State regulators are investigating a consortium of Atlanta-area charities which, according to a federal indictment handed down in Boston, received $1.2 million in an elaborate kickback scheme against Bank of America.
No one from the charities – Young Girlz & Boyz Foundation, DayDreamers Co. and Yielding Opportunities for Underprivileged Minors Education – has been charged with a crime.
But criminal charges against a former Bank of America senior vice president, Palestine "Pam" Ace, and her husband, Jonathan Ace, say the Massachusetts couple transferred hundreds of thousands of dollars from the bank's marketing budget to the three Georgia groups, with most of the money used for personal expenses, not charity work.
An organizer of the charities, identified only as "Person B," is a relative of the Aces, according to the indictment.
Taressa Hightower, president of Young Girlz & Boyz, based in Gwinnett County, declined to talk to a reporter about the case. Her attorney, Jay Strongwater, said in an email that "the charities are legitimate entities which did charitable work through the principals. The case remains open against those defendants so it is not appropriate to make any further comment at this time."
Georgia Secretary of State Brian Kemp's office wants to know what, exactly, the groups have been doing. They share a website that seeks donations to help "underprivileged and unfortunate youth," but none of them are registered as charities with the state.
Kemp's office launched its own investigation a few weeks after the May 9 indictment, according to Ryan Germany, general counsel and assistant commissioner of the Securities & Charities division.
The case started in Boston, where the Aces and another person, Brianna Forde, stand accused of a kickback scheme that embezzled $2.7 million from the bank's marketing budget, funneling the money in and out of nonprofits that work with disadvantaged youth, according to the charges from a Massachusetts federal grand jury. Pam Ace, a former senior vice president in Bank of America's Global Wealth and Investment Management division in Boston, wasn't authorized to make such donations, but she did so in about 75 transactions of less than $50,000 a piece, the grand jury charged.
The indictment portrays most of the charities as unwitting pawns, convinced that they had to pay back a portion of the donations – usually half – if they wanted the money to keep flowing.
Or, they faced intimidation and threats of public humiliation. That's what happened to the director of an unnamed Atlanta nonprofit that helps children facing HIV/AIDS, who Jonathan Ace allegedly threatened with the release of embarrassing recordings and photographs, according to the charges.
But the indictment's description of three other Atlanta charities is more critical, describing them as "purported" nonprofit organizations and saying two of them were created at the urging of the Aces:
Between approximately November 2010 and March 2015, (Pam Ace) caused (Bank of America) to transfer a total of approximately $655,000 to Person B and Young Girlz & Boyz. Thereafter, at (Pam Ace's) and (Jonathan Ace's) urging, Person B's family members created DayDreamers and Yielding Opportunities in Georgia. Between approximately January 2012 and January 2015, (Pam Ace) caused a total of $323,000 to be transferred to DayDreamers and $242,000 to Yielding Opportunities. Prior to each transfer, (Pam Ace) instructed Person B to submit an invoice to (Bank of America) for a particular amount of funds.
According to the charities' website, all three fall under the umbrella of the Sabreen "Janel" Bullock Foundation Group. Taressa Hightower is that group's CEO. The foundation's website offers $250 to $500 scholarships for high school seniors with a deceased parent. A list of past events includes backpack giveaways, toy drives, Christmas parties, a WNBA Atlanta Dream Kids Day and a feed the homeless project.
But the Boston indictment says little of the $1.2 million went to such programs:
For the most part, Person B and her other family members used the funds for personal expenses and not charity work. After receiving the money from (Bank of America), Person B withdrew about twenty-five percent of the donated funds in cash and for the most part either gave the money directly to (Jonathan Ace) or deposited the cash into (a California relative's) account.
The Aces used their portion of the embezzled money to support their lifestyle, including lavish birthday parties and Jonathan Ace's purchase of a $17,000 Kawasaki motorcycle, the indictment says.