Charity’s status is in doubt over accounting

Agency is accused of inflating revenue

California Attorney General Xavier Becerra has slapped a cease and desist order on Coconut Creekbased charity Food for the Poor over what it calls skewed revenue figures.

And Becerra is seeking to revoke Food for the Poor’s charity status and is demanding $1,088,000 in penalties. The charity has filed an appeal.

According to the order, the charity inflates values of donated pharmaceuticals on its tax filings.

Food for the Poor is a Christian charity that provides medicine, food and clothing to developing Caribbean, Latin and South American nations.

By highballing its revenue, to the tune of nearly $1.16 billion in 2015, the charity makes itself look good in the eyes of potential donors, according to the order.

“We have done absolutely nothing wrong,” said Angel Aloma, the charity’s executive director. “We have done all our accounting and valuations in a manner that is allowed by law and recognized by best business pratices.”

The majority of Food for the Poor’s revenue is from donated goods — medicine, food and clothing — rather than cash contributions, the order said.

The charity reported $900 million to $1.16 billion in annual revenue from 2012 to 2015. Pharmaceuticals made up 54 percent to 71 percent of that revenue, Becerra said.

Because the charity accepts donations of pharmaceuticals that are near their expiration date and are forbidden from being sold in the United States, the charity must use the foreign market price rather than the “very high U.S. market prices,” Becerra’s cease and desist order said.

The attorney general in California has oversight because Food for the Poor solicits donations from Californians.

One example set forth by Becerra was the sale of the cholesterol medication Simvastatin to Nicaragua in 2012.

The medication was valued at $924,671 by the charity. But it could have been bought in Nicaragua for less than $5,000, the order said.

“The appropriate international market prices for most of the pharmaceuticals at issue were a fraction of the values Food for the Poor reported,” the order said. “Had Food for the Poor used appropriate international market prices to value its pharmaceutical donations, its reported revenue and program expense figures would have been markedly decreased.”

In a prepared statement from Food for the Poor sent via email, the charity said: “Food For The Poor upholds the highest standards of integrity and honesty and rigorously adheres to all accepted financial practices for charities. The cease and desist order arises out of issues that are rooted in accounting principles and expressions of expense allocations, and in no way suggests that Food For The Poor has done anything wrong with respect to programs or donations.”

In Florida, charities and nonprofits are regulated by the state Department of Agriculture and Consumer Services and its Commissioner Alan Putnam. The agency did not return a request for comment Thursday.

Florida Attorney General Pam Bondi has not been involved. Her office also did not return a request for comment.

SUSAN STOCKER/STAFF FILE Food for the Poor is a Christian charity that provides medicine, food and clothing to developing Caribbean, Latin and South American nations.