logo logo
Donate
    • Membership
    • Donate
  • Social Justice
    • Racial Justice
    • Climate Justice
    • Disability Justice
    • Economic Justice
    • Health Justice
    • Immigration
    • LGBTQ+
  • Civic News
  • Nonprofit Leadership
    • Board Governance
    • Equity-Centered Management
    • Finances
    • Fundraising
    • Human Resources
    • Organizational Culture
    • Philanthropy
    • Power Dynamics
    • Strategic Planning
    • Technology
  • CONTENT TYPES
  • Leading Edge Membership
  • Newsletters
  • Webinars

Tangled Financial Lives: Former Nonprofit Hospital and Credit Union CEO Goes to Court

Michael Wyland
April 4, 2017
“Tangled” by Quinn Dombrowski

March 24, 2017; AL.com

The trial of Jonathan Dunning, the former CEO of Birmingham Health Care and Central Alabama Comprehensive Health, has been delayed by a federal magistrate judge who agreed with the defendant that the case is “complex” under federal rules and requires extra preparation time. The ruling moves the trial date from April 6th to June 8th.

NPQ reported the story last year when the 112-count indictment was unsealed involving the alleged diversion of $14 million in federal money to businesses controlled by Dunning. Dunning pled not guilty and was released on $50,000 bond. Since then, the story has only become more complex, “relating to a complex defrauding of the government based upon extensive accounting evidence related to the use of more than 80 bank accounts and loans,” according to the judge’s order. “The government’s investigation lasted two years and involved multiple indictments of other alleged co-conspirators.” That federal investigation has produced 16 CDs of material covering 150,000 pages of documents and 40 grand jury transcripts.

As if the case weren’t complex enough already, another nonprofit entity has been added to the mix. “Defendant’s attorneys have been advised by the United States that there is one entire Credit Union that was a central part to the alleged scheme/conspiracy and all those records will need to be reviewed.” Birmingham Financial Federal Credit Union was taken over by regulators in 2012 and ultimately liquidated and sold. The 501(c)(1) nonprofit credit union had been serving more than 400 employees of Birmingham Health Care. Current and former Birmingham Health Care executives were board members of the credit union, with Dunning serving as board chair. The credit union operated from a building owned by Dunning.

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Federal credit unions, unlike state credit unions, are incorporated by act of Congress under IRS Section 501(c)(1) as “an instrumentality of the United States.” As such, they are not required to apply for federal tax exemption and not required to file an annual Form 990. Instead, they are regulated by the National Credit Union Administration (NCUA), an independent federal agency that charters, supervises, and insures the assets of both federal and state credit unions.

A report to Congress by the NCUA’s Office of Inspector General said the credit union became “insolvent due to management operating the credit union in an unsafe and unsound manner including a serious conflict of interest with the credit union’s sponsor, a continuous lack of action by management to address issues, persistent non-compliance with established timelines for submitting reports, and problems with the credit union’s books and records,” the report stated. A 2012 story noted that the credit union was so small that $200,000 in bad loans wiped out its capital.

Dunning’s story has been going on for close to a decade since he departed as CEO of Birmingham Health Care. Unless the saga becomes yet more complex, it would appear that the convoluted story of alleged federal asset diversion facilitated by multiple conflicts of interest and 80 bank accounts and loans will finally be told in court this summer as both Dunning and the federal government attempt to tell the story and apportion culpability.—Michael Wyland

About the author
Michael Wyland

Michael L. Wyland currently serves as an editorial advisory board member and consulting editor to The Nonprofit Quarterly, with more than 400 articles published since 2012. A partner in the consulting firm of Sumption & Wyland, he has more than thirty years of experience in corporate and government public policy, management, and administration.

More about: Equity-Centered ManagementNonprofit News

Our Voices Are Our Power.

Journalism, nonprofits, and multiracial democracy are under attack. At NPQ, we fight back by sharing stories and essential insights from nonprofit leaders and workers—and we pay every contributor.

Can you help us protect nonprofit voices?

Your support keeps truth alive when it matters most.
Every single dollar makes a difference.

Donate now
logo logo logo logo logo
See comments

You might also like
How to Transform Strategic Planning for Social Justice
Nick Takamine
Learning from a Near-Death Experience: How to Survive a Budget Crisis
Donnie Maclurcan
Merging Missions: Starting with Relationships and Shared Authority
Hoang Murphy
Scaling Impact: How Mergers Can Advance Housing in Communities
Priya Jayachandran
Beyond Shared Vision: Building a Collaborative Road Map
Michael Anderson
Why Legal Fear Shouldn’t Drive DEI Decisions: What Leaders Need to Know
Jennifer Johnson

Upcoming Webinars

Group Created with Sketch.
July 24th, 2:00 pm ET

Organizing in Divided Times

The Relational Infrastructure We Need to Protect Democracy

Register
Group Created with Sketch.
September 24th-25th, 2:00 pm ET

Advanced QuickBooks for Nonprofits

Expert Guidance for Experienced QuickBooks Users

Register

    
You might also like
US Capitol Building
Trump Budget Bill Spells Trouble for Nonprofits
Isaiah Thompson
A group of about two dozen students, many wearing blue shirts, walk in the rain in front of the US House of Representatives.
How Nonprofits and Activists Can Oppose Trump’s “Big...
Matthew Rozsa
Aurelio Diaz Tekpankalli’s allegorical “Liberation through Knowledge” shows people; two large, opened books; and animals.
How to Transform Strategic Planning for Social Justice
Nick Takamine

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

  • About
  • Advertise
  • Careers
  • Contact
  • Copyright
  • Donate
  • Editorial Policy
  • Funders
  • Submissions

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.