Counterfeit check scams target Hawaiʻi nonprofits

Hawaiʻi nonprofits may encounter scams involving fake donation checks, according to the Hawaiʻi Department of the Attorney General.

The Department of the Attorney General is cautioning nonprofits about fraudulent donors reportedly sending counterfeit checks and later requesting a portion of the funds be refunded before the nonprofit realizes the check is fake.

Names used in suspected scam donations in Hawaiʻi include “Leonardo Kotlar” and “Give To Help Foundation.”

Similar scams have been reported across the United States, typically when a scammer contacts a nonprofit, posing as a generous donor or a corporate representative with an initial offer of a specific donation amount. The scammer then sends a donation check, often larger than the amount initially promised.

After the check is received, the scammer contacts the nonprofit, claiming they made an error and need a portion of the funds returned. They may cite urgent reasons, such as an emergency or pressing financial needs. When the nonprofit sends the requested refund, the original check is rejected as fraudulent, leaving the nonprofit with a financial loss.

“These scams are designed to exploit the goodwill of nonprofits and the community they serve,” said Eunice Park, Charities Program Administrator with the Department’s Tax and Charities Division. “We urge all nonprofits to stay vigilant, verify all donations before allocating resources and report suspicious activity.”

Hawaiʻi nonprofit leaders are urged to review their current financial controls and policies and implement the following precautionary steps to protect their organizations:

• Verify Donors: Especially from new or unknown donors, verify their identity and the legitimacy of the donation.
  • For example, the reported suspected scam came from a scammer impersonating a nonprofit organization with a .com web address, with no other digital footprints or searchable records from the IRS database.   
• Spot Check: Make sure the check was issued by a legitimate bank. While some counterfeit checks will include a legitimate bank’s name, a fake name is a clear red flag.
  • This also applies to a cashier’s check, as it has been reportedly used in an attempted scam in Hawaiʻi.
• Wait for Clearance: Do not refund any part of a donation until the check has fully cleared, as bank processing times can vary and fake checks can take weeks to be discovered.
  • Don’t rely on money from a check unless you know and trust the donor with whom you are dealing.
• Establish Internal Policies: Implement financial controls requiring multiple approvals for any outgoing wire transfers or refund payments.
  • Adopt a policy requiring a check clearance before approving any refunds.

Any questions or complaints about a scam or suspicious donations can be directed to the Department of the Attorney General’s Tax & Charities Division at 808-586-1480 or by sending an email to ATG.Charities@hawaii.gov.