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A month after a New York federal judge shut down what lawyers described as a nationwide insurance scam operating out of a suburban Toledo office, Ohio's attorney general has pulled the plug on charitable bingo games linked to the man at the center of the alleged fraud.
Attorney General Jim Petro, in an order this week, revoked the bingo license of the Toledo-based Haukedahl Foundation.
A two-year investigation found that little, if any, proceeds of twice-weekly games at Yorkshire Banquet Hall, 4017 Lagrange St., went to charity and that some games were rigged, the order states.
Charity founder Mark Haukedahl, who is at the center of the insurance fraud allegations, resigned from the foundation's board of trustees March 6, said Bart Haukedahl, who is executive director.
Bart Haukadahl, 36, who is a son of Mark, denied wrongdoing and told The Blade the Haukedahl Foundation plans to file an appeal in Lucas County Common Pleas Court.
"All I've been trying to do is to save the foundation," he said. "I had nothing to do with my father's business."
Mark Haukedahl started the charity in 1989, saying he wanted to assist families of people who suffered head and spinal cord injuries. He made the move after his 15-year-old son was seriously hurt when a Porsche driven by the boy's mother collided with two other vehicles. Todd Haukedahl was comatose for six years and died in 1993. At one point, donation canisters bearing photos of the handsome prep school student were placed in stores throughout northwest Ohio.
More recently, however, the IRS-approved charity has depended on bingo proceeds.
Despite the charity's avowed mission, it distributed just $500 in aid in 2002 and nothing in 2003, said Michelle Gatchell, a spokesman for Mr. Petro's office. She declined comment when asked if additional action is contemplated against the charity.
The foundation had revenues of $1.5 million in 2002, according to a report it submitted to the IRS for 2002, which was the most recent year available. After deducting direct expenses, it was left with about $160,000. More than half of that was used to pay employee wages and benefits ($61,000) and management fees ($27,000).
Bart Haukedahl conceded to The Blade that the charity distributed little aid the past two years but attributed that to heavy expenses arising from needed repairs at its bingo hall, which was purchased by the foundation in 1999.
There were claims that a former bingo worker helped friends pick winning instant tickets by steering them to boxes in which only a few tickets remained and which still contained $500 winners, he said.
"Nothing was proven," Mr. Haukedahl said.
"Nothing like that has happened in the last five years since I've been here. I've done my best to make sure laws were followed."
Bingo games went on as normal Tuesday and Wednesday this week. They must end as soon as the charity is served with the notice of the license revocation, according to Mr. Petro's spokesman, who said the state has had trouble finding a representative to notify.
The order was issued after the charity asked for, and then declined to attend, a hearing on the matter March 31.
It isn't the Haukedahl Foundation's first brush with controversy.
In 1994, the FBI identified the organization as one of several charities that provided kickbacks to a union official at Chrysler Corp.'s Toledo Jeep Assembly Plant after he arranged donations from an employee charity fund.
The Haukedahl Foundation wasn't charged, although the union official was convicted of theft from a labor union.
Until a few weeks ago, the charity shared offices with Mark Haukedahl's businesses on Spring Valley Drive in Springfield Township. The businesses have since closed.
Bart Haukedahl said he hasn't spoken with his father in three weeks and is unsure where he is. A woman who answered the phone yesterday at Mark Haukedahl's house in the Dominican Republic said he had just left and promised to relay a message. He didn't return the call.
Up to 1,600 real estate agents, appraisers, and inspectors nationwide have been scrambling to find professional liability insurance after U.S. Judge Jed Rakoff last month shut down Mark Haukedahl's American Real Estate Association, Noble Group, and other operations.
Problems with the Haukedahl firms were brought to light in a civil lawsuit in federal court in New York brought by the U.S. Small Business Administration over an unpaid insurance claim.
The firms claimed to arrange discounted insurance.
The SBA, in suits against American Real Estate and Mark Haukedahl, alleged that the insurance coverage was bogus.
Lawyers said Mr. Haukedahl paid small claims to keep the scheme going while pocketing much of the premium money.
Mark Haukedahl has denied wrongdoing, but has been ordered to pay $2.4 million to a receiver overseeing liquidation of a defunct firm that was damaged by the alleged scheme.
No criminal charges have been filed.
Contact Gary Pakulski at:
or 419-724-6082.24.14675 120.1573