Jason had been a volunteer for some time before joining the board of directors. This was his first year with a significant role in the annual festival and the financial operations of the community center. Admittedly, Jason was not aware of how tight the finances of the PHCA were since the departure of several high-level fundraisers from the board due to a prior conflict with the same board members that would cause the new conflict. At the time Jason first joined the board, the PHCA had what one would consider a reasonable overhead. However, with little to no income it became clear that the current direction was not going to work. Expenses were high. The Executive Director Stephanie Serda’s salary was $42,000, and the husband of board member Elisa Rodriguez received a raise that paid him $12 per hour for 30-40 hours a week as the janitor. He was also contracted to mow the lawn for what was approximately $80 per mow twice a week. Then there were 2-3 employees that were paid $8-10 per hour for about 15-20 hours a week. It would be safe to say that total expenses were an average of $8k-$10k per month. Most of these expenses would have been covered by a grant in 2011 and withdrawals from an endowment fund that allowed an annual disbursement between $16k-$20k. The community center was losing thousands of dollars a month with no grants coming in and its only income was earned from gym rentals by the Toledo Sport and Social Club. A cost savings audit needed to be done.
The first thing that came to mind was how there was a need for a janitor for 30-40 hours a week when the community center was only open for 20-25. Conveniently, everyone at the PHCA had their own security code with the alarm company. After requesting alarm records it was discovered that the “janitor” was only in the building for an average of 10 hours per week. Stephanie Serda terminated the job and we went to volunteering for cleaning. The “janitor” then decided he had fulfilled his lawn mowing for the season and quit. For some reason, he was paid in advance for the whole season. At this time board member Elisa Rodriguez resigned from the board of directors for personal reasons. The board decided to cut its losses and not pursue any charges against the janitor/lawn care man for the discrepancies (Sep 2012 PHCA Meeting Minutes, blue highlight). The board discussed purchasing a commercial lawn mower rather than paying a company to save money for the future. Jason and Stephanie approached the bank to apply for a loan based on the need for equipment (Sep 2012 PHCA Meeting Minutes, blue highlight). The bank informed them that there was a credit card in default from Sam’s Club that was registered in the name of the PHCA but the bill was being sent to the home of Elisa Rodriguez, the former board member who recently resigned. After requesting the records from the collection agency, the PHCA discovered that the credit card was used to buy a large swing set and a large grill located at the Rodriguez home. The PHCA contacted Ms. Rodriguez.
Once again the PHCA board of Directors chose not to take legal action. Ms. Rodriguez eventually paid the bill stating she accidentally used the card. This was odd in that the bill was going to her home, a few payments were made, and Anita and Stephanie Serda stated they did not know of the existence of this card. These statements become important during Jason’s investigation and trial.
Money was desperately needed for the PHCA and Jason came with several small fundraisers. The major one being the motivation for the charges against him. eBay! eBay was wonderful for nonprofit organizations because it did not charge listing or seller fees and PayPal had a program also to save nonprofits. All you had to do was sign up for Mission Fish. Jason signed the PHCA up as a seller and a trading assistant enabling the PHCA the chance to sell for other people while charging a 5% commission on what they sold. It would not have made a fortune, but a few thousand a month was the goal.
After the audit, Jason informed the board that the PHCA would not have any money after April or May of 2013. Jason came up with a plan to sell a product called Visalus. What was Visalus? Visalus is a weight loss company that offers several products with the main one being shakes. Jason, Kristie, and their real estate business partner Dawid had been selling Visalus as a side income (Kristie since 2011, Jason since 2011, and Dawid since 2012). It was a multi-level marketing company that many hated, but it was worth a try.