Nonprofit Foundation– victimized by charismatic criminal

Mouli Cohen – Convicted of 31 Counts – The Vanguard Foundation

You may find it surprising how vulnerable nonprofit boards are to charismatic promises and how often banks fail to approach boards with concerns. When petty financial impropriety takes place the board is under pressure to simply terminate the employee.

  • It may not have involved enough money to try to retrieve the funds
  • The employee may no longer have the funds;
  • Considerations of negation public perception leads many boards to write off the sum and move toward better financial procedures.

However, in cases where the amounts are large enough, when federal charges apply or when the issue is widespread and involves members of the public, the organization will have no choice but to disclose the issue. When the issue is significant enough to force an organization out of business, criminal charges are likely.

A spectacular example where financial clues could have prompted board and donor notice took place on the West Coast with the Vanguard Public Foundation (not the Vanguard Charitable Fund) incorporated in 1972. According to Blue Avocado, the Vanguard operated in a manner consistent with its mission of social justice and equality until its 2002 connection with now-disgraced entrepreneur, Samuel “Mouli” Cohen (1).

Cohen’s tenure continued despite the presence of obvious red flags:

  • Promises for returns that were too good to be true;
  • Horrendous operating losses;
  • 2007 financial statements showing assets were a fraction of its liabilities;
  • Loans to the organization by officers and directors (1,2) a major red flag.

In retrospect, we know that these activities continued apparently unchecked by Vanguard’s board, and apparently unnoticed by donors or their auditors.

On August 10th, 2010, The Chronicle of Philanthropy reported that Mr. Cohen was indicted for defrauding the foundation of some $30 million (3).  Part II of the Blue Avocado feature story noted 19 counts of wire fraud and 13 counts of money laundering (Cohen, Sept. 2010). This is a story about financial malfeasance, the strong influences of a charismatic man making promises of great investment returns and the silence of folks who should have known better.

On November 12th, 2011 Blue Avocado reported that Mr. Cohen was convicted on 31 counts including money laundering and tax evasion (4). It is a sad post script to an organization that fell victim to a smooth talking criminal.

Here is the verdict: Mouli Cohen Jury Verdict


1 Cohen, Rick (August 3rd, 2010) Blue Avocado, Decline and Fall of the Vanguard Foundation, accessed February 2011 at:

Newsupdates (August 10, 2010) Philanthropy Today, The Chronicle of Philanthropy, Calif. Businessman Charged with Defrauding Nonprofit Fund, accessed February 2011 at:

3 Cohen, Rick (September 27, 2010) Blue Avocado, How Did this Happen? Part II of the Vanguard Foundation Story, accessed February 2011 at:

 Blue Avocado Investigates (November 12, 2011) Vanguard Foundation Update, accessed November at:

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