On December 23, 2006, one of Iowa's largest and most successful bingo operations closed down amid an ongoing criminal investigation of the "financial irregularities" that the Boys and Girls Club experienced in Black Hawk County. In an unprecedented move, the Iowa Department of Inspections and Appeals has canceled the charity's gaming license. According to the club's board chairman, the Iowa Division of Criminal Investigation is still looking into the bingo-related losses that total in tens of thousands of dollars.
Board Chairman, Chris Harshbarger, said that the club is still trying to recover from the losses they have suffered. They are looking into accusations that the charity's ex top executive has used the personal funds of the club's credit card and mishandled the uncounted money that came from the bingo games. The former director of the organization, Michelle Gholston, was forced out of office last April because of this incident.
Gholston admitted that she collected unemployment benefits while she was still receiving a salary from the club, but she denies any wrongdoing on her part that could have caused the club's financial disaster. For several years, one of the major resources of profits for the Boys and Girls Club was their bingo games, which were attended by hundreds of players at the Cedar Falls Bingo Hall 4 nights every week. Back in 2001, the club was the most successful bingo operation, earning about $1.3 million in annual gross receipts. But last year, state officials called the attention of the club officials to the fact that they have failed to file their financial statements, which must contain the revenues and expenses of the club.
At that point in time, the board of directors of the organization was in disarray. Only a handful of meetings were held despite the fact that the club spent $200,000 more than they earned that year. The Bingo Games, which had previously been the major source of income for the club and their projects, became a major financial burden. According to Federal tax records, the bingo games were losing around $3,000 per month. Michelle Gholston was hired to operate the club back in 2002, but almost all of the board members said that they were concerned with her performance and the way she ran the club.
Board members also said that she failed to raise the level of profits earned from bingo games. Gholston collected wages of $45,320 in 2005, but according to her, the board never evaluated her performance during her last 3 years of employment. The Board Treasurer, Chuck Shirey said that the board spoke to Gholston about her needing to find employment elsewhere.
At the time that Gholston was forced out of her position, the state officials were already pressuring the club to file financial reports on their bingo games. Telisa Burt, Head of the Boys and Girls Club Board, resigned in order to accept a job in the federal government, and in June, the state launched a criminal investigation of the case, even issuing a subpoena for the organization's financial statements.
Club officials then surrendered 7 boxes of documents, and in September, the Department of Inspections and Appeals notified the club that their charitable gambling license was being canceled. The cancellation is now being appealed by club officials, saying that many violations, including the alleged money transfer from the bingo account to an unidentified checking account, as well as the alleged failure to pay the "only legal expenses" from the bingo accounts.
Last July, a new Board of Directors took over the operation of the charity, led by Chris Harshbarger, a business executive from Waterloo. At a recent state hearing, Harshbarger said that a lot of issues were dug out after Gholston was forced out of office.
These issues are:
1.) There are about $184,000 in overdue bills dating back to 2004. Gholston allegedly issued some checks to pay the bills, but she did not mail them to the person concerned. This is a charge that Gholston vehemently denies.
2.) The Boys and Girls Club records also indicate that Gholston used the club's credit card to buy $2,500 worth in personal shopping expenses, but failed to reimburse the club. Gholston denies this charge, stating that she indeed used the credit card to make some personal purchases, but she repaid the club.
3.) Harshbarger also claimed that some club employees saw Gholston go to the bingo hall many times and leave with loads of cash. Yet Gholston said that the employees' allegations are just lies.
4.) A computer that contains e-mails and the financial records of the Boys and Girls Club was stolen in 2005 and never found. The club also could not locate a considerable amount of goods that were donated by a businessman from the Waterloo area. Gholston said that she is not responsible for those problems.
5.) Some of the financial records submitted to the state officials by the club also appeared to have been tampered with. The 2 employees that were responsible for the said tampering are Mr. Meeks and Mr. Neelans. Neither of the men aired their statements at the state hearing, nor could they be reached for comment. State Records show that 29 year-old Meeks is a convicted criminal. He has been convicted of different offenses like 21 counts of theft, forgery, unauthorized use of credit cards and probation violations. Harshbarger said that they did not know why the club hired Meeks to manage the bingo concession stand. The spokesman for the Iowa Department of Inspections and Appeals, David Werning said that there are no rules regarding employing convicted felons into state-licensed bingo operations.
Monday, January 01, 2007