2024-10-30T14:14:32-07:00 2022-12-31 912183089 NATALIE J IWASA CPA INC 1331 LUNALILO HOME ROAD HONOLULU HI 96825 990EZ 2022-01-01 824260185 Magical Creatures Sanctuary MAGI 8087587500 PO Box 444 Laupahoehoe HI 96764 Helena Lundblad Pres./Treas 2024-10-29 true true Natalie Iwasa CPA CFE P00846083 8083953233 2022 2024-10-15 13:58:12Z X X www.magicalcreaturessanctuary.org X X 127249 X 114553 6499 0 2974 0 2974 1495 0 1495 1728 127249 11698 919 176259 188876 -61627 57231 15462 11066 X 37944 16545 22012 19287 13477 57231 52034 40968 57231 11066 Our mission is to rescue, rehabilitate, and offer lifelong sanctuary to animals on the Big Island while serving the Hawaiian community with programs that promote kindness, compassion, and stewardship. Magical Creatures Sanctuary provides lifelong care to the animals we rescue. Rescue and care of farmed animals from abusive or endangering situations -- 97 animals were served in 2022.Our education and outreach program served 255 participants with informational sessions on animal welfare, the effects of agri-business and the benefits of a plant-based diet. 85406 85406 Helena Lundblad Pres./Treas 58.00 0 Mathias Lundblad Vice President 2.00 0 Pat Van Every Secretary 0.01 0 Agnes Honvath Director 0.50 0 Rebecca Clancy Director 0.50 0 Lori Sebastian Director 0.50 0 Elizabeth Weeks Dir. of Ops. 46.00 0 John Hubers Managing Dir. 25.00 0 X false true false false true false false 0 0 0 true 0 0 false HI Mathias Lundblad PO Box 444 Laupahoehoe HI 96764 8087587500 false false false false false false false false false false false NONE NONE true X 40814 60012 69533 118765 114553 403677 116 10968 11084 0 0 0 40814 60012 69533 118881 125521 414761 7824 4005 15085 8855 5583 41352 0 7824 4005 15085 8855 5583 41352 373409 0 0 0 1728 1728 40814 60012 69533 118881 127249 416489 X 0.00000 0.00000 RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED John Hubers Managing Director Funds were stolen. false Schedule L, Part V Supplemental Information Managing Director John Hubers stole organization funds and assets as well as charged personal expenses to the organizations credit cards over a period of approximately 16 months. (The bulk of theft occurred in 2022 but also extended into 2023.)John Hubers was recruited as Managing Director in September 2021. He came with good references and an impressive resume with many years experience as a nonprofit executive. With his claimed background and experience, and the accolades from his references that were contacted by Mathias Lundblad, who was vice president of the board, John Hubers was given the title managing director. On September 27, 2021, when John Hubers and his partner arrived in Hawaii, Hubers joined the Magical Creatures leadership team. One of Hubers responsibilities was to handle the financial aspects of the organization, including accounting and bank contacts. At that point Magical Creatures was a very small organization, without a professional leadership team. Hubers was going to help build out procedures and professionalize the organization.In January 2022 Hubers suggested two credit cards should be opened since it was beneficial for the organization to build credit. The credit cards were to be paid off each month. Hubers was responsible for maintaining proper documentation for expenditures and bookkeeping. In November of 2022 Hubers was asked to present the board president/treasurer with financial reports. When he did, it seemed like financial information was missing from the reports -- the numbers didnt add up. When approached about it Hubers said he had been busy and was backed up with work.The president/treasurer then reached out to a friend of the organization who had better knowledge of nonprofit bookkeeping. The president/treasurer asked her to come help review the books and advise on how to better organize bookkeeping to ensure transparency and that checks and balances were in order. The president/treasurer, Hubers, and this advisor met in January 2023 and a lot of gaps in the accounting software (QuickBooks) were noticed. The advisor provided suggestions describing the steps that needed to be taken in order for checks and balances to be in order. It was also discussed that an external bookkeeper should be recruited. At this point Hubers was only thought to be incompetent and behind on the day-to-day bookkeeping, but there was no real suspicion of foul play. In April 2023, interest charges were noted in the books by the executive director, who was formerly the president/treasurer. Since the credit cards should have been paid in full monthly, there should not have been any interest on the books. When the executive director (ED) asked to see the credit card statements, Hubers admitted he was hiding financial