Former President of National Charity Arrested and Charged in $4 Million Fraud and Money Laundering Scheme
|U.S. Attorney’s Office October 21, 2013|
PORTLAND, OR—Amanda Marshall, U.S. Attorney for the District of Oregon, today announced the arrest of Beaverton resident Brian J. Brown, 56, former president of National Relief Charities, and the unsealing of an indictment charging Brown with conspiring to defraud National Relief Charities of $4 million and conspiring to commit money laundering violations with the proceeds of the fraud scheme. FBI and IRS agents arrested Brown Sunday morning, October 20, at Portland International Airport as Brown returned to the United States from Thailand and Japan.
The indictment, returned under seal on October 9, alleges that in late 2005, when Brown stepped down as the president of National Relief Charities, a national charity dedicated to improving the quality of life for Native Americans, he established a nonprofit company called Charity One Inc., dba American Indian Education Endowment Fund. Brown then allegedly induced National Relief Charities to fund Charity One Inc. with $4 million from 2006 through 2009, which Brown represented would be used to fund educational scholarships for Native Americans. Instead, Brown and unnamed coconspirators allegedly used the entire $4 million for their personal benefit.
The indictment further alleges that Brown established the principal office for Charity One Inc. in Beaverton, Oregon, and that National Relief Charities, which also maintained an office in Beaverton, mailed monthly checks for $100,000 or $200,000 from its offices in Beaverton, Oregon, and in Sherman, Texas, to Charity One Inc. To facilitate the fraud scheme, Brown allegedly gave National Relief Charities false financial statements showing Charity One Inc. was properly using the money.
Brown appeared today before U.S. Magistrate Judge Dennis J. Hubel and entered not guilty pleas to the charges. Magistrate Judge Hubel released Brown pending trial subject to release conditions including surrendering his passport to the federal Pretrial Services office and GPS monitoring. Brown’s trial is scheduled to begin on December 17, 2013, before U.S. District Judge Michael H. Simon.
“Anyone who defrauds a charity for their own personal gain should expect to be found, caught, and prosecuted. This conduct harms the charity, its donors, and, most importantly, the intended recipients of the fraudulently diverted funds,” said U.S. Attorney Marshall.
This case is being investigated by the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service. Assistant U.S. Attorney Seth D. Uram is handling the prosecution of the case.