Nonprofit News

The Ohio Attorney General’s Charitable Law Section has taken a number of recent enforcement actions.

Art Iron Foundation
The Ohio Attorney General’s Office filed suit this summer against the Art Iron Foundation seeking to protect the assets of this charitable foundation, created in 1951 by leaders of a Toledo business. Robert Schlatter of Manhattan Beach, California, was also named in the complaint as the organization’s statutory agent and sole trustee. Schlatter failed to respond to inquiries from the attorney general’s office for more than a year. The foundation stopped making its required annual filings in 2017 when its prior reports indicated the charitable organization had more than $500,000 in assets. The attorney general’s office believes the assets in the organization’s accounts are now in excess of $900,000. The complaint outlines various fiduciary breaches, including failing to make required filings with the IRS, the Ohio Attorney General’s Office and failing to comply with other nonprofit requirements. The complaint seeks to remove Schlatter as a trustee and to appoint a receiver for the organization to take control of the operations, make required filings and wind down the operations of the foundation. The suit also seeks a permanent injunction to prohibit Schlatter’s involvement as a trustee of any Ohio charitable trusts.

Billy Franks Scholarship Foundation  
The Ohio Attorney General’s Office received a complaint alleging that charitable donations to the Billy Franks Fund were not used in accordance with its charitable purpose, as required by Ohio law. At the conclusion of the investigation, the office had reason to believe that statutory violations of the solicitation requirements had taken place. Michelle Franks and William Franks of the Billy Franks Fund agreed to enter into an assurance of discontinuance with the office that requires them to pay $7,500 in a civil penalty and $12,500 in restitution. The assurance of discontinuance also requires the Billy Franks Fund be dissolved and enjoins Michelle and William Franks from acting as a volunteer, agent or employee of any charitable organization in a capacity that oversees, manages or handles any charitable assets.