Another Nail in AC4h's Coffin: The State Takes Action

As many of you are aware, the Pennsylvania state bureau of charities slapped Christy Sheidy with a cease and desist order on August 26, 2013, forbidding her from soliciting donations as a result of her failure to keep AC4h's registration current with the state, which lapsed in November 2012, as well as failure to provide requested documents.

However, Christy arrogantly thumbed her nose at the authorities and continued to solicit donations, mainly through the AC4h Broker Horses page on Facebook and ac4h.com. Despite Ms. Sheidy's claim that the FBI seized financial records during the April 30, 2013 raid at 166 Station Road in Bernville, AC4h did, however, file for 2013, which shows that the charity raked in over $630,000 at this link: AC4h's 2013 990 return -- clear evidence that the charity was indeed disobeying the Commonwealth's cease and desist order.

On January 6th of this year, the Commonwealth, after a lengthy investigation, took definitive action, levying a fine of $5,000 and a four-count Order to Show Cause, charging Christy and Rick Sheidy with several violations of the Solicitations of Funds for Charitable Purposes Act. Specifically:

1. The Sheidys were requested to provide certain documents and information pursuant to the Bureau's periodic review of AC4h's charitable activities. However, the respondents provided only incomplete information in response, and also failed to respond to the Bureau's subsequent requests for additional information and clarification;

2. Christy and Rick continued to solicit donations after the respondents' certificate of registration expired on or about November 10, 2012;

3. The Secretary of the Commonwealth issued a cease and desist order on August 26, 2013, forbidding the Sheidys from soliciting donations in the state until such time when AC4h provided the Bureau with the requested documents and until the organization became duly registered with the state or provided information to prove that it is exempt or excluded from registration. The Commonwealth further alleged that the Sheidys acted in defiance of the C&D and continued to solicit donations.

4. Rick Sheidy served as President of Another Chance 4 Horses, Inc., while Christy served as secretary of the organization. The Commonwealth alleged that the Sheidys violated their fiduciary duties by misappropriating funds from the organization for their own personal use and failing to apply funds in a manner substantially consistent with Another Chance 4 Horses' charitable purpose.

 One of the documents provided upon request was the 2010 990 return, which shows AC4h took in over $860,000 and which stated the Sheidys did not receive any compensation from the organization. However, during the course of his investigation, Investigator Drew Koser discovered that Rick Sheidy was paid a total of $21,000 from AC4h's account, and that the memoranda on many of the checks written from the organization's account was for "hauling" and/or "transport".  Likewise, Christy herself received funds from AC4h's account.

Furthermore, Christy initially denied any misappropriation of funds to Mr. Koser, until he confronted her with evidence obtained through subpoenas that she and Rick had used the organization's monies to pay property taxes and the mortgage on 166 Station Road, as well as to pay for a time-share condo in Orlando, Florida-- a time share she claimed was intended to be raffled off on behalf of the organization or rented out, but never was put to that use. Instead, it was used as a vacation residence by the family on trips to Florida.

These revelations in themselves are not all that surprising as many of us have long contended that Christy and her family was living off the charity and that none of them were gainfully employed in outside jobs. In going back through evidence I've been collecting ever since I got sucked into the battle between AC4h and myself, I found some very interesting statements from the Alex Brown Racing Forums made by Lori Renee Leach, AC4h's legal counsel, as well as Christy herself, about the charity's financial dealings.

Here Lori Leach (kyfarmgirl67) explains how payments to AC4h are processed:

From:	kyfarmgirl67	Sep-28 11:48 am
To:	murphy079	(144 of 252)

 51481.144 in reply to 51481.142 

Thanks for trying to assist with the trainwreck on COTH!  I will try to explain to the best of my knowledge and hopefully Christy can come on later.   The broker program is an umbrella program of AC4H.   As Christy has stated, AC4H has many arms (or for corporate types: divisions or subsidiaries).  One arm is the broker program; one arm is the TB division; one arm is the rescue horses that are in the care of AC4H and another arm is for education (such as having Girl Scouts out to the farm to learn about horses and doing expos). 

