Potential scam - anyone au fait with Companies House/Charities Commission stuff?

[ScamOrNot]

TLDR Suspect a scam. Need someone who knows whether having multiple companies subject to compulsory dissolution is normal.

To state from the off, I am changing key details, sorry. 1. Because I could be completely wrong, 2. Because if I am right it could result in court proceedings.

I am very suspicious around a small charity and associated CICs that are successfully applying for grant funding from large organisation actions.

The deal as I think it may be is similar to the following:

Grant applied for to deliver activities in a local area. Eg a range of sports, food art related activities to a 2,000 kids in a socially deprived area across 6 weeks. Grant awarded.

Scheme is not advertised anywhere. The total attendance at activities is around 30 or two per day open. Delivery of the activities is commissioned to external providers. They DO deliver, but what’s billed as huge multi sport drop in sessions is a quick kick about with a company director of one of these companies with a couple of kids. The kids get a free hot meal from another provider - all two of them.

The main charity is over 200 days overdue on their accounts. There is a huge crossover between directors/trustees of the other providers. There are many companies in their names that appear to be set up and subject to being compulsorily dissolved over a number of years. So imagine Mrs S. Cam is one of the charity’s trustees, she is also current secretary of a sports activity provider and also a food provider contracted to provide services at this activity. Her companies house back story shows she’s had 15 plus other companies dissolved in the last 10 years and Google shows these ex companies have been involved in similar activities that have flopped. Other trustees have a similar picture.

I feel they could be getting grants, procuring services from their own shell companies which then never declare accounts and get shut down.

However, I know very little about whether it’s normal to have lots of companies dissolved - are they just dormant companies? I also don’t feel I have any more than gut to report anywhere yet. I could of course be entirely wrong too.

Anyone have an eye on this stuff?

Grants from whom?

If you are changing key details then nobody can advice you if you are right or wrong. If you have genuine concerns, report to the charity commission. All charities have to report back to their donors/grant makers so I doubt they would get away with this “scam” for long. Who gives them grants?

It is not usual to have lots of companies struck off compulsorily.

If you have concerns I would ring the whistleblowing hot line for the council who gave the grants (if the grants are public funds).

I feel I’ve given enough details to represent the situation well.

Grants have been awarded by both large national players - the usuals - local authorities and small local grants with potentially less oversight. I’m slightly suspicious one of the big players hasn’t given their whole grant amount over for a previous activity, and why this might be

One trustee is “larger than life”, and in a lot of ways very inspirational. However the flip side, is that any question by any organisation is shut down by him very quickly as racism and discrimination. This seems, from what I can see, to have completely shut down all questions around previous activities and there’s a similar position now.

From how you have described it, it sounds suspicious and like a scam to me too.

Try contacting You and Yours at the BBC, they love a good scam investigation

From what you've described, OP, I think the concerns are potentially legitimate, although it's obviously impossible to tell without all of the detail. In your position, I would flag your concerns with the Charity Commission, with as much evidence as you are able to provide, and let them investigate if they consider it appropriate.

If it's on a large or largish scale I'd be tempted to contact an investigative journo if some description and suggest they do some digging. One that's either locally related or interested in the thing the charity is supposed to do

It doea sound potentially dodgy

Contact your local newspaper. They can investigate who the grants came from and what they were contracted to deliver. The council will also be interested if public funds are being misappropriated.

worked in the sector for 20+ years
overdue accounts is a major red flat
have been grantmaker in private foundations and national and national lottery funds - would not award to and org with seriously overdue filing - even a week or so, I'd be seeking an explanation of why late.

what's your position in this - have you been approached for funding, or just aware of the operation (or lack of operation) and concerned?

best thing sounds like raising your concerned with CC.

