By William Patrick | Florida Watchdog
TALLAHASSEE, Fla. — The executive director of a South Florida business group is accused of applying for government support as a nonprofit even after the IRS revoked the group’s tax-exempt status in 2010.
NOT FOR PROFIT: U.S. Housing and Urban Development community grants go to various groups, including nonprofits.
Had government officials, including the Miami-Dade Department of Public Housing and Community Development, only bothered to verify the organization’s nonprofit claims, they would have found the group’s tax designation was canceled for failing to file tax returns since 2006.
PHCD caught on to the alleged scheme in 2012, but not before another $460,000 was approved.
Hilda Hall-Denis, president and executive director of the Business and Technology Development Corporation, a “business incubator,” was arrested Thursday and is facing multiple felony counts relating to the alleged misuse of local and federal funds, including U.S. Housing and Urban Development grants, according to the county’s inspector general.
The arrest comes more than four years after the IRS revoked the nonprofit’s 501(c)(3) status. By that time, BTDC already had taken in hundreds of thousands in taxpayer money. Another $380,000 in Community Block Development Grants and $80,000 in local Community Redevelopment Agency money went to the group after 2010.
“The tax-exempt classification was an essential requirement for both the CBDG funds administered by the County and the Homestead CRA funds,” an IG statement reads.
Hall-Denis is also accused of fraudulently using personal information of business owners being mentored by BTDC, submitting phony receipts and invoices, failing to pay vendors and paying her employees only a percentage of their full salaries.
She even received funding from Florida’s Division of Blind Services for hiring a visually impaired worker. But investigators assert she didn’t fully compensate her blind employee, either, according to the IG statement.
BTDC paid $1 a year in rent courtesy of a subsidized rent program from the city of Homestead.
Watchdog.org independently obtained BTDC’s 2009 IRS tax filing — submitted after the tax-exempt status was stripped —and found Hall-Denis took home nearly $90,000 in direct income, or a third of the organization’s total revenue. That same year BTDC reported a $37,000 loss. In 2008, she made $102,000.
According to the IRS forms, the firm claimed it was providing business development services and technical assistance for seven startup businesses.
The investigation, led by the Miami-Dade Office of the Inspector General and the State Attorney’s Office, found that Hall-Denis tried to obtain another $500,000 grant last year, but the county public housing agency was by then aware of the alleged scheme.
A spokesperson for the inspector general’s office told Watchdog.org the case is an ongoing investigation and no further information could be disclosed.