Tax document shows AFF’s ex-leader accused of pilfering funds for personal use

Photo by Jerry Jordan/Kickin' the Tires

By Jerry Jordan — LAS VEGAS – Patricia Pauline Driscoll, the woman who used NASCAR and some of its top drivers to raise money for the military charity she once ran, is now under federal investigation and accused of “misappropriations of assets,” according to tax documents obtained by Kickin’ the Tires (KTT).

The Armed Forces Foundation (AFF) laid out the charity’s claims in its 2014 IRS 990 document, which is required to be filed by charitable organizations to show where their contributions are spent. It was not filed until the latter part of 2015. In the document, the AFF also admitted it was cooperating with an ongoing investigation by the government.

“The armed forces foundation has become aware of suspected misappropriations of assets by its former president, resulting in the former president receiving excess benefits,” states the document. “The total misappropriation for the years 2006-2014 is $599,609. The excess benefits include: i) excessive fundraising commissions; ii) the use of armed forces foundation personnel, funds, and other resources to support frontline defense systems, the for-profit company owned by the former president; iii) personal expenses unrelated to armed forces foundation business, including meals, travel, parking tickets, personal gifts, and make-up. The armed forces foundation expects its former president to contest these excess benefits transactions. The armed forces foundation has a high certainty with regard to these facts, is currently cooperating in the ongoing investigation into the matter by the government, and is investigating possible recovery of these assets through various means. The armed forces foundation does not believe any organization manager is liable for any excise tax imposed by section 4958(a)(2) of the internal revenue code.”

Click here to view the Armed Forces Foundation 2014 990.

Based on the federal tax code, if it is proven Driscoll misappropriated the money as claimed by the AFF, in addition to any criminal charges for those acts, she could also face IRS penalties. Per IRS guidelines, the amount of any alleged evaded tax owed to the government would be roughly $200,000 plus penalties and interest.

Last year, KTT exposed Driscoll’s spending habits after receiving numerous financial documents and emails while investigating a claim she made of domestic abuse against her former boyfriend, NASCAR driver Kurt Busch. Her case against Busch fell apart after Delaware prosecutors refused to file criminal charges against him, stating there was not enough evidence to do so, much less prevail in court. But before justice could prevail, NASCAR suspended the Busch and he made his return one year ago this week as the series headed to Phoenix.

A review of the 990 tax document shows the AFF admitted it was aware that it engaged in “excess benefit transactions with a disqualified person during the year.” In doing so, the AFF had to file additional paperwork showing Driscoll’s alleged misappropriations and disclose that it paid $96,000 in rental costs to Driscoll for leasing office space in the home/building she owns. The AFF also confirmed that it was aware of “a significant diversion of the organization’s assets” during the year.

Ironically, the AFF claimed it makes its 990 financial information available “upon request” but it has repeatedly ignored requests from KTT seeking a copy of the record. Failing to provide copies to the public is considered a violation by the IRS and can be punishable by up to $10,000 in fines. Kickin’ the Tires obtained its copy of the 990 from a source after repeated written requests and multiple phone calls to the AFF and members of its board of directors were ignored.

According to the IRS, “In general, exempt organizations must make available for public inspection certain annual returns and applications for exemption, and must provide copies of such returns and applications to individuals who request them. Copies usually must be provided immediately in the case of in-person requests, and within 30 days in the case of written requests. The tax-exempt organization may charge a reasonable copying fee plus actual postage, if any. The IRS must also make this same information publicly available. Generally, it may take the IRS up to 60 days to process your request.”

A formal request has been filed with the IRS, along with a complaint notifying them of the lack of acknowledgment by the AFF.

Additional information contained in the 990 shows Tris Barry as the treasurer for the AFF but court records show him also to be an employee of Driscoll’s Frontline Defense Systems, which operates out of the same converted residence as the AFF. Driscoll’s salary is listed in the document as $154,440 with an additional $8,280 in other compensation for 2014.

However, there is a notation in the document that Driscoll is claiming she is entitled to an additional 5-percent of any new contributions that she brought in during her tenure. It is not stipulated how long the practice occurred but the AFF admits that it ceased any bonus compensations to employees for fundraising in 2015.

“A 5% fundraising commission was included in a document purported to be an Armed Forces Foundation Employee Handbook,” states the 900 document under Section I, Line 5. “It is unclear which employees ever saw this handbook. Employment offer letters for several Armed Forces Foundation employees stated ‘Commission: 5% of new monies brought in.’ This policy was ended in 2015 prior to this filing. Currently, only the Armed Forces Foundation’s former president (Driscoll) is claiming any fundraising commissions due. See Schedule L Part V.”

Court records contain a document identified as “Exhibit D” indicates additional payments Driscoll received to her annual AFF salary. In 2012 that amount was $167,359; in 2013 the amount was $129,218; in 2014 the amount was listed as $137,394 and in 2015 (partial year) the amount was $56,922.

Click here to view Exhibit D from the court record.

And the AFF listed a $306,071 loss for 2014 which caused the charity to dip into its fund balance. The AFF also operated in the red during 2013 to the tune of $526,540.

Although the donors are not listed, the AFF reported to the IRS for 2014 that it received donations of 476 roundtrip airline tickets valued at $190,400, a Cessna L-19a aircraft that brought $750,000 at auction and a Mercedes Sprinter van worth $100,000 in addition to cash contributions.

In previous coverage, emails cited by KTT showed Hugh Webster, a Washington DC attorney and secretary of the AFF’s board of directors, was made aware of discrepancies in Driscoll’s spending habits by Carole Wiedorfer, the AFF’s former CPA. From having the AFF buy first class airline tickets for her son to travel to the number of hours she claimed the then-7-year-old volunteered during the day, Webster was told of potential problems ahead.