information from the ED and the board of directors, that the organization was in debt and that he had been using organization credit cards for personal expenses. Hubers claimed he was responsible for approximately $22,000 of the total debt of approximately $40,000. Immediately following the confession of the unauthorized use of sanctuary credit cards on April 28, 2023, John Hubers was locked out of all accounts pertaining to the organization. A block was put on all credit cards, and passwords were changed. Hubers and his partner Ray Sagakar were officially terminated from their positions in the organization on May 1, 2023. Before an internal audit of the books was initiated, a copy of QuickBooks was created to preserve the state of the accounting software on the day of Hubers removal.The organization's legal advisors, Animal Defense Partnership, was contacted immediately, and an advisory attorney was assigned to help with the communication with Hubers. The extent of the theft wasnt clear until several weeks later. At first Hubers was cooperative with the board of directors and provided missing receipts and his explanations over emails. Other fraudulent activities were discovered, and the case was reported to both the county police on July 11, 2023, and the FBI on July 28, 2023. When it was noticed Hubers and his partner were selling property bought with the sanctuarys credit cards, the local police were alerted on August 17, 2023, (report number 23-079022) and again August 18, 2023, (incident number: 23-079342). The police talked to Hubers on that same day during which time he was warned about selling these items since he could face felony charges. He still sold everything. The organization has not been notified of any follow up by the police or the FBI as of the date of filing this amended return.In an attempt to recover some of the funds, an attorney was hired to press civil charges against Hubers. He was served with court orders on September 28, 2023. Due to the attorney's failure to file the Return of Service, Hubers was never brought to court. He left the area and his whereabouts are since then unknown -- the lawyer was not able to locate him again.Since many transactions had been deleted by Hubers and a lot of receipts were missing, cleaning up the books has been time consuming. The ED, treasurer, and the board chair worked together to recreate the books from January 2022 to when Hubers was removed, filled in the gaps, and determined the amount stolen. On October 25, 2023, the board officers voted to hire a CPA. On November 15, 2023, the organization entered into an agreement with Natalie J. Iwasa, CPA, Inc. to amend the 990 filing for 2022, as well as file the 990-EZ for 2023.Policies and procedures have been improved since the theft, and several layers of checks and balances have been implemented through the guidance of the organizations board of directors, and the CPA, to mitigate the risk of this happening again. More specifically, these policies and procedures ensure all financial reporting is decentralized; a professional bookkeeper has been recruited, all expenses are required to be approved by the ED and reports properly submitted by each individual purchasing items with the organizational credit cards.The organization will continue to seek justice against Hubers. Cash, unauthorized expenditures 2022-01-01 83624 cost John Hubers unknown address Individual false false false false Sch N, Part III, Additional Information See Schedule L for additional information. Other Revenue.1 Credit card rewards $1728 Other Expenses.1001 Advertising and Promotion $2035 Other Expenses.1002 Office Expenses $5873 Other Expenses.1003 Information Technology $4225 Other Expenses.1009 Depreciation $3159 Other Expenses.1012 Insurance $7416 Other Expenses.1 Theft $83624 Other Expenses.2 Animal feed $32027 Other Expenses.3 Animal supplies $9544 Other Expenses.4 Utilities $7792 Other Expenses.5 Supplies $6688 Other Expenses.6 Gas $4598 Other Expenses.7 Repairs & maintenance $3352 Other Expenses.8 Tools and small equipment $2362 Other Expenses.9 Vehicle, incl. parking $1544 Other Expenses.10 Equipment rental $1037 Other Expenses.12 Merchant fees $676 Other Expenses.13 Miscellaneous $204 Other Expenses.14 Meals $103 Other Assets.1001 Automobiles - Beginning $0 Automobiles - Ending $2500 Other Assets.1004 Miscellaneous - Beginning $19287 Miscellaneous - Ending $10977 Total Liabilities.1 Credit cards payable - Beginning $0 Credit cards payable - Ending $40968 Part I, Line 20 Prior period adjustments netting to $15,462 include corrections to property and equipment and depreciation that were not previously reported as well as an unknown variance of ($8,229) which may be due to additional theft of organization assets.