The Charity Commission has banned a charity trustee who was linked to four charities after finding that he misappropriated nearly £300,000 worth of charitable funds.

The regulator has disqualified Richard Gary Lorrison, who was the chair of the charity Education for Gondar, from trusteeship after completing a class inquiry into four linked charities.

The investigation examined four education charities – Education for Gondar, Education in Sidama, Education for Nyanza and Education in Western Province, Kenya – which were all founded to further the education of young people in their respective areas by providing educational and maintenance grants.

The class inquiry was launched in February last year after the regulator received nine charity registration applications in August 2023 that were linked to Lorrison’s company, MWA Management Advisory Services.

The commission then identified that the four charities which later became subject to the inquiry also appeared to be connected to Lorrison and his company.

The accounts for all four charities had been signed off by Lorrison, were not compliant with the Statement of Recommended Practice and identified wording similarities in the charities’ accounts for the financial year ending January 2022, including a whole paragraph that was identical.

The inquiry found that a total of £270,717 in Gift Aid payments had been transferred from the accounts of Education for Gondar and Education in Sidama to Lorrison’s personal bank account.

The regulator’s analysis of the charities’ bank accounts uncovered that the only funds deposited into the accounts were HMRC Gift Aid payments, each of which were immediately transferred to a private current account in Lorrison’s name.

The inquiry found that neither charities’ bank statements showed evidence of them having received any donated funds or grants, therefore providing no evidence for any donations for which a Gift Aid claim could have been made.

None of the charities’ trustees were able to explain or evidence the donations on which the Gift Aid claims were based, the regulator said.

The commission added that the class inquiry sought to contact Lorrison during the investigation about these payments, but he never responded.

“There is no evidence that these payments were made in furtherance of a charitable purpose, and the class inquiry therefore considers that the Gift Aid payments were misappropriated by Mr Lorrison,” the regulator said.

The inquiry also found that all of the charities’ accounts were in default for the financial year to the end of January 2023 and were not submitted to the class inquiry despite trustees being directed to do so.

“A failure to submit accounts and/or an annual return to the commission within the required timeframe is a criminal offence and constitutes misconduct and/or mismanagement in the administration of the charities,” the regulator said.

The inquiry found that none of the charities’ previously submitted accounts were SORP-compliant, which amounted to misconduct and/or mismanagement.

The investigation also found that across the four charities, Lorrison had personally appointed trustees. 

After telling the appointed trustees that he would be in touch, Lorrison then ceased all contact with them.

“All the trustees Mr Lorrison recruited across the four charities had no involvement with the charities and were completely unaware of the concerns raised by the investigation until the class inquiry engaged with them,” the regulator said.

The trustees, who had no knowledge of the payments to Lorrison, were “effectively trustees in name only”, the commission said, adding that Lorrison had sole control over all of the charities and their bank accounts. 

While this amounts to a failure of the trustees to fulfil their legal duties and responsibilities, the regulator said it is “clear that Mr Lorrison used these individuals without their knowledge or involvement to give the impression that the charities had the appropriate governance and oversight”.

None of the four charities were or had ever operated for the public benefit, the regulator said, which amounted to misconduct and/or mismanagement.

The regulator concluded that Lorrison set up and used the charities for his own benefit and has removed him as a trustee, which disqualifies him from trusteeship at any charity.

The commission has already dissolved and removed three of the charities from its register, while Education for Gondar is in the process of being dissolved.

“The abuse of charities for unlawful purposes is absolutely unacceptable,” the regulator said.

“In instances where the commission uncovers or has evidence to suggest that a civil or criminal offence may have been committed, we will share this information, through our statutory gateway, with the police and other relevant agencies.

“The commission will seek and support prosecution where they believe that criminal activity relating to maladministration or fraud occurs in respect of a charity.”