Zurik: Credit card statements raise serious questions for Krewe of Nyx
NEW ORLEANS (WVUE) - One of Carnival's most popular and largest parades spent money on Gulf Coast beach trips. Now, the captain of the Mystic Krewe of Nyx refuses to answer our questions after a source dropped off a stack of credit card records that one CPA says may show violations of the law.
Carnival krewes typically spend money on beads, floats and bands. So, when one krewe's credit card shows a $7,000 charge for a Gulf Shores vacation, it raises serious questions.
"There are several in there that raise red flags to me," says CPA Patrick Lynch of Rogers, Lynch & Associates.
The $7,000 charge was apparently for a condo rental at Gulf Shores, Alabama.
A few weeks after Mardi Gras in 2016, Nyx credit card records show charges at an Office Depot in Foley, Alabama, at a Walgreens in Gulf Shores and at Papa Rocco's Restaurant, also in Gulf Shores. Someone also charged $212 at The Hangout.
A source gave FOX 8 News about 23 months' worth of credit card records for the Krewe of Nyx, which is a non-profit organization. A review shows dozens and dozens of charges that raise questions.
"Being a nonprofit, any and all monies they expend should be furthering the mission of the nonprofit and it should not be benefiting any individuals," Lynch says.
If they're not, there could be serious implications for Nyx. "Then they run afoul of 501(c)(7) [regulations for nonprofit social clubs] and they could lose their nonprofit status," Lynch says. "Moreover, if it is personal, technically that's income or compensation to the individual. They should be paying income tax, FICA tax."
On April 7, 2016, the Nyx credit card was swiped at Tony Angello's Restaurant. The cost was $631. On November 1, the card has two Tony Angello's charges on the same night: one for $998, the other $114.
On a Friday night in 2015, someone charged $97 at a hibachi restaurant in Slidell. We also found a $62 charge at a Japanese restaurant in Slidell the Friday before that.
Krewe captain Julie Lea lives in Slidell.
We spotted a Walmart charge on the North Shore, as well as $43 at a Rouses in Slidell and $196 at off Broadway shoes, again in Slidell.
We found dozens of iTunes payments. In November 2015 alone, there were 12 separate iTunes charges, totaling $172. The Nyx credit card had a nearly $50,000 balance that month.
The restaurant charges over the two-year stretch add up: $535 at Pascal Manale, $482 at Grand Isle, $314 at The Columns are a few more examples from a long list.
"If the IRS came in here and audited this organization, they would be looking for supporting documentation for those restaurant charges," Lynch says, "the who, what, when, where, why."
Mardi Gras is big business. The Krewe of Nyx has 2,951 riders. One member tells us dues cost $650. That alone brings in nearly $1.91 million every year.
Julie Lea founded Nyx in 2011. The all-female krewe rolls on the Wednesday before Mardi Gras, an elaborate hand-decorated purse its prized throw.
Many of the card charges do seem to relate to Mardi Gras. But Lynch says so many expenses raise a red flag with him - such as charges at Snap Fitness, Winn Dixie in Slidell and the New Orleans Yacht Club.
Lynch says he's been part of Mardi Gras organizations for 30 years. If such spending were found at one of his groups, he says, "I would call the captain on the carpet. And then, if I couldn't get redress there, I'd resign."
We've asked Nyx to specifically address whether all of the credit card charges were related to the nonprofit, and also to explain the Gulf Shores charges. They told us they wouldn't respond until Monday.
The attorney representing Nyx did write, "My client is extremely troubled by the fact that there has been an unauthorized and wrongful dissemination of the Krewe's credit card number and billing statements. This account information was never authorized to be given out to anyone other than the Directors and Officers of the Krewe, and amounts to a breach of its financial security."
And regarding that $7,000 charge on the Alabama Gulf Coast, the attorney writes, "The $7,000 charge was for the board of directors annual meeting in Gulf Shores. This meeting is held every year by the board."
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