Richard Lesher

BOOM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

That was never a logical business plan. They were operating below capacity anyway (at the time). Plus, the new location would need to RENT the facility whereas, their current location operating below capacity is a building they own. Mind you, the solution was to simply clean up current operations and that would have got them $2M net over 2021 and 2022.

This is my new Focus. Vanguard is losing money on traditional bingo. Below is schedule G from the 2022 IRS 990. They paid out more in prize money than took in for traditional Bingo Card sales. They are only making money on pull tabs (mini lottery tickets). This happens again in 2021. This does not happen over the same time period for their Bingo competitors that also operate in Santa Clara (The Aquamaids). This didn't start to happen until the previous Bingo Manager who saved bingo from previous thefts finally retired and had no more oversight over Bingo. Yes, what the below numbers say is if Vanguard did not conduct traditional Bingo Games in 2022 they would have $647K more in money. Bingo Pull Tabs Total Revenue $3,045,389 $14,086,274 $17,131,663 Prizes $3,382,106 $9,746,316 $13,128,422 Other Expense $310,696 $1,437,104 $1,747,800 Net $(647,413) $2,902,854 $2,255,441 I am eager to see what 2023 says.

I congratulate Russ (the new CEO) getting the audits pushed through that the CFO/Treasurer/President couldn't do in the last four years. I caution them that Bingo is still operating upside down, and the Vanguard Cadets will never be able to return until they fix whatever is going on with Bingo (why did they make $1.5M less in face of earning $6M more in revenue). I caution that recent accomplishments of the Board of Directors are: 1) Reduction of SCV's net worth by $3M in a single year. 2) The perpetual termination of Vanguard Cadets. 3) The entire illegal operation of Bingo for the Fiscal year of 2023 (they started the year in a negative liquidity position, there were no reserves to ever pay bingo staff and meet current debts, and there were no sufficient non-bingo income streams to cover that). 4) SCV is still not a member of DCI. All of those things still happened, and bingo remains unreconciled regarding 50% reduction in net income in face of $6M more in revenue (for 2022). I hope irrational excitement doesn't take over. ************ My spouse couldn't be happier that I have no justification to keep focusing on this.

Sooooooooooooooooo...................................... When I reached out to DCI several months ago, and submitted a complaint (to include forwarding the e-mail I received from the Penn Dept of State) that Cadets are not registered as a charity Dan A personally e-mailed me saying Cadets are in the clear. Then I got an e-mail from the Cadets media representative trying to intimidate me and asking me why I am spreading lies. The follow up to that was, OK, if you guys want to be that way, lets see if the State of PA is wrong. Soooooooo............. I submitted a formal complaint to the Penn Dept of State. I've now been contacted by an Investigator from the Dept of State inquiring about my complaint. Guess what, to this day Cadets are still not registered. This is per the voice conversation with a Dept of State investigator. I can formally say the Cadets are liars, and in a best case scenario Dan A took them at their word, and DCP took them at their word, and deleted the original post I put up here about it. So DCI and DCP are propagating lies to help cover the tracks of Cadets. But I have the direct phone number and e-mail of the investigator that is running through the complaint. Because now someone with a boring job in the Dept of State actually gets to do something of an organization clearly in violation. Oh.................. and now the Penn Dept of State has a copy of the lawsuit Docket from New Jersey. It's not something they can act upon, but it is something to be considered in the totality of the complaint combined with the hundreds of thousands of dollars in illegal solicitations that are under investigation that were documented on Cadets IRS 990s. ****************** See................. all DCI and Cadets had to do is: 1) Just ignore me. 2) maybe say, "Oh my, we will get right on that thanks for bringing this to our attention". What they shouldn't do is say: 1) The representative of the Dept of Stat is wrong. 2) Accuse me of spreading lies. Now there is an e-mail communication chain of DCI and Cadets completely blowing off an ethics complaint, and the corresponding e-mail chain from the Penn Dept of State validating what I was originally trying to bring to the attention of DCI and Cadets. I suppose the plaintiff attorneys against Cadets right now would be interested in that proof of ignored Ethics inquires.

I totally missed this. Holidays and all. https://www.svvoice.com/santa-clara-vanguards-charity-compliance-struggles-continue/

My ego doesn't matter. My cause is irrelevant. There is nothing I nor anyone else can do to stem the tide SCV leadership has navigated towards. The CA DOJ is not considering my social media popularity.

