Allegations of fraud, forgery and misrepresentation are being made against the leader of a nonprofit called Echo Haven.
William "Joe" Gibbs started Echo Haven last year while he and his wife, Denise, still ran the Modesto charity known as the Stanislaus Community Assistance Project. They were fired in December.
The new leaders of SCAP now allege that Joe Gibbs faked documents, forged signatures and lied about Echo Haven's purpose and leadership.
As a result, they contend Echo Haven was able to inappropriately acquire at least seven Northern California homes that were donated by banks or provided at deeply discounted prices. Those homes since have been sold for about $800,000.
Gibbs told The Bee last week that his charity cleared $179,372 in profit from selling those houses. He said his personal salary from Echo Haven last year "was minimal $43,168."
During essentially the same time frame, SCAP paid Gibbs $216,312 for his services.
Exactly what Echo Haven has done with the rest of its money hasn't been made public, but Gibbs said it's being used "to develop affordable housing and to help communities develop things like community gardens."
But documents uncovered by those now running SCAP paint a different picture of Echo Haven. They contend banks transferred homes to Gibbs' new charity based on false representations about its supposed connection to SCAP.
"It was all fraudulent, forged and made up," said Patrick Pokorny, president of Community Impact Central Valley. That's the new name for SCAP.
The FBI raided the Gibbses' Riverbank home and SCAP's Modesto office in December after questions arose about that charity's spending and management of more than $20 million in government grants.
Boxes of documents and computer files seized by the FBI weren't returned to SCAP (now CICV) until the spring. Since then, the charity's new managers have been poring through them.
"It seems like every day we find something new," said Pokorny, who previously had been on SCAP's board of directors.
'Resolution' in question
Among the suspicious documents discovered is a SCAP board "resolution" supposedly authorizing SCAP "staff to provide financial, staffing and logistical resources to Echo Haven in support of their veteran and senior housing development efforts."
That document assured JP Morgan Chase Bank that SCAP would play an active role in Echo Haven "to ensure the required outcomes" for donations it received.
The Chase resolution purportedly was approved by SCAP's board of directors on a 7-0 vote April 18, 2011. The document includes what looks like the signatures of SCAP's board president and vice president.
"I did not sign that document," insisted Darryl Fair, who was SCAP's president at the time. In fact, Fair said, such a resolution could not have been approved by seven board members because there weren't that many directors then.
Five of the six people who were on that board at the time have told The Bee they don't recall ever approving any resolution about Echo Haven. The other former board member could not be reached.
"Let them say whatever they want to say about me," Gibbs told The Bee when asked about the alleged forgeries and fake documents. "If it's going to court, we'll deal with it then."
The validity of that resolution is key because Chase and other banks donate homes all are foreclosed properties only to nonprofits that have been active for several years and can document their charitable history and finances.
Echo Haven was launched in February 2011 and had no track record, so it was ineligible for such donations.
To get around those requirements, Joe Gibbs "sent SCAP's financial documents and wrote a letter to the banks that said SCAP's board had authorized Echo Haven to act on behalf of SCAP," said Thomas Shanks, executive director of Community Impact Central Valley.
"The new (CICV) board feels that if Echo Haven didn't exist, then SCAP would have been the beneficiary of those properties," Shanks explained.
Pokorny said his board plans to take action. "We're going to be filing a lawsuit to recover everything that should have gone to SCAP and all the misdirected funds," he said.
Echo Haven starts
Besides the resolution, Shanks said his staff has found copies of correspondence that they believe Gibbs sent to banks explaining why they should donate houses to Echo Haven instead of SCAP.
One of them states: "For liability and marketing purposes our (SCAP) board thought it would be best if we formed a new nonprofit that was independent of SCAP but run by our staff. So, we formed 'Echo Haven' to specifically address housing issues for veterans and seniors, while SCAP remains focused on people with life-threatening illnesses and disabilities."
That document assured the bank: "Echo Haven is technically independent of SCAP, but it is our staff and resources that will get it up and running these first few years."
In it, Gibbs assured he would personally oversee Echo Haven because he was a military veteran and thus had "a vested interest in the project."
"I hope you will allow Echo Haven to participate in this wonderful program so we can help veterans, seniors and their families," Gibbs wrote to the bank.
That document promised the donated "property will be used to provide supportive housing to veterans and seniors who are homeless or at risk of becoming homeless."
