New York man launches 76 fake charities: When wolves hide within the flock

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New York man launches 76 fake charities: When wolves hide within the flock

July 12, 2022 - Dr. Ryan Denison

© Artem /stock.adobe.com

© Artem /stock.adobe.com

Ian Hosang is no stranger to illicit activity. He worked with the Gambino crime family in New York during the late 1990s and spent time in prison after being arrested for fraud and money laundering. His sentence was cut short after he helped authorities convict roughly 150 other people, but he’s in trouble again after making more than $150,000 from fraudulent charities that were approved by the IRS.

He started his first fake charity back in 2014, “The American Cancer Society for Children, Inc.” And stealing credibility from the real American Cancer Society would become one of his more common grifts across the following years. But while he had some success early on, things really took off when he began using the IRS’s fast-track approval system.

The new system was intended to streamline the application process for charities in the wake of budget cuts. While it did make approval easier for legitimate charities to obtain, it has also given rise to a wave of scams and fraudulent nonprofit organizations like Hosang’s.

Under the old system, roughly 1 in 53 applicants were denied. Now that number stands at 1 in 2,400, and a 2019 study found that almost half of the approved applicants should have been denied.

Clear red flags like listing “charitable activity” and “need to fill in” under their mission statement went overlooked, and Hosang took advantage. In two years of using the new system, he started fifty-six new charities, many of which shared the same mailbox in Staten Island. The oversight is particularly egregious considering that American Cancer Society for Children, Inc. branches in Michigan, Detroit, Green Bay, and Cleveland were among the fraudulent charities he started during this time that all fed back to that same mailbox.

However, the IRS cannot be blamed entirely for enabling the crimes of Hosang and others who perpetrated similar schemes. The tax laws they are asked to enforce tie their hands in some truly baffling ways. For example, there are no restrictions on people with a criminal history applying for tax-exempt status and, even if someone attempting to commit fraud is caught, the only thing the IRS can really do is deny their application, freeing them up to simply try again.

Additionally, there is nothing in the tax code that prevents different charities from using very similar names, which is how Hosang was able to start so many American Cancer Society groups that had no affiliation with the actual American Cancer Society. In fact, the latter group played a key role in helping to shut down several of Hosang’s fake charities by reaching out to local governments and organizations to let them know about the fraud.

Unfortunately, that approach is unlikely to make much of a dent in the larger problem.

You see, most groups that help to facilitate donations lack the resources to fully vet the charities that they help. As such, they often rely on the IRS-approved list to lend credibility to those groups. But when the gatekeepers allow wolves to hide among the flock, trouble should be expected to follow.

Unfortunately, many communities of faith today suffer for a similar reason.

Wolves within the flock

While I would hope that most of our churches are not a front for greedy and fraudulent people to steal from others—though that is not always the case—one of the most damaging problems our communities of faith can face stems from a resistance to biblical accountability. It can be easy to become so focused on not losing members or turning people off that we enable them in their sin rather than confronting them with it.

Now, there’s a right way and a wrong way to practice that accountability, and we need to be sure we don’t stray into sin while convicting others of their sin. Some of the people with whom Jesus became angriest during his earthly ministry were the religious leaders who practiced such a staunch legalism and were so lacking in grace that they left little room for people to actually be people. But we also don’t see Jesus encounter someone’s sin without calling them to correct it. That balance is what many of our churches struggle to maintain today.

But, as I wrote in How to Bless God by Blessing Others, we can’t accomplish our kingdom mission if we’re more afraid of holding each other accountable than we are of seeing people leave.

Every Christian is empowered and called by the Holy Spirit to help others grow in their walk with the Lord. If we allow sin to go unchecked in our churches because we don’t want to seem judgmental or drive people away, then we’re not fulfilling that part of our calling. We’re allowing wolves to exist among God’s flock, and the end results will be predictably tragic.

So the next time you feel like the Lord is calling you to confront someone about the sin in their life, pray for the courage, grace, and words to do so in a way that draws them back to God. If you do that and they still refuse to recognize their sin or repent of it, then ask God to point out a few others who can go with you to speak with that person again. If they still refuse to repent, then take it to church leadership.

That’s the model Jesus set forward (Matthew 18:15–17), and none of us are exempt from participating in it (after all, leaving that job solely up to those who enjoy confrontation or find pleasure in pointing out the sins of others is not exactly a recipe for success either).

And don’t be surprised if, in the process of holding someone else accountable, they do the same for you. None of us are exempt from sin, and responding with humility in that moment may go a long way toward helping the other person respond well also.

Ian Hosang defrauded countless people because those who were supposed to prevent him from doing so failed to hold him accountable. Let’s not make the same mistake when it comes to the brothers and sisters in the Lord whom we are called to hold accountable as well.

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