It’s been a year and two months since my “Peyton Manning” neck surgery went wrong. Intubation problems led to a lack of oxygen that led to 6-7 mini strokes. I was left cognitively impaired with memory loss and loss of executive function. When I realized I could no longer work as an investigative journalist, I crashed into the wall of depression. Other health complications prevented any malpractice complaints. I’ve recovered to this point, of trying to work and write again. It’s like trying to be a one-woman newsroom in the early stages of dementia. Moreover, I was hugely intimidated and terrified of the huge workload I imagined because I can’t think, organize and write like before.
It’s now time to release 11 years of findings after investigating, documenting and exposing five cases of nonprofit corruption.
Imagine you’re juggling the juiciest scenes from “The Fugitive,” “Wolf of Wall Street," “Human Trafficking” and “Men Who Stare at Goats.” You are in an office that smells like coffee and is wallpapered with black and white tax returns, meeting minutes, court papers, depositions and other documents meant to stay hidden.
Instead of movie stars, rump thumping soundtracks and sexy story lines woven through dark and dangerous three letter agencies, all of this is real.
I was recently digging through some files and found a paper I’d written years ago about structuring my articles. Then I found that I’d already organized the data needed for two of the more boring cases.
Who knew the Shriners have a secret sex club, the Royal Order of Jesters?
The Shriners are those retired gentlemen in red Fezzes who drive goofy cars in parades to raise awareness for their children’s hospitals. One must be a secretly invited Shriner before joining the Jesters. One must first be a Master Mason before joining groups like the Scottish Rite, the Knights Templar and the Shriners.
The Jesters got a letter from Lois Lerner, former director of IRS Exempt Organization applications, authorizing their 501(c)(3) “museum.” Pulling this thread, the Jesters’ nonprofit status unravels towards Congressional committees already investigating Lerner and the IRS. Congress found her in contempt after she took the Fifth and refused to answer questions about targeting Tea Party-type nonprofit applications.
Or maybe she doesn’t want to answer questions about nonprofit corruption on her watch?
Or worse, what if she had no idea?
Either way, being selective or clueless is no way to run the IRS.
This is why these cases are so important because all us taxpayers pay so these guys can play.
A nonprofit group is exempt from certain taxes in exchange for providing a benefit to society. In these cases, these are those who are willfully defrauding the IRS and are harming each and every taxpayer for their personal benefit and gain.
This “reveal” process will take place over the next few weeks as articles spell out these cases:
- Shriners’ PermaDerm™ study, so bad the FDA shut it down. Victims include University of Cincinnati, DoD AFIRM program, FDA, NIH, donors and the 150 burned children used as guinea pigs in the Shriners' failed study.
- DoD applications based on bad data. Also filed with SEC, FDA and UC.
- Indiana Board of Tax Review denied Jesters property tax exemption appeal because they failed to prove they qualified for 501(c) (3) status. HQ building reclassified “commercial.” IRS not notified.
- Jesters sexcapades at taxpayers’ expense as costs of human trafficking and prostitution are written off on nonprofit tax returns.
- “Excess benefit transactions” by retired CIA trained spies. Nonprofit assets allegedly used in for-profit business. IRS not notified.
The worst is the PermaDerm™ scandal.
The Shriners used 150 little burned kids in a 20-year study so bad the FDA shut it down. Doctors tried to develop a cultured skin substitute for burn patients, growing a stamp size piece of their own skin to typing paper size to graft onto their own burn sites.
The FDA inspected Shriners' burn hospitals in both Sacramento and Cincinnati and, in January 2007, issued a series of “Warning Letters.” An “Integrity Hold” letter next shut the study down. Dr. Steven Boyce, study director and biologist, somehow managed to qualify for and enter a military regenerative medicine program called AFIRM. Boyce could now use burned soldiers as guinea pigs for PermaDerm™ because his Shriners’ data was useless.
This is why AFIRM gave Lonza the $18 million contract, to come up with the protocols for a PermaDerm™ study at Fort Sam Houston.
In 2010, a marketing company named Regenicin popped up, ready to hook up with bio-pharma giant Lonza and slide PermaDerm™ through the FDA approval process towards a $3 billion market. FDA approval, even provisional approval, would mean millions for a handful of insiders.
Then Regenicin went public.
This is why the misleading and inaccurate SEC filings matter.
Serious courtroom drama began after Regenicin CEO Randy McCoy sued the company’s president Joe Connell and got rid of him before Lonza secured the $18 million DoD contract. Connell is like Harrison Ford as the innocent Dr.Richard Kimball in “The Fugitive.” He was in the right place at the right time with the big next thing. Then McCoy sued him after seven years of “partnership.” Here's the human cost of corporate greed, using a partner to do the heavy lifting, then getting rid of them. But Connell might want to be thankful, though he was victimized and ruined professionally, because he’s not associated with the following.
Here is the smoking gun.
Two invalid patients were used to get an $18 million DoD contract for PermaDerm™.
Why am I leading with this story?
