Zurik: Tax payments or fine dining? Nonprofit's officers choose the good life

Zurik: Tax payments or fine dining? Nonprofit's officers choose the good life
Alternatives Living CFO Rickey Roberson
Alternatives Living CFO Rickey Roberson
Alternatives Living executive director Melanie Duplechain (left) and Ada Craige-Roberson, the company's program director
Alternatives Living executive director Melanie Duplechain (left) and Ada Craige-Roberson, the company's program director

NEW ORLEANS (WVUE) - A nonprofit that owes the Internal Revenue Service more than $1 million is spending money on pricey meals, trips and even gas. That non-profit,

, gets all of its money from the state and is paid to take care of the disabled and homeless.

Is this legal?

“I don't think it is,” says Loyola professor and certified public accountant Patrick Lynch. “I think it's an abuse and a misappropriation of assets.”

Lynch says the abuse starts with this New Orleans nonprofit's failure to pay $800,000 in payroll taxes for its employees. Records show the IRS says they're owed an additional $500,000 in penalties and interest.

And while they've owed that $1.3 million to the taxman, Alternatives Living's officers have spent tens of thousands of dollars on pricey meals, cars and trips, all out of the nonprofit's bank account.

“I think they're living high on the hog on taxpayer money,” Lynch says

Taxpayers actually fund this nonprofit. Alternatives Living operates out of an office on Magnolia Street in uptown New Orleans. They receive grants from the federal government. In 2012, those grants totaled $2,824,726. Their mission is to take care of the disabled and homeless.

But Lynch says the officers have also been using the nonprofit's money to take care of themselves. “Apparently it's been misappropriated, used for lavish expenses and personal expenditures,” he says.

We reviewed four years' worth of credit card statements. In that time, they spent $31,501.97 on food, dining at some of the area's top restaurants. That included a $567 meal at Muriel's and $528 on a Sunday at Stella. One Friday, they charged the nonprofit $521 at NOLA Restaurant and, on another Friday, $421 at Commander's Palace. And In January of this year, they had another $400 meal at Commander's.

Rickey Roberson serves as the nonprofit's chief financial officer. On Valentine's Day 2013, he had two restaurant charges: $155 at Redfish Grill and $216 at Ruth's Chris Steakhouse.

Three of the officers have credit cards: Roberson, his wife and Alternatives Living director Ada Craige-Roberson, and her mother, the nonprofit's executive director Melanie Duplechain. In four years, the nonprofit picked up their restaurant tab 343 times. During that same time period, the nonprofit got way behind on its taxes.

"We were at a point where, in order to maintain the grant, we had to provide adequate office space and stuff like that which we didn't have," Roberson explains. "At that point, we had to have additional office space, so we added additional office space to our office. And that's the reason why."

So basically they added office space instead of paying their payroll taxes.

"When it comes down to personal charges on the credit card, at our agency we are always working," Roberson tells us. "Basically we are on call 24/7. "

The nonprofit picked up the tab at a Morton's steakhouse in Georgia, a Cracker Barrel in Vicksburg, and even a vending machine in south Florida - twice.

“I think they're living high on the hog on taxpayer money.” - Patrick Lynch

Along with the meals, the officers charged $31,923.86 in tickets and entertainment. That ranged from Cirque de Soleil to the Legends of Hip Hop. And in four years, they spent $23,299.66 on Hornets tickets.

And the officers spent $19,000 travel. That included charges at hotels in Miami and Las Vegas, flights to Orlando, and even several charges with cruise lines.

“This is completely mismanaged, and the agency is being used as a bank by the directors and the officers,” Lynch says. “I don't see how Hornets tickets helps them help these mentally and physically challenged people. I don't know how a $1,643 charge for Carnival Conquest helps that mission. I don't know how a $1,395 expenditure for Carnival Liberty helps that mission.”

Whether it was intentional or not, there was certainly a decision made to put these personal charges on the nonprofit's credit cards, instead of paying payroll taxes.