Well, where we were last year was: I predict based on my years as SCV Treasure, understanding of their business model, state and local laws, and the starting financial position (year end 2021) of 2022 they would be in clear violation of various bingo laws, and by defaulting on creditors clearly have completely run out of money. What ended up happening when 2022 financials were made available by SCV: I underestimated their financial troubles this time last year. They blew threw $1.4M of their reserves in 2022 (quite possibly ran that down completely to zero at some point, and maybe it bounced back later in the year. We'd need month by month financials to see how it progressed over the year). They also ended FY 2022 in a negative financial liquidity position owing more in short term debt than they had in cash, savings, and investment instruments combined. For them to have made themselves current on all debt they would have had to sell some sort of capital asset (like the trucks). Then, while I projected they were paying bingo employees illegally, and that would happen some time in FY2023 based on the end of FY2022 that clearly was happening during 2022 because of how much they burned through their reserves and ending in a negative liquidity position well before they even got to FY2023. There were no reserves available to pay Bingo Employees from going into FY 2023. As far as the reason for their financial troubles, we were told it was expense related this time last year. However, it really was Revenue related. Their FY2022 expenses were not scarily more than they operated with in FY2019 (the previous normal touring year). However, Bingo net income collapsed while reporting dramatic increases in revenues. I was expecting FY2022 990's to tell me somewhere in the expenses things blew up, but it all points to Bingo. ***** In continuance of this being a "dead horse" I suppose both sides of the passionate argument would disagree. One side would say the horse is not dead, and the other side would say, hey, this is not even a horse (who are you trying to fool). ******************************* For all the heat I have had to deal with this entire last year, this is it folks.................. we are coming to the conclusion of what I said was going to happen this entire time. We could be less than a month away from what I had being trying to encourage SCV steer clear of. SCV and Cool-Aid drinkers can say otherwise, and throw crap my way, but in the last year things have only gotten worse, and in a manner measurable by the California Department of Justice ,and provable by the latest 990. Last year at this time I ended up pulling a post I put here on DCP regarding their illegal Bingo Operations because at the time I was confronted by an attorney I didn't have proof. I only had logic. The SCV President denied any legal or regulatory violations across the board, and a few months later I make their delinquency public (going back to 2020). So that proves the leadership of SCV at the highest levels are liars. Then the 2022 990's prove my theory of Illegal Bingo operations. That has been going on since 2022, and the entirety of 2023, plus the more than $1,000,000 that was raised illegally through grants and donations since 2020 (any line items of donations and grants on the 990's for 2020, 2021, 2022, and 2023 are illegal, and it totals over $1,000,000). I told everyone that could act and fix things this time last year, this is where SCV is going, and the entire year of 2023 was ###### away, and now we are in the final days and it's all in the State of California's hands. ***************** I don't know how a CPA firm is going to be able to provide an audit opinion for 2021, 2022, and 2023 that SCV is not in violation of illegal donation/grant fund raising and distribution, and the illegal Bingo Operations and comingling of bingo income used to pay Bingo Employees.

One can always make Jerky.

I look every day. I don't expect anything new from the DOJ until after two months from the last November notice. The only thing new would have to come from SCV, and what has happened recently is: 1) 2019 was finally submitted (the original reason for the delinquency) with an audit. The audit itself was completed in 2022, so they were literally sitting on it more than a year before it was submitted. If they submitted it when they first could have then I would have never known they were delinquent to begin with. 2) 2020 was submitted, but never required an audit because based on self reporting they only earned 1.95M in revenue (below the $2M audit requirement). 3) 2021 was submitted with an attempt to submit an audit, but it turned out that audit was a duplicate of 2019. I notified the state, and while the registration was submitted, they still need an audit for 2021. This is still in process, and the wrong forms were submitted. The DOJ gave them first notice of this late filing in August of 2023, and had they submitted the 2019 filings long ago when they could have this would have been the first time I would have been made aware they were ever delinquent and this whole mess would seem to only be newly recent (not going back to March of 2020). 4) 2022 was submitted and was rejected for lack of audit. The renewal itself has the 2022 990 attached to it. The impression I get from the 2022 990 is that SCV's operational troubles were from a collapse of Bingo Net Profitability in the face a dramatic Bingo Revenue Increases. While expense management wasn't stellar they would have been fine if the Bingo profitability hadn't tanked when bingo operations changed hands after the long tenured bingo manager retired. ************** Summary: 2019 was the original reason for the start of the delinquency. 2021 and 2022 are the cause of the continued delinquency. SCV is two weeks out from the state's timeline when it can act against nonprofit status. Actually, the state also left open a window to act on any previously given notice going back to 2020. Additionally, the State Tax Board has also been brought into the decision process as well as of the November notice. So two different state agencies can act independent of each other (the DOJ, and the Tax Board). If they magically get cleared of 2021 and 2022 then 2023 will be due in March, and late in September and it will probably start all over again (if they make it that far).