Raising Concerns · Starter Portal (charitycommission.gov.uk)

Since there are charities and CICs involved, you could complain both to the Charity Commission and to the Regulator of Community Interest Companies.
I believe that the insolvency service also investigates complaints about company malpractice (not just relating to insolvency, but with a wider remit).
Companies House itself also seems to be taking a more pro-active investigative stance, though I think its remit might be limited to the accuracy of information submitted by companies.
I've added links to the Regulator of Community Interest Companies and the insolvency service's investigative role.
https://www.gov.uk/government/organisations/office-of-the-regulator-of-community-interest-companies/about/complaints-procedure#how-to-complain-about-a-cic
https://www.gov.uk/government/publications/reporting-misconduct-by-companies-directors-and-bankrupts-to-the-insolvency-service/reporting-misconduct-by-companies-directors-and-bankrupts-to-the-insolvency-service

This is your second post on this subject. Just take some action and you'll feel better for it.b

Why the 2nd post about this?

No it isn’t, so am assuming you’re a standard Friday night on Mumsnet shit stirrer

Really helpful. Thank you.

What country is the project based?

Position: LA hirer of the land/venue.

Useful advice thank you so much.

Uk. England.

I work in this sector and I would report if you're suspicious. Ultimately any grant providers should be requesting receipts for everything provided and any unused funds should be returned as per contract. It's not uncommon to apply for funding based on large numbers attending, and then have a drop off especially when working with vulnerable people, but in that instance at least some of the funds should be returned as stipulated by the company. Eg if I apply for 13 teens to go go karting but only 8 turn up on the day I need to return the cost for the 5 who didn't attend and would need to provide evidence that the other 8 did attend. If they're forging documentation and being fraudulent then they're essentially taking money out of the pockets of other organisations who can put it to better use.

Interesting. There were not dissimilar questions raised about a charity that was in the news in 2022, following an encounter at a royal residence. There was long thread on Twitter about it all, with someone giving a lot of detail about the existence of closely related organisations.

However i) the Charity Commission’s powers are relatively limited and ii) be prepared for this to backfire with people asking why you are raising concerns, or making false assumptions about your motives.

This sounds very dodgy.
I have worked in the third sector in the past providing this sort of offering and others. What strikes me is whenever I have delivered targeted services for particular groups we had put lots of thought and time into getting the events extremely well advertised in the right places. So summer activities for kids on FSM would of course be sent to every school in the right area, posters in local shops, nurseries, food bank and so on, put on local fb groups. I can't see any justification for not doing this.
Though it can be hard to get you target people to use your services theres ALWAYS been accountability. I've never had a situation where I could have such a low engagement with the project without funding being pulled or a dialoge with the funders about why uptake was so low where it was evidenced everything had been done that could be done to make the events well attended. In that case too, it would be expected that the portion of money used on the failed events would be transparently accounted for and any left over money could be used for another project agreed by the funders or returned.

if the trustees are also directors of companies which the charity is contracting out services to, then this is a potential conflict of interest and should be disclosed in the accounts as a related party transaction.

Late accounts filing will ultimately trigger the attention of charity commission, but this can take a while. i would raised concerns with charity commission if you think trustees are financially benefiting through their involvement as this would likely a breach of their duties.

Ultimately the charity commission has the power to investigate and freeze funds/replace trustees as they see fit.

To add, in the case of the charity I previously mentioned, the Charity Commission investigated but the action it took was to write to the trustees and ‘give advice’. To quote:

“This includes advice around how to prepare annual accounts, and the importance of filing these on time, as well as around managing any conflict of interest.”

Yes this sounds like a huge scam by someone who is good at playing the system. And hiding behind their colour/ race when questioned.
I’d request to have this investigated further but I have no idea how you would do that.
2 children on a summer scheme kicking a ball and having food provided by a company owned by someone also involved in the summer scheme screams fraud.

If you think it's a financial scam report to Action Fraud (police). The charity commission is a civil regulator and does not investigate fraud.

If you have evidence of significant payments going to trustees or unmanaged conflicts of interest then you may get the interest of the charity commission. But they are small and can only really look at high risk/significant issues.

The regulator of CICs is very small and I don't think acts more that a registry of CICs. Not sure it even has much of an investigation resource.