Jackson Jambalaya

Update: Apparently Mr. Potts is NOT a CPA. The State Board of Public Accountancy confirmed this afternoon in a telephone call Cullen Potts is not a licensed CPA in Mississippi. Mr. Potts is also not licensed in Tennessee. So it appears a phony CPA ran a scheme with a bingo operation and charity that paid him nearly $300,000. Nice jack if you can get it.

Copy of Cease and Desist Order

The Securities and Charities Division of the Mississippi Secretary of State's office issued a Cease and Desist order on December 1, 2009, against another charity which ran a bingo operation. The Division fined the Union Center/Theo Volunteer Fire Department $354,124 and revoked UCT's charitable exemption after a hearing was held by the Division earlier this year on the charity's actions.

The hearing officer stated the charity was a "non-profit, volunteer fire department" in Corinth, MS and that it "fundraises through a charitable gaming operation known as Corinthian Bingo." The Cease and Desist Order stated UCT paid $20,749 of Corinthian Bingo's expenses. Mississippi law requires a bingo operations' funds should support a charity, not the other way around as apparently happened in this case.

The Order also singled out a Cullen Potts as being a prime beneficiary of the charity's um, donations. It states:

1. UCT paid Mr. Potts, "a CPA", $95,250 to keep the books for both operations and 85% of this for his work on the bingo operation, in violation of the law.
2. The charity overpaid Mr. Potts by $11,639 for other services.
3. UCT "falsified expenses of the fire department" and the total amount of the fictitious expenses was $252,328. The Order further states UCT created these bogus expenses so it could move $252,328 from the charity to Corinthian Bingo in violation of the law while appearing to be in compliance. In other words, UCT committed fraud and the goal of the fraud was to "trick the Mississippi Gaming Commission into renewing UCT's bingo license."
4. UCT's financial statements show that while the money was "never transferred to Corinthian Bingo", they do show the money was given to its accountant, Cullen Potts, "who deposited the money into his personal checking account at Renasant Bank" and that Potts kept the money for himself instead of transferring it to Corinthian Bingo even though the accounts state the money went to the bingo operation.
5. The charity also used its funds to build a fire department on land that belonged to someone else. Hmmm... what kind of kinfolk deal took place in that transaction?

This seems like hypertechnical stuff, after all, who cares about bookkeeping at charities and bingo halls? However, too often charities are used to prey upon good-hearted people who seek to help others but often are taken in by smooth-talking shysters. This is the second Cease and Desist order Mr. Hoseman's office has issued this year to a charity linked to a bingo operation.