Yes, we are 2 weeks until the last 60 day notice to revoke nonprofit status expires. At which point the DOJ can pull the plug at any time. I want to further mention, in my efforts to understand the DOJ process I've looked up data from other defunct nonprofits to get a sense of the timeline. When the DOJ acts upon it's warning letters is very inconsistent. HOWEVER, many other organizations that were on their last breaths submitted requests for appeal or wrote the DOJ for more time. Those correspondence were uploaded and made public by the DOJ. SCV does not appear to have any such requests on their behalf. It appears SCV is just letting the clock run out. I think the DOJ will get to SCV in due time, and I think based on the enforcement actions of the DOJ of other organizations they will do so when everything is wrapped up nice and pretty. Some cease and desists are a simple letter, some cease and desists are a legal brief. I suspect SCV is deserving of a legal brief based on their longevity (to when the decision comes the DOJ will have made a much stronger case for the action). There is only one entity in the cast of actors that is executing their responsibility according to their role in this circus: 1) I reached out to management int he warmest nicest way possible when the Vanguard Cadets were terminated. I was blown off. 2) I reached out to the board (nearly every single one of them individually) in an escalated manner as appropriate and was blown off, and pathetic attempts to intimidate me with legal action were 3) I reached out to DCI and learned they are nothing more than very similar individuals from other corps running on the edge of collapse as well. They have done nothing. 4) I reached out to the Santa Clara Police (the authority over SCV's bingo license) and I can't say they are going anything or not, but it doesn't appear so. 5) It appears only the State of California is doing anything. They do it slow, but they have the least vested interest in doing anything. It is not their job to ensure the four prior mentioned actors do their job. The state merely plays the roll of warning the general public about SCV's non compliance. 5a) So it appears the CA DOJ will just eventually get to SCV, pull the plug on Nonprofit status, and by default as a requirement of state law Bingo will have to be shut down based on an enforcement action of the State, and the Santa Clara Police will be irrelevant as well. I think 2024 is that year for SCV. It can happen as soon as 17-JAN-2024, or from the looks of things the state takes sever more weeks than that. When everyone was operating under COVID it looked like the DOJ was slow to get to things. The last November notice was based on a previous notice from August as a result of 2021 being late (which still requires an audit). They they were given 60 days from August's 2021 first warning. Then with a much improved time line the second warning came in November, and another 60 days were given (which has us all talking, and that will be up in mid Jan). ******************* Now............... mechanically this doesn't stop idiots from running a tour. It's not against the law to get on the busses and tour until the money runs out. It also doesn't stop SCV from running bingo until someone with badges and guns comes to the front door and forces them to stop. They have been operating bingo illegally for a few years at least anyway, so why would they stop on their own. So this will probably drag on much longer than I might expect. Everyone should realize................... that the only actor doing their job (the State of CA) considers the start of this nonsense back to March-2020 and they will probably use that in consideration with their decision. ************ Now, this can all magically fix itself if by some chance SCV is holding in hand all the required filings and audits, but why are they dragging it out things so long?

I spent some of my marching years (1988-1992) with the SON of the parents that were stealing from Bingo. The same person I called out in 2005. I can't say when exactly it started, but more than likely long before that. It really is just what SCV is at its core. I've not discussed this much, but I feel conned, even more so than when I was on the board. I thought I was confronting a few bad apples. Nope, it goes all the way down to the bone. The core of what SCV really is will not allow itself to succeed. For Cadets that is dominated by sexual gratification. For