Legal & Courts  December 6, 2022

Denver Foundation caught $350K forgery and fraud, lawsuit says

Editor’s note: This report first appeared at BusinessDen, a BizWest news partner.

By the late summer of 2021, The Denver Foundation knew something was wrong.

For three years, the prominent nonprofit had been sending grant money to Impact Local, which claimed to help the homeless. It gave $125,000 in 2019 and $140,000 the next year. By 2021, it was sending $10,000 monthly and bought Impact Local a $44,000 van.

But in August 2021, the foundation took a closer look at the IRS letter that Impact Local had provided as proof it was a legitimate nonprofit. And it found a forgery.

The purported charity, which also called itself Impact Locally and the Impact Network, was using the employer identification number of a different Denver nonprofit that was called the Impact Network before it shut down in 2018, The Denver Foundation determined.

The internal investigation that followed included interviews with two former Impact Local employees who told the foundation that Travis Singhaus, the CEO of Impact Local, was spending The Denver Foundation’s grant money on personal expenses. That $44,000 for a van? It bought Singhaus a new Toyota 4Runner, the foundation was told.

The Denver Foundation suspended its monthly payments to Singhaus’s charity and, on Nov. 18, 2021, handed the results of its investigation over to the Attorney General’s Office. Within a day, that office had sent it to the Denver District Attorney’s Office for criminal investigation.

Singhaus, 48, was arrested two months later at Denver International Airport and charged with eight felony counts related to fraud, forgery and impersonation. Prosecutors say he made off with $349,000. He has pleaded not guilty and is awaiting trial, court records show.

“This certainly heightens our internal processes to make sure that we’re somewhat bulletproof in terms of making sure that we’ve thought through the thing sideways,” said Dan Lee, chief financial officer at The Denver Foundation, in an interview last week.

“Verification is not just a one-time thing; it’s an ongoing process,” he added.

Details of the foundation’s investigation, which have not previously been reported, are contained in a lawsuit filed Nov. 23 in Denver District Court. The foundation is suing its insurance company, Philadelphia Indemnity, for refusing to cover the money it lost in the scam.

Philadelphia Indemnity’s spokespeople did not respond to a request for comment.

The Denver Foundation believes the loss should be covered by its computer fraud insurance policy. According to its lawsuit, Philadelphia Indemnity believes the loss was not due to computer fraud because an employee of the foundation sent the money to Singhaus.

Though the lawsuit centers on an ordinary insurance dispute, it reveals how a major Denver nonprofit caught and brought down an accused fraudster. The Denver Foundation had not previously been publicly named in connection with Singhaus.

The Singhaus case had an effect on the foundation. Lee said it no longer accepts IRS documents directly from prospective grant recipients; it now gets them from the IRS.

“We’re pretty diligent in terms of the vetting process, because we are a funder that distributes grants to the community. We’re very cognizant of the critical importance of making sure that whoever is receiving grants is vetted and a federal 501(c)(3),” he said.

“The victim in this was really the community,” Lee added. “Those grant dollars were not directed to what was intended by the donor to really help their community.”

Editor’s note: This report first appeared at BusinessDen, a BizWest news partner.

By the late summer of 2021, The Denver Foundation knew something was wrong.

For three years, the prominent nonprofit had been sending grant money to Impact Local, which claimed to help the homeless. It gave $125,000 in 2019 and $140,000 the next year. By 2021, it was sending $10,000 monthly and bought Impact Local a $44,000 van.

But in August 2021, the foundation took a closer look at the IRS letter that Impact Local had provided as proof it was a legitimate nonprofit. And it found a forgery.

The purported charity, which…