The American Bar Association (ABA) has revealed that a staff member had diverted about $1.3 million from the organization over a period of eight years. The theft was made public via the company’s annual tax form, a form 990.
ax-exempt organizations are required to file an informational return each year with the Internal Revenue Service (IRS), no matter the size of the entity. Small tax-exempt organizations with average annual receipts of $50,000 or less have the option of filing a form 990-N, or e-Postcard. Tax-exempt organizations with annual gross receipts of less than $200,000 and total assets of less than $500,000, file a form 990-EZ or a form 990-EZ, while tax-exempt organizations with annual gross receipts of $200,000 or more or total assets of $500,000 or more, file a form 990 (downloads as pdf). Organizations classed as private foundations must file a form 990-PF (downloads as pdf) regardless of assets or receipts.
(You can find out more about annual filing requirements for tax-exempt organizations, including due dates, here.)
The ABA, with headquarters in Chicago, is a voluntary professional organization for lawyers, law students and other interested in the legal profession. Founded in 1878, the organization boasts over 400,000 members and describes its mission as "committed to supporting the legal profession with practical resources for legal professionals while improving the administration of justice, accrediting law schools, establishing model ethical codes, and more." According to the most recent disclosures on form 990, the ABA has 835 employees and 8,500 volunteers.
The ABA has stated that they became aware of the theft last September. According to a statement on the organization’s tax form, when the theft was discovered, the employee responsible was “immediately placed on administrative leave” and terminated the following day. The incident in being investigated internally, and the organization has been “in touch” with law enforcement.
The theft was not immediately made public, but was included on the most recent form 990 in response to this question: Did the organization become aware during the year of a significant diversion of the organization's assets?