There is no evidence that happened with the seven houses provided to Echo Haven, five from Chase and two from Wells Fargo Bank.
Rather than use those homes to house homeless veterans or seniors, Echo Haven resold them, in some cases to investors and those who paid for them outright with cash.
It sold one house in Napa for $385,000 in April. Echo Haven had paid Wells Fargo $280,000 for that house, but Gibbs contends his charity cleared just $9,000 after paying to fix it up.
To comply with the banks' donation policies, Gibbs said, his charity had to sell the homes to people who earned up to 120 percent of the community's median income.
"It's my understanding that every single one of the people in those houses meets those requirements," said Gibbs, who runs Echo Haven out of his Riverbank home.
Who besides Gibbs is involved in the charity isn't known, and he would not tell The Bee who is on Echo Haven's legally required board of directors.
In a press release Echo Haven posted online last week nothing about helping house homeless veterans or seniors is mentioned. Instead, it describes itself as "a California based nonprofit agency that assists communities to convert empty lots into productive gardens."
Gibbs' veracity about Echo Haven's accomplishments is being challenged by those who have looked into the nonprofit.
In January 2011, when Gibbs filed IRS documents seeking nonprofit status for Echo Haven, he listed himself and two SCAP employees, Caryl Prunty and Kathy Lee, as the charity's officers.
Lee insists she didn't know Gibbs had named her as Echo Haven's treasurer until The Bee showed her IRS documents Oct. 18. After finding out, she said she quickly informed the Internal Revenue Service and state officials about the deception.
"I told them I wanted my name off of it, and they told me, 'It's not a big deal,' " recalled Lee, who remains disappointed by how easy the government has made it to start a charity. "Anybody can open a nonprofit, apparently."
Lee's involvement has become a big deal because digitally generated copies of Lee's and Prunty's signatures have been found on at least three documents that were created to convince Chase's Real Estate Owned Community Revitalization Program and Wells Fargo's REO Property Donation Program to donate houses to Echo Haven.
One of those suspicious documents supposedly was signed Nov. 1.
"I did not sign those documents," insisted Lee, now the top financial officer for Community Impact Central Valley. She said she was shocked when those faked documents were found in the spring. "When I saw that it was my signature, I wanted to throw up."
Prunty, who was fired by SCAP in January, could not be reached by The Bee for comment.
Scanned images of Prunty's and Lee's signatures since have been found in SCAP computers.
Looking at the way their two names are signed on three Echo Haven documents, it becomes obvious they were not original signatures: The three sets of handwriting line up perfectly, proving they are copies.
"Is that illegal?" Gibbs asked when questioned by The Bee about the digitalized signatures embedded onto numerous documents.
Gibbs claims Lee and Prunty were "intimately involved" in Echo Haven. "All three of us did this together," he said.
Lee said that's a lie. "From the very conception of it, everything was forged," she said.
Gibbs claims those now running Community Impact Central Valley "have a vested interest in discrediting me." That's because he is suing that agency for back pay he said he earned as SCAP's director of development and grant writer.
"They owe me $500,000," said Gibbs, explaining that his contract entitled him to 4 percent of the "income and assets I generated for the agency."
"Basically, if they call me a liar and a thief, they think they would not be required to pay me," Gibbs said.
Not only does Shanks not believe Gibbs is owed any additional money, he said Gibbs has been paid too much.
Gibbs' one-page employment contract financially rewarded him for every grant SCAP received. During the 2009-10 fiscal year, Gibbs reportedly earned $627,331 in salary and bonus, but not all of that money has been paid to him.
"It's excessive compensation. That kind of compensation is prohibited in California for nonprofits," said Shanks, who earns $98,000 annually as the agency's executive director.
The Nonprofit Integrity Act, which took effect Jan. 1, 2005, in California says nonprofit compensation must be "just and reasonable." In severe cases, excessive pay can be grounds for the IRS to revoke an organization's tax-exempt status.
Gibbs said his SCAP compensation "got big because I performed really well."
"He's an excellent grant writer," Pokorny agreed. "That's the scary part. Unfortunately, he does it for all the wrong reasons."
Gibbs said numerous negative stories about him published in The Bee since May 2011 have made him seem so "radioactive" that few charities are willing to work with him now.
"You're denying a lot of people the value of my services," Gibbs said. "I like helping people."
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.