Financial trickery at AIS

An Accra High Court (Commercial Division) presided over by Justice Gertrude Torkonoo has ordered the controlling party at American International School (AIS) at East Legon, Accra to refund nearly $800,000 to the school.

The controlling party is the Network of International Christian Schools (NICS) based in Tennessee, USA.

The court also ordered the Ghana Revenue Authority (GRA) to audit the financial records of the school and determine all unpaid taxes the school owes the state.

It appealed to the American Embassy for help in collecting that revenue.

In her ruling, Justice Torkonoo also strongly chastised the Registrar of Companies for its failure to recognize companies that register as charities but engage in fraud.

Since the inception of American International School in 2006, NICS had shipped more than $798,000 it described as service charges out of Ghana under clandestine circumstances without paying taxes on it.

To stop the practice, Laurie Korum, represented in court by lawyers Philip Addison and Kwame Akuffo sued NICS.

Evidence presented in court led the judge to draw very damning conclusions about NICS, and she ordered the organization to refund the said moneys and pay the corresponding taxes.

Justice Torkonoo ruled that NICS had established AIS as a “cloak” for making money and not as a charity.

AIS, which charges high fees in dollars, is registered in Ghana as a non-profit company limited by guarantee.

The judge also confirmed in her ruling that since the school started, NICS, under its President Dr. Joe Hale, had “lugged” $798,000 non-taxed income out of the country, and ordered the immediate return of that money to Ghana.

“What is clear from this evidence is that under the cloak of being a non-profit organization, NICS was being given money from the income of AIS for whatever activities on top of the reimbursements that NICS had bothered to present records to Ghana in the form of vouchers or receipts to prove their expenses. They were not paying taxes for this fee they were earning for whatever services the flat fee covered,” Justice Torkonoo said.

She further stated, “I was not at all impressed by the glib ‘Christian’ posturing of Dr. Hale regarding the work NICS was doing at AIS when it came to the records placed before him on the mechanism NICS had designed to move the school’s money out of Ghana.”

Forged evidence

To justify the transfers, NICS, represented in court by Ace Ankomah, tendered into evidence a Memorandum of Understanding—Exhibit J—purportedly drawn up between NICS and AIS in 2006, but Justice Torkonoo said the MOU was forged.

The judge expressed her “profound dismay” with the Registrar of Companies for the “unbelievably reckless and feckless manner in which so many ventures are set up as non-profit organizations, with no mechanism for monitoring and their income is used for charity instead of as a scheme for persons to earn money without paying tax to a country brought to its knees by poverty.”

“I believe it is high time Parliament took up its responsibility of setting up a Charities Authority to ensure that income obtained through the activities of alleged non-profit organizations such as churches and other institutions are actually used to partner social development instead of being taken by organizations that effectively dodge the tax net,” Justice Torkonoo declared.

Justice Torkonoo dismissed all charges and counter-charges involving a former director of the school, Marsden Crosby, who was also a party in the case.