After the FDA shut down the Shriners’ PermaDerm ™ study, the agency ordered an audit. It took a year and reported that study data from patients 130 and 131 violated FDA rules and regulations. These two patients were used as the only examples in DoD grant and contract applications that were also submitted to the SEC as Regenicin “pumped” the military’s interest in PermaDerm™. It’s also possible that Lonza may have been used to set up a possible pump and dump of Regenicin stock some time in 2011.
“PermaDerm™ Timeline, Shriners Skin Study Audit Findings” can be read here.
The timing for all this is perfect.
The FBI recently reported that an alleged pump and dumper named AJ Discala was indicted and arrested for defrauding companies of millions while masterminding a $300 million securities scam.
The SEC complaint naming Discala is here.
Discala is also CEO of the Broadsmoore Group, the same that invested in Regenicin, the marketing company self-tasked with obtaining FDA approval for PermaDerm™. Ten counts charge Discala and six others with securities fraud, wire fraud, conspiracy to commit securities fraud and mail fraud. One of the defendants is an attorney who helped file court documents against Joe Connell.
What if Discala is singing about McCoy and Regenicin to the Feds and the SEC? Nearly every article about this reports that Discala was married to Jamie Lynn Sigler, best known for playing Tony Soprano’s daughter Meadow for the entire duration of the HBO smash from 1999 to the finale in 2007. From Marketwatch.com “The Sopranos often crossed thematically into the investment world, with one pump-and-dump scam the subject of several episodes.”
Now that the FBI and SEC are on board, other agencies would probably appreciate evidence that these DoD grant and contract applications were based on bad data. Like the U.S. Army Medical Department Southern Regional Medical Command (SRMC) Office of the Inspector General.
My next article will spell out specific audit findings, grant application data and the specific FDA violations for patients 130 and 131.
The next three cases spawn from the Shriners’ nonprofit secret sex group, the Royal Order of Jesters.
The first involves the Jesters convincing Lois Lerner to approve their 501(c)(3) “museum.” After Lerner signed their approval letter, the Jesters used it to apply for property tax exemption. The Marion county assessor found the “museum” did not meet the standards for exemption, so the Jesters appealed to the state tax board. The Jesters lost their appeal after attorneys for the state proved they did not qualify for 501(c)(3) status. This should have been reported to the IRS and was not.
If PermaDerm™ is the most unethical scandal, the next is the sleaziest.
In 2006, nineteen Jesters were called to testify about their knowledge of sex with underage prostitutes while on fishing trips to the Amazon. Five girls went to the Brazilian Federal Police, reporting that they’d been lured into working for a man named “Richard” on his fishing boat. They found themselves drunk with North American fishermen who traveled to Brazil for sex with minors, more commonly known as child sex tourism.
This part of the Jester investigation focuses on a former tour operator named Richard Schair. He is currently being prosecuted in Brazil for related crimes. Four Brazilian women are suing Schair in Gainesville GA federal court under the Trafficking Victims Protection Act.
We’ll cover this in later articles, as well as how a handful of Jesters were busted by the FBI in a human trafficking sting. Those caught getting prostitutes to Jester parties in Canada and Kentucky were a NY State Supreme Court Judge, his law clerk, a retired police captain and an Erie County Sheriff.
Prior to investigating the Shriners, I spent from 2003 to 2006 checking out the nonprofit claims of a bunch of CIA trained spies organized into the International Remote Viewing Association or IRVA.
This is our last case of nonprofit abuse.
Remote viewing or RV is the technology of psychic spying developed in the Army, done through strict and time-tested steps to gain access to information beyond time and space. A viewer is trained to focus systematically and record the information at different stages with a pen and paper. This is done “blind” as the viewer is only given a set of numbers associated with the target. This CIA sponsored program operated for over twenty years. RV movies include “Suspect Zero” and “Men Who Stare at Goats.”
Once the IRVA posted their Lois Lerner 501(c)(3) authorization letter in March 2006, I thought they were finally compliant. A review of recent tax returns shows that years of “excess benefit transactions” were not reported.
This will be explained in the last “Reveal” article because the most basic nonprofit laws prohibit inurement or self benefit.
According to eHow:
IRS Form 990 requires compensation information for certain officers, directors, trustees, key employees and highest-compensated employees. Moreover, the IRS encourages nonprofits to make its directors disclose, in writing, any known financial interest that he or a family member has in any business or other organization that does business with the nonprofit. IRS Tax Exemption Rules on Board Involvement. The IRS encourages the use of boards to provide active oversight of nonprofits, particularly their financial operations. It, however, is concerned about conflicts of interest in which board members receive some excessive financial benefit as a result of their affiliation with the organization. Many organizations are required to file IRS Form 990 each year. The form is similar to a tax return and requires the nonprofit to disclose a great deal about its financial management . Failing to provide honest and timely responses to these questions, which include the questions about the compensation of the board, can result in a nonprofit's loss of tax-exempt status.
Coincidentally, thirty days after the IRVA posted their 501(c)(3) authorization letter, I was contacted by Shriner Whistle-blower Vernon Hill. He had been working with a former IRS agent and they were looking for an investigative journalist interested in “irregular tax returns”
We’re way beyond that now.
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