Can't Have Your (Angel Food) Cake and Eat It Too
in the August 2012 issue of the Charity Rating Guide &
Angel Food Ministries (AFM), a
Georgia-based nonprofit that provided discounted food to families
in need across the U.S., has shut its doors. The group blamed factors
such as the poor economy and high food and fuel costs for the shutdown,
but a recent federal indictment against the charity points to different
problems. The 49-count indictment against AFM founder Joe Wingo,
his wife Linda Wingo, his son Andy Wingo, and AFM employee Harry
Michaels, alleges that theft, fraud, kickbacks, and cover-ups plagued
the charity for nearly nine nears.
Joe Wingo, who also served as a pastor
at a church he founded, started AFM in 1994, a few years after he
served a one-year prison sentence for extortion. AFM purchased food
in bulk and distributed it through a network of volunteers and churches,
allowing it to avoid many of the costs that retail stores face.
Some of the savings were passed on to its customers, who could purchase
food from AFM at about half the retail supermarket price. The group's
stated purpose was to sell affordable food to the needy, but it
actually sold food to anyone. This was a successful business model
for the charity. According to its most recent IRS Form 990, AFM
raked in $130 million in revenue in 2009 from selling over 4.8 million
boxes of food.
Federal investigators announced their
indictment against AFM's leadership in late 2011, concluding a four-year
investigation. The indictment accuses the Wingos of using AFM money
for personal gain and details their extravagant spending habits.
According to investigators, Andy Wingo once used the charity credit
card to buy $4,592 worth of sporting goods in a single day; Joe
Wingo used charity funds to purchase a $65,000 classic car; and
Linda Wingo dropped $23,564 on electronics and household appliances
in 2005 and 2006. The Wingos also allegedly used charity funds to
make a down payment on a jet aircraft, which they purchased on behalf
of their for-profit company, North Carolina Aviation Leasing, and
then leased back to AFM. These purchases were in addition to the
generous compensation the Wingos bestowed on themselves. According
to the charity's tax forms, the Wingo family received over $4.5
million in compensation from AFM from 2006 through 2009.
According to the indictment, in 2006
AFM auditors notified Joe Wingo that charity credit cards could
not be used for personal expenses. Joe Wingo signed a letter of
compliance agreeing to repay any inappropriate expenses already
charged to AFM. He then allegedly issued $1.4 million in AFM checks
to Wingo family members, calling them "bonus wages." He then required
his family members to issue checks back to AFM in the amount of
their bonuses. These funds were deposited and recorded on AFM books
as repayments for expenditures and loans taken out by Joe and Linda
Wingo, falsely erasing the debt that they owed the charity.
The defendants allegedly constructed
other elaborate schemes to cover up their spending. For example,
Andy Wingo asked William Askins, owner of AFM vendor J & W Foods,
to issue a cashier's check to purchase a house for him. He then
instructed Askins to recoup the money used for this purchase by
increasing the price of items sold to AFM. A similar method was
used to funnel AFM funds to Linda Wingo. From February 2005 to December
2006, Askins issued checks to Linda Wingo totaling $110,353. Askins
increased the price of goods sold to AFM to recover the amount of
money he sent to Linda Wingo. In 2007, defendant Harry Michaels
called the president of AFM vendor, Poultry Plus, and asked him
to wire $10,000 to the Trump Plaza Hotel in Atlantic City. Michaels
reportedly advised Poultry Plus's president to bill AFM for cold
storage to recoup these funds. According to the indictment, requiring
vendors to pay kickbacks to the defendants-which were frequently
covered up with fraudulent invoices-was considered "a condition
of continuing to do business with AFM."
The indictment also states that Joe Wingo
used approximately $20,000 in charity funds to support a candidate's
bid for Sherriff of Walton County, Georgia, where AFM is located.
IRS regulations prohibit charitable organizations from intervening
in political campaigns. According to the lawsuit, Joe Wingo instructed
some of his employees that they were receiving bonuses which were
to be donated to the candidate's campaign. Other employees were
told they were receiving bonuses to reimburse them for donations
that Joe Wingo had already made on their behalf. AFM's tax form
for this period states that the charity did not engage in direct
or indirect political campaign activities.
Linda Wingo faces additional charges
on allegations that she tried to thwart investigators. According
to the indictment, she advised witnesses to avoid federal agents
and to withhold the truth from law enforcement officers. She also
reportedly instructed an AFM employee to destroy a computer hard
drive, which may have contained incriminating information.
According to the Atlanta Journal Constitution,
the defendants pleaded not guilty to charges that include conspiracy,
wire fraud, theft from an organization that received federal funds,
interstate transportation of stolen property, tampering with witnesses,
and obstruction of justice. During his status hearing, Joe Wingo
reportedly requested a court-appointed public defender for his forthcoming
trial, arguing that he could not afford to hire a private attorney.
The Journal Constitution reported that the judge denied the
request, saying, "You ought to have resources to hire any lawyer
in the state."