How NGO managers siphon off funds

The Anti-Money Laundering Authority has compiled and published a report on the methods used by the managers of nongovernmental organizations to divert money from the funds of their organizations. 

The 16-page report, titled “The Abusive Exploitation of Nonprofit Organizations,” was published at almost exactly the same time as the assets of a Greek activist who is being investigated as a suspect for felony fraud against the NGO he headed were frozen.

“In order to benefit, the perpetrators used the weaknesses of the system and the absence of a uniform regulatory framework and adequate supervision of NGOs while exploiting the financial system both domestically and abroad,” the report concludes. 

According to well-informed sources, the Anti-Money Laundering Authority, headed by Charalambos Vourliotis, has carried out audits of more than 100 NGOs in the last two years.

The checks were conducted either on the authority’s own initiative or in response to information about questionable transfers that the authority received from financial institutions. Investigations were occasionally conducted in response to requests from other countries. Forty of the more than 100 NGOs that were audited showed clear signs of fraud and corruption. Managers’ assets have been blocked by the Anti-Money Laundering Authority, which has forwarded its findings to the prosecutor’s office for possible criminal charges.

The report highlights specific techniques allegedly deployed by NGO managers to access the organizations’ cash.

“The perpetrators, as managers or beneficial owners of the NGO under exploitation, use the income of the organization in question to purchase real estate. Through the accounts of the NGO, they pay transfer taxes on real estate, which, however, become the property of the perpetrators and not of the NGO,” the authority has documented. Cases are also noted in which the managers hired persons in their absolute confidence, with the latter returning money paid to them as salaries in the form of remittances to the personal accounts of the NGO heads.

In other cases, the managers or beneficiaries of the NGOs use the income of the organizations to cover their living expenses, as well as the costs of maintaining their homes.

The authority also cites a number of red flags, including crediting payroll from another NGO, remitting money from NGO accounts to businesses with international operations etc.