All payments that are made to AC4H go into the AC4H bank account via either checks or paypal (and I assume they may occasionally get cash donations at expos and such).  The bank account is a restricted account that does not allow cash withdrawals so all money that goes into and out of the AC4H account is accounted for by a paper trail.  Paypal is set up the same way.  AC4H cannot send out money via paypal.  It is set up to either receive money or to refund.  I have been involved in emails when someone paypal'd too much money and Christy's only option was to refund the entire amount and the person had to resend. 

I know that Christy has addressed these issues on ABR before. If I get a chance I will try and find the posts. 

From:	kyfarmgirl67	Sep-28 11:51 am
To:	murphy079	(145 of 252)

 51481.145 in reply to 51481.142 

Found this from Christy on another post:

We do validate everything legally as required.  990's are online and we had an independent audited performed annually.  Also we file personal taxes.  We are not paid or salaried from the rescue.  The broker program all funds are paid to the rescue/AC4H which is perfectly within legal guidelines and also our mission statement.

The rescue has a business account - every cent is deposited - you can't for instance take a check to the bank and take $20 out in cash and deposit the rest - ALL has to go into the account and from there it is acccounted for through accounting through state and federal channels and then independent audit performed.  We have nothing to monetarily profit personally from the horses being saved and it is right on paper for everyone to see. 

Now, in Christy's own words:

