You Can't Have Your (Angel Food) Cake and Eat It Too
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."