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Is This Fraud? What Should She Do?
Ok.
My boyfriends mom is having a major back surgury done in February. She had a person donate $10,000 to her for the expenses. She has all the money that has been donated and earned in a medical account, with her friend who is also on the account. She will be out of town for about 2 to 3 weeks, and she decided that it might be useful for her to have a laptop for research and bill paying. She used some of her medical money for this. Her friend called her in hysterics telling her that it was fraud and that she had to send it back or else she would take herself off the medical account and she wouldn’t go with her.
Is buying the computer really fraud? She’s willing to send it back, if she’s going to get in trouble, but not just because her friend says she has to. She has other people to go with her, and that she can put on the account.
Thanks
–Julie ?
As I said, She is willing to send the computer back, and she didn’t know that she wasn’t supposed to buy the laptop with that money, because it was donated by all family, but she was just wondering if that was just her friend being dumb, or if she was right. She will send the computer back immediately.
Sorry guys!
the donations were made to cover ALL costs, not just medical bills. that’s why she didn’t know it would be fraud
It could very well be. That money was donated to a MEDICAL account. I am no expert, but I do know that she could really be in trouble. No funds should have been withdrawn from that account except to pay medical expenses.
It depends on exactly the wording used when the donations were made. If they were to cover medical expenses only then the computer is not a good use of the money. If the donations were to help cover all expenses associated with the surgury then travel expenses, accomodation, a laptop and such MAY be ok .
You would need a proper legal opinion for your state .
You are not allowed to mislead people on what they are donating for.
You can’t collect for Aids Research and then buy Super Bowl Tickets.
There are civil penalties, fines and jail time.
Yes it is fraud! Anytime that you take money for one purpose, especially if it is given as a charitable contribution (which this sounds like it is) and then you spend it on another purpose, it’s considered fraud. Think about it for a moment, what if one of the big charity companies wanted you to donate a toy to a needy child, and you donated a bunch of toys and then they passed the toys out at a private school full of rich youngsters? How would that make you feel? I think she should definately either return the laptop, or put the money back in the account. It was wrong to take the money in the first place.
She should probably just pay for the laptop herself.
I don’t know if I would go as far as fraud….unethical, yes.
I suspect she “wanted ” a laptop and couldn’t resist spending a little. If you’re gone for 3 weeks pay your bills before you go. Most people’s bills only come once a month.
This is only fraud if the money was placed into a Medical account for Tax Shelter purposes. With any account that is deemed for Medical Expenses it must be utilized for an IRS approved Medical Expense. Travel, Milage, Co-Pays, Deductables, over the counter IRS approved medications, perscription drugs, etc. Your mother received money that she is not paying taxes on, she is not a charity in the tax free sense of the IRS like a charitable foundation, so to avoid taxes on that money she needs to utilize it strictly for Medical purposes. Any money provided over a certain amount as a Gift is taxable, however if used on Medical Expenses that counters it all because she has now official used it for a tax deductable expense. So fraud may not be the correct word but Tax Evasion is….take the Lap Top back replensish the money by the end of the year because you will need to provide receipts for all those expenses to justify that account and at this moment…..you can’t.