“Well, that's true,” Roberson acknowledges. “But like I said, it depends on what the charges are - because sometimes, if I'm working while I'm on vacation or something like that, or even if I'm out of town, if I have Internet access that I need to use to handle the company's business, then that's an appropriate charge.”

As for the cruise line charges, Roberson says, “I don't recall putting any cruises on the credit card that I can remember. However, when we were on vacation, like I said, we may have charges for Internet access and stuff like that - and if we were talking, maybe a meal or something like that.”

We found $4,007.12 of charges related to cruises - for the Carnival Conquest, Carnival Liberty, the Atlantis, Royal Caribbean and even cruise parking - all paid on the nonprofit's credit cards.

“We used the credit card for the incidentals,” Ada Craige-Roberson says, “and they're personal charges that came along with Internet access and whatever else we did, drinks....Tips would have gone on there, and tips are automatically charged, I can tell you that. If we went to dinner, like on the cruise, it would have been there. Sometimes I booked the excursions separately. But if they were booked onboard and we did an excursion, it was on there.”

The nonprofit also paid the incidental expenses for the Robersons' two kids.

“In our minds, we're not really thinking we're paying for our personal vacation on the company,” Craige-Roberson insists.

The officers had seven purchases at Tuesday Morning, a woman's fashion store, $378 in charges at Metairie Small Animal Hospital, and $3,898.55 of purchases on Amazon.com. We don't know if any of these charges were related to the nonprofit's mission.

Alternatives Living's officers showed up FOX 8's studios for our interview. They drove together in a white Mercedes-Benz. Records show the nonprofit covers the lease payments for the car: $540 a month.

“Well, I don't think it's a problem because, I think, we could have gotten a Chevy that paid the same amount of the note, the lease for,” Roberson says. “So I don't think the name brand makes a difference.”

But a quick search of the Internet shows they could have leased a Chevy Impala for $269 a month, a Traverse for $279, or even a Honda Accord for $189 a month, instead of the $540 Mercedes. They could have saved some money to help pay off their tax debt.

“I don't believe that's a legitimate 501(c)(3),” Lynch says. “And I have a problem as a taxpayer continuing to fund it.”

In four years, the three officers charged $36,389.77 at gas stations and convenience stores. That's a lot of gas purchases.

“It's a lot of driving,” Craige-Roberson responds.

Alternatives Living also rarely paid a bill on time. In four years, they've incurred $23,988 in late fees and interest charges.

“Is that mismanagement? I think it is,” says Lynch.

The nonprofit's officer say they plan to settle their tax issues.

“It was never because our intent was trying to, 'Let me do it on this so I don't have to pay taxes,'” Craig Roberson says.

They also say changes have been made, and the nonprofit is no longer paying any personal expenses. They also told us their expertise is in taking care of the homeless and disabled, and running a business was new to them - records show the nonprofit has been in business since 1993.

“So some of the stuff, we just didn't know and we learned the hard way,” Roberson tells us.

But Lynch says their spending could catch the attention of the IRS, if they decide these expenses are personal and are then unreported compensation.

“Then that is income to these officers,” he says, “and consequently they have to pay federal and state income taxes.”

The fact is that you can't make personal expenses out of such a nonprofit account. “You couldn't do that with a regular corporation either,” says Lynch. “That's a misappropriation of assets, which is a fancy word for ‘you're stealing.'”

The state's Department of Health and Hospitals oversees all of the grant money given to Alternatives Living. In a statement, they told us, "The Department takes the use of taxpayer dollars intended to provide care to Louisiana residents very seriously and addresses any potential misuse... Alternatives Living does provide high-quality services through the Louisiana Permanent Supportive Housing Program. However, all Louisiana providers must be wise stewards of public funds."

DHH added that Alternatives Living is working with the IRS and the state to clear up those tax issues.

We also want to note that the nonprofit's officers provided their information freely to FOX 8, not resisting our requests for documentation.

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