From:   ac4h   11/19/2009 11:12 am  To:  ac4h  (242 of 303)
	42936.242 in reply to 42936.238
	Now to your financial questions - this is going to be long. My background.... I worked from the time I was 15 and my dad lost his job as an Air Traffic Controller (back in the 80's) until my oldest daughters due date. I did everything from cashier to taking a course in real estate and selling homes to going to office management and working my way up to medical billing manager. After our first daughter was born I worked from home and did cleaning jobs and babysat, taught Sunday School I did Mary Kay, Market America these are multilevel marketing companies where you get paid off sales. I also did lead generation over the internet sales. We did rescue out of our pocket and we did rescue that way for 5 years - no donations - our money. We learned on our dime about the auctions and strangles and quarantine- we learned a lot! My husband, Rick Sheidy, his entire family is known in this area for building things bridges and houses but they aren't rich and actually Rick's dad died a young age Rick said from stress of running his own business and people not paying which is why Rick was very set against opening his own busines. My husband worked for the family business for many years and then went to work through the union as a carpenter for many years. Just as an fyi to teach Sunday school and to work in schools you have to have a criminal background check done. We are clean lol. We have also both lived in this same area for MANY years. Rick his whole life and my family moved to PA in 79. Back to the work situation... Rick got hurt and hurt bad. Not proud to say we had some very tough times. We did have to declare bankruptsy. It stinks but it happens. We got a settlement because of his injuries and we paid everything off with the exception of our house. Our house is a double wide mobile home with an addition that sits on approx 1 1/2 acres. I have heard some say it's a mansion! We to this day do not have any payments other than our house which we owe about $67,000. We do not have credit cards, car payments or expensive jewelry or items. We either have the money to buy something or we don't get it - we live modestly and we do without to do rescue. The most important thing we do not have is health insurance. We do file taxes and we do work. Rick has not nor ever has been on disability. He is still able to work and actually we have been downsizing our numbers because we are getting older and we do need health insurance. Other than what I mentioned above that we did and the carpentry work we found our niche with ponies. We did protect them with contracts and they were housed on my parents property, my kids trained them under my supervision and they were placed again with protective written contracts on average $2,500/piece and we had/have waiting lists. This year my daughters did not train ponies they worked with the rescue horses as volunteers. Now for the rescue - At this time my family owns 2 mini mares that were both rescue'd . They are not at the farms we rent to house rescue horses. We have a business account and all payments go to the business account so that all funds have to be deposited. If you go to the bank with your personal account you can deposit some and take some cash out - you can't with the business account and we did it that way for accounting purposes. From there the funds are reported on a 990 and an independent audit done. Salary and payments... we don't have any employee's and Rick and I do not take a salary. It is perfectly legal to do - but we don't. Again we paid out of our pocket for the first 5 years that we rescued and hit all the learning curves. I thought that since my personal lifestyle was brought up I would take pictures of our house, yard and vehicles. Here is the link since you can't come visit and see for yourself. Pictures of our farms and some video footage is on the website under pic's and blog link also many pictures of visitors too. http://www.flickr.com/photos/anotherchance4horses/sets/72157621890446027/ Sorry this is so long but I didn't want anyone to think we are trying to hide anything and hope that this clears up how and why we do things*. Thank you for taking the time to read. There are many volunteers who see how we live and what we do for the horses. If you ever do get a chance and are in the area please do give us a call and we will be happy to show you around. *Note where Christy says, "Sorry this is so long but I didn't want anyone to think we are trying to hide anything and hope that this clears up how and why we do things". Now, I'm going to trot out an email exchange that took place between one of my friends and Christy on New Year's Eve, 2010, in which Christy was very evasive and refused to answer direct questions from my friend, whose identity has been changed for her protection. Christy's comments are in bold type. Nancy S________ My recent conversation with Christy and why I have legit concerns about AC4H. In no way do I have a personal problem with her at all Christy emailed me ... Christy Sheidy December 31 at 8:35am Report Nancy who is your husband and where does he work? I want to verify and validate that he is familiar with non profit acconting work as you declare and offer him a chance to correct his misinformation that you have posted.  You ask why I have not answered you? You haven't emailed me directly. You always post on a thread after I have left. Nice. We hired a non profit accountant at a discounted rate of $75.00 per hour Nancy. I used to manage the books for hospitals and nursing homes and am very familiar with accounting. We also hire an independent auditor annually to go over our books and prepare an audit. You didn't know that did you? Do you know what program services are Nancy? Do you know what constitutes program services? I think you should look into it real quick.  My response  Christy.. yes we have both emailed you several times. I am guessing that you are going to say that you never got the emails but that is not a problem since we are in contact at this time now.  Since you are very familiar with accounting then the questions I have asked should be simple ones for you. The reason I emailed and asked you the questions were to understand more. Here is the email again. Christy, I know in the past we have not seen eye to eye on everything, but I try to believe that everyone is good at heart. I had given you money in the past for Hayard Branch. With all the drama surrounding you I decided to have my husband help me out. We looked at your 2009 990-EZ filing. My husband is employed in the financial area and pointed a couple of things out to me.  