An attempt to obtain information from of the Washington DC-based accounting firm of Jones Maresca & McQuade PA, which prepared the 990 document, was unsuccessful.

Listed on the board of directors for 2014 were Steve Phelps and Steve O’Donnell. Both resigned their positions more than a year and a half ago. David Higdon, Vice President of Integrated Marketing Communications, said the sanctioning body declined to comment on the information contained in the 990.

Another email, recently uncovered by KTT, shows Wiedorfer also notified Webster that the AFF was paying the American Express bill for Frontline Defense Systems. That company is a for-profit business with a handful of government contracts primarily to supply ground-sensor technology to the U.S. Customs and Border Patrol.

“This is for 2012, not 2011 that I am working on,” Wiedorfer wrote, in an email sent to Webster, Driscoll and several others. “I noticed that the receivable on AFF’s books of money owed to it from Frontline which was $9k at 12/31/2010 is still around $9 for 12/31/2011. But the receivable grows quickly to $29,000 by July 2012 due mostly to the payment of FDS’ American Express credit card bills by AFF. What is that about? AFF should definitely not be paying any of FDS’ bills for any reason. What am I missing here? Thanks. Carole.”

Webster has not responded to multiple telephone calls and an email seeking comment and additional information for this article.

Copies of the AFF’s and Frontline Defense Systems’ credit card bills have also been filed in court records in Howard County, MD and KTT obtained copies of hundreds of financial documents during a two-day visit to the Washington DC area in 2015.

Another document found in the court records was a listing of character witnesses for Driscoll. The case involves an ongoing custody battle with her ex-husband and the character witnesses included friends and family plus congressmen Tim Murphy, Brett Guthrie and Duncan Hunter; celebrities Ron White and Margo Rey; members of the NASCAR community Jeff Burton and Richard Childress, as well as, Brian Kilmeade, who has emceed the AFF gala. According to online archives and Twitter posts, Kilmeade also had Driscoll on his morning FOX television show, FOX and Friends. Apparently, he was with Driscoll and her son during a visit to Disney World, according to court records.

Click here to view the character references filed by Patricia Driscoll in court.

“Mr. Kilmeade has knowledge of Defendant’s (Driscoll) character and Defendant’s interaction and care of the minor child as well as travel with the minor child. Mr. Kilmeade spent time with (name redacted) and Defendant at Disney World in Florida and can testify regarding the trip and interaction and care of Defendant towards the minor child. He can also testify that the minor child was happy and social.”

An email and text message sent to Kilmeade to obtain a comment for this article, regarding the nature of the trip with Driscoll and her son, was not returned prior to publication.

As noted in the AFF 990 document, the government is investigating Driscoll but after she learned a former employee of the AFF had turned whistleblower, she filed a police report alleging that individual had committed theft. But according to a source, the case is unfounded and items claimed to have been stolen were found.

Now, the police report is in the possession of the FBI and could be used as evidence in a witness tampering charge. In fact, the source stated federal prosecutors warned Driscoll that further attempts of witness tampering would result in federal felony charges. It took several months but KTT was able to obtain a copy of the report from the Metropolitan Police Department in Washington DC.

Filed June 7, 2015, months after KTT’s original story broke about the whistleblower, as well as, another story by ESPN’s Outside the Lines, Driscoll alleged the person defrauded the Armed Forces Foundation and Frontline Defense Systems, the government defense contracting company she heads and operates out of the same offices as the charity located at 16 N. Carolina Ave. SE in Washington D.C. According to the report taken by Officer Ronald S. Robinson, “she believes that S-1 (Suspect 1) who is a former employee has stolen the listed property from the listed businesses over a period of time due to a company audit that was conducted. Det. Stein was contacted in reference from the Fraud Unit.”

Click here to view the police report filed with the Metropolitan Washington DC Police Department.

Part of the information turned over to the government by the whistleblower included documents that were filed in a Howard County, Maryland family court showing Driscoll spent thousands of dollars to follow Busch around the country when she wasn’t aboard his private jet and charged tens of thousands of dollars for items believed to have been used for her personal benefit. There were hundreds of dollars in charges for alcoholic beverages from Congressional Liquor, across the street from the AFF offices; a charge of $633.38 to Craig Coyne Jewelers and charges to the Safeway grocery store, both near her home in Ellicott City, MD.; charges to a craft store known as Michael’s and a $127.57 charge to Fort Davis Drugs in Fort Davis, Tx just to name just a few of the hundreds of entries logged on the AFF credit card.

The source also provided information showing that nearly $20,000 was paid using the AFF’s SunTrust Debit Card to a Dover, Del. law firm that represented her in the failed domestic violence case against Busch.

On Tuesday, a second former employee of the AFF came forward but only on the condition of anonymity, to say not everyone working at the AFF was bad. In fact, the source said the only person not committed to the charity’s overall mission, in their opinion, was Driscoll.

“She is clearly a bully,” the former employee said. “Even though she made their lives miserable, people stayed because they believed in the cause. The staff had no knowledge of what she was doing financially. I never saw anything that I knew to be illegal because had I known that I would have said something. I would hate for people to think the entire organization was fraudulent because that is not the case at all. She made it a very, very difficult and challenging work environment, which is why it has such a high turnover. The staff never saw the financial information. Still, the AFF did a lot of good things and helped a lot of families.”

Driscoll did not return a telephone call or text message sent to her cell phone seeking comment for this article. Additionally, it is the policy of the FBI and the U.S. Department of Justice to neither confirm, nor deny, the existence of an investigation.

In the past, Driscoll has threatened to file a lawsuit against Kickin’ the Tires for numerous different reasons and has even had attorneys send letters in an attempt to keep information about her or the AFF from being made public. No such response has been received with regards to this article.

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