sentencing date has not yet been scheduled. The three were released on their own recognizance and forced to surrender their passports after entering their pleas in the U.S. District Court for the Eastern District of North Carolina in Durham. Attorneys for the three defendants did not reply to a request for comment.
West allegedly conceived of the scheme shortly after founding the B.A.G.S. Foundation, an acronym for “Boys and Girls Succeed,” in 2007. Beginning in January 2010 and continuing through July 2018, West used funds from the Raleigh, North Carolina charity to obtain bank checks purporting to be “donations” to the charity. He and Abdullah, a charity employee, then enlisted King to recruit employees of the fertilizer company where King worked to agree to be listed as fictitious payers on those checks.
The employees redeposited the checks into the charity’s accounts and submitted receipts of their “donations” to their employer with a request for a matching charitable contribution. A portion of each matching contribution was then kicked back to them.
Approximately 13 company employees were in on the scheme with “donation” amounts ranging from $500 to $5,000, according to court documents submitted by the U.S. Attorney’s Office for the Eastern District of North Carolina. During the eight-year period, matching grant requests were allegedly submitted by them through the mail and electronically from computers in North Carolina to company servers in Illinois that resulted in the mailing of more than 200 paper checks payable to B.A.G.S., according to prosecutors.
The fertilizer company, Nutrien, is headquartered in Saskatoon, Canada, with multinational operations that include North Carolina. It previously operated as the Potash Corp. of Saskatchewan until 2018. A Nutrien official confirmed to The NonProfit Times that King is no longer employed there but declined to elaborate. “We conducted an internal investigation into this matter and took all appropriate action including cooperating with the U.S. Attorney’s Office,” said Christian Brown, a spokesperson.
It is unclear if the B.A.G.S. Foundation is still operational as it does not appear to have filed a Form 990 with the Internal Revenue Service since November 2017. The last available filing shows it took in 2016 revenue of $725,377 with a year-end fund balance of $86,814.
West is identified on the 2016 filing and previous filings as the charity’s unpaid director along with two other unpaid officers. There are no paid personnel listed. Abdullah does not appear to be listed on the forms but is identified in court documents as having worked for the charity as a fundraiser.