I want to give you the opportunity to explain these things to me. My first thought was to just post the form and question it in the open, but he talked me into coming to you directly and privately. 1) You are reporting $306,602.95 as Program Service Revenue. If AC4H does not actually own the broker horses, then where does this revenue come from. I find it hard to believe that you are adopting out $25,500 worth of horses a month. 2) Also Part III of Schedule A, Section B, Line 12 you list this Other income of $306,602.95. Since you listed this income, you needed to explain in Part IV where this income comes from. Why did you negect to complete this section? 3) Part III, Section C, Line 15 stated your percentage of Public Support is 23.87%, so that means 76.13% of your support comes from the Broker program. I don't think very many of your detractors know this. This would only fuel their fire. It's hard to understand that you are a charity, when only 1 out of every 4 dollars you receive come from the good hearts of people trying to save horses. 4) Part VI, Line 49a You state that you have made transfers to exempt non-charitable related organization?. What did you transfer and to whom did you transfer? Finally, you state that your expenses for horses and supplies is $208,052.59 and the revenue from selling them is $306,602.95. How can this be the case when the broker sets the price of the horses? These numbers should be the same if all you do is give the broker what he wants for them. Do you mark them up for the adopters? I know you will be able to answer all of these questions since you are the paid preparer that signed the 990-EZ.  I would like you to not only answer the questions, but allow me to ask any follow up questions as well, so we can quickly gets this all cleared up. Thank you, Nancy Yesterday at 2:31pm · Unlike · 8 people Nancy S_________ her response  You didn't answer me Nancy who is your husband and where does he work? I want to verify and validate that he is familiar with non profit acconting work as you declare and offer him a chance to correct his misinformation that you have posted.  my response  Christy, I guess I am not understanding why that would matter to you. You ALWAYS tell everyone that we can ask anything we want and you are glad to answer. Does it matter if he understands? YOU can tell us where we are wrong and explain please her response  You said your husband is in the know regarding 990's, accounting and non profits. That is how you came up with your questions, accusations and insinuations?  You said - "With all the drama surrounding you I decided to have my husband help me out. We looked at your 2009 990-EZ filing. My husband is employed in the financial area and pointed a couple of things out to me".  Since I hired an accountant for a discounted rate of $75.00 per hour I would like to know how your husbands knowledge applies to question the 990's that are audited and turned in to very knowledgable IRS agents Mary. I mean your the one who said your husband has the knowledge to pose questions and I am asking you to validate that.  my response  I am sorry Christy I was coming to you as you have stated time and time again wtih ANY questions. My husband said to tell you to please by all means correct him if he is wrong. If you ca not answer the questions or choose not to for yur own reasons then that is fine. YOU are the public charity that has the legal and moral obligation to respond to any public questions. I do appreciate your time and hope that you can settle my mind on these matters. I mean that with all sincerity.  And for your own benefit please ask yor accountant what an excess benefit transaction is. Again, I hope you will respond to me with real and specific answers to clear all this up.  Nancy  her response  Ok I will correct him and I do not think he has any experience with 990's or non profits. Look up what Program Service Revenue is and what goes into it Nancy. It's on the IRS website.  My moral obligation is to fulfill our mission statement and legally fulfill our obligations which is all done and I even answered your questions and the info is provided for public inspection. We even surpass that with an inedpendent audit. Just because you don't understand a 990 and throw out insinuations based on opinion doesn't make it correct and it isn't.  I am going to the barn - horses need me and then I am going to run errands, check emails, feed horses and enjoy an evening with family and friends. Happy New Year Nancy.  my response  My husband said he is looking at it now and doesn't understand why you are having such a problem answering simple questions. It states that you reported over 300,000.00 in Program Service Revenue. How is this possible? Do you adopt out 25,000.00 in horses per month? He is asking where this money is coming from if it is not from the broker program? It would be impossible in his mind that you would be adopting out that many horses in a months time.  To be honest Christy, we did not expect you to answer and to protect yourself at this point maybe it is best not to.  Happy New Year to you as well.  Nancy  her response  I did answer it. I told you ti go check out what goes into program service revenue. It isn't just adoptions Mary, it isn't broker horse revenue, it's a variety of things that are done to create revenue - that is why it's called program service revenue!  my response  Yes I am asking you what that is.. what else is there that would create 300,000.00 in income when you have also stated that donations are only 23% of your total revenue. Thanks for emailing me back.  her last response OMG Nancy you don't know what we do at all do you? Expo's, fundraisers, HSUS walk a thon's, miniature spokes horses at Petco, Sweet street fundraiser, our raffle auction - we work our asses off to keep the horses fed Nancy! I don't know if you have looked at the bottom line but the money went right back out really flippin fast! It's expensive!!! It is extremely gratifying to see our suspicions about Christy Sheidy and AC4h so resoundingly confirmed by the authorities and her bold statements about her innocence exposed as the lies we all know they are. This latest action by the Pennsylvania authorities and the revelations that were subsequently made are, I believe, just the tip of the iceberg and that much, much more will be revealed on the federal front once the FBI, IRS and other government agencies wrap up their case against Christy and AC4h.  Stay tuned for developments in the near future.......