Sunday, August 18, 2013

Qui Tam Action Claims Hawaii Churches Cheated Schools Out of Millions of Dollars of Rent

In Hawaii, a qui tam whistle blower lawsuit against 5 churches, originally filed under seal in March, was unsealed Aug. 14. The complaint (full text with press release) in State of Hawaii ex rel. Kahle and Huber v. New Hope International Ministries, (HI Cir. Ct., filed 3/22/2013), contends that the churches submitted false records and statements to deprive Hawaii schools of $5.6 million in unpaid or underpaid rent and utility charges for weekend use of school buildings, parking lots and facilities over the past 6 years. The churches routinely under reported the length of time they were using facilities and the extent of use.  The suit asks for treble damages and civil penalties on behalf of the state. Under HRS 661.27, plaintiffs if successful in the action, are entitled to 15% to 25% of proceeds of the lawsuit.  In their press release, the two individuals who filed the lawsuit contend that:
there is long‐standing and widespread abuse in the DOE’s “Community Use of School Facilities Program.” The abuse has cost taxpayers millions of dollars in lost revenue, and million‐dollar losses are continuing every year because of unpaid rental fees and utilities charges by literally hundreds of churches operating out of nearly as many public schools.  Relators have called for the entire program to be audited, reformed and for all monies owing to be collected.
As part of their investigation, Relators produced a 2,242‐page report ...[which] contains substantial material evidence of widespread abuse and outright fraud perpetrated by churches, often with the explicit approval or knowledge of school principals and/or their designees. There are literally hundreds of churches operating out of Hawaii’s public schools every weekend, some of whom who have been holding worship services and other church activities at the same schools for 5, 10, 15, even 20 years and longer, without ever attempting to find an alternate location.
Honolulu Civil Beat and Friendly Atheist blog report on the lawsuit. [Thanks to Scott Mange for the lead.]