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.
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.
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.