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Rip-Off Alert: Director ends up keeping grant money

Reported by: Marie Mortera
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Updated: 10/25/2013 5:38 pm
LAS VEGAS (KSNV -- Plenty can go wrong when one person has too much power in an organization and there’s little or no oversight.

In this Rip-Off Alert from Illinois, a major national organization was swindled out of thousands of dollars.

Margaret Davis was the longtime program director of the National Black Nurses Association.

“There was too much trust placed in this one person … to run the organization,” said U.S. Postal Inspector Basil Demczak, “She was a person everyone trusted. She was the go-to person. She was the one politically connected, and people assumed she would do the right thing. And that’s where things broke down.”

One of Davis’ responsibilities was to apply for grant money. Davis told agencies the money would be used for health care advocacy including student nursing assistance.

“She knew how to write grant applications, and it was very simple for her to do what she has been doing for a long time,” Demczak said. “Then, at one point, she decided to go the wrong way.”

The money started going directly to Davis and an accomplice.

“It was a total of approximately 15 grants, over $1 million dollars in grants, and half a million dollars was diverted to benefit the defendant,” Demczak said. “Typical fashion of what fraudsters do … used it to pay credit cards, personal things, mortgage, family and friends.

They also took “lavish trips at the expense of these student nurses who should have been receiving training.”

Postal inspectors began tracking the case and found many in the Nurses Association were unaware of what has happening.

“People in the organization had no idea these grants were even applied for and awarded in their own organization,” Demczak said.

Inspectors say checks and balances are key for any organization.

“You have to have good segregation of duties, and you have to have oversight on your board,” Demczak said. “Otherwise, things like this happen.”

Davis pleaded guilty to 14 counts of mail fraud and two counts of money laundering. She was sentenced to almost four years in federal prison and ordered to pay more than $370,000 in restitution.


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