Fraud in the world of non-profit organizations and charities is a particularly abhorrent type of evil as it prays on the kindness of people and makes tapping into that kindness more difficult for legitimate charitable efforts. Non-profit health care fraud is even worse as it can involve important issues related to an individual's long-term quality of life. Investigating and combating such fraud is an important skill. This article will help you acquire those skills.

LEGAL BACKDROP

In the United States, both state and federal law govern the formal establishment of non-profit entities. In order to do business within a given state, non-profit organizations must either be incorporated within that state or incorporated within another state and registered as a "foreign" corporation doing business within that state. In order to determine whether an entity meets those prerequisites, you can do a name search on your secretary of state's web site (simply type "secretary or state [your state]" in any web search engine such as google). Most states now have comprehensive online databases that can be searched by the public, for reasons just like this. If your state is still in the dark ages, contact your secretary of state directly and ask that the name be searched.

Obviously, if the organization is not listed, then a red flag exists. Also, the name might be found, but registered as a for-profit rather than a non-profit, resulting in another red flag. Finally, you need to be sure that the people you are dealing with are the same as the people who registered. The best way to do this to compare information recorded with the secretary of state with the information you already know. For example, the incorporation documents will include names and addresses of the incorporating parties and the address of the entity. If those don't match up with the information you have been given or have uncovered yourself, then you need to follow up.

In addition to being incorporated or registered as a non-profit within your state, most non-profits will also seek federal recognition as a tax-exempt charitable entity. A small charity might not be at this level yet, but if you want to deduct a donation on your federal income tax return, you better make sure the charity is federally recognized. In addition, if the entity you are suspicious of is representing themselves as a large organization operating on a statewide, regional, or national level, then they should be federally

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