Tuesday, May 21, 2013
A few weeks ago, a federal judge in California sentenced 58 year-old Christine Daniel to 14 years in federal prison. Daniel, a former doctor and Pentecostal minister, ran a health clinic used to offer Daniel’s “herbal treatments.” Daniel encouraged her cancer patients to stop chemotherapy treatments and charged them hundreds of thousands of dollars for these treatments which she claimed could cure cancer, diabetes, hepatitis, and many other diseases and conditions.
Daniel tried to make her patients believe the clinic was a credible nonprofit organization by telling her patients to classify their payments for “medical services” as donations to the clinic. At trial, prosecutors introduced evidence that Daniel’s failure to report taxable income resulted in tax losses to the government in the amount of $73,895.
It is safe to assume that cancer patients and their families are among some of those most vulnerable people nonprofit organizations seek to help. Consequently, while classifying payments for services as donations in most circumstances may seem a bit alarming, people desperate for life preserving medical treatment may disregard such traditional red flags if doing so means there is an opportunity to try something they believe could save their life or the life of a loved one. Certainly, this conception of the vulnerability of cancer patients isn’t novel. However, what, if anything, can be done within the nonprofit sector to safeguard against people taking advantage of this vulnerability?dab