The charity Gospel for Asia was recently hit by a class action lawsuit accusing it of improperly using over $100 million in donated funds. According to the Gospel for Asia Class Action lawsuit, Morrison started tracking down previous donors to the charity when he heard from former staff members in the U.S. The lawsuit claims that the charity used the donations to buy things like vacations and clothes for its staff, which it failed to report to donors. In addition, the suit claims that the charity did not properly track and report its spending on these personal items. Additionally, the charity did not account for how much money it was spending on each item and did not make a complete list of every item purchased. As a result, the court found that the charity had spent over $100 million on items for its staff without reporting all the expenses.
The charity then turned to an American law firm to help it deal with the crisis. According to Gospel for Asia’s lawyer, it is the first time that an organization has sued an anonymous donor over improperly using Canadian funds. The charity plans to hold a training session for its staff where it will train members on how to properly use Canadian charities. Additionally, the group plans to hold a forum wherein board members from various Diaspora communities in India will meet with the executives of Gospel for Asia to discuss the lawsuit. The lawsuit claims that the charity failed to properly investigate the use of Canadian funds, which violates the Gifts From Nations Act.
The lawsuit claims that Gospel for Asia did not take reasonable precautions to ensure that the funds were properly used. For example, it did not have policies in place that required the use of a tendering process to determine who would get the donated funds. Also, the charity did not follow up on its use of the funds by checking on the accuracy of the tenders to determine if the settlement funds were actually held by the organization. Gospel for Asia also did not have adequate controls in place to ensure that the settlement funds were distributed in a timely manner and in an ethical manner.
If you’re part of the Gospel for Asia Class Action Lawsuit, you will want to learn more about the ways that the charity could use monies received from the monies in the Canadian court case. First, Gospel for Asia knew that it had to raise funds from the monies received from the Canada donors. Second, it did not have adequate policies and procedures in place to track and record the monies it received. Third, it did not have sufficient safeguards in place to ensure that the monies were only being spent on activities that served the purposes of the charity. Lastly, it did not have adequate policies and procedures in place to ensure that the monies were used in a manner consistent with the stated purposes of the charity.
When the plaintiff and his counsel learned about the Canadian conduct that caused Gospel for Asia to fail within the stipulated time frame, they immediately brought this cause of action against the Canadian defendant. Gospel for Asia lost on all counts and its attorneys settled the case without seeking certification from the Supreme Court of Canada. This was despite the fact that Gospel for Asia had a very strong case that was rooted in fraud claims that it was a charitable organization under the Canada laws. Had the Board of Directors of Gospel for Asia taken the time to address these deficiencies in advance of filing their Class Action Lawsuit against the defendant, they could have been allowed to seek certification from the Supreme Court of Canada. The Court would have granted certifications to numerous organizations that had been involved in similar lawsuits as Gospel for Asia.
Through its efforts in Canada, Gospel for Asia was able to expose the real nature of the fraudulent activities of Canadian companies working offshore through the use of donations. While the fraudulent conduct may never have occurred through donations, the real loss suffered by the charity is therefore the responsibility of the Canadian defendants. In addition, the charities were required to compensate their injured staff members for the loss of income and for the potential loss of future work opportunities. This represents another potential benefit of class action lawsuits: they allow victims of corporate crimes to recover damages not only through monetary compensation but through an educational program that teaches corporations and their employees the importance of avoiding such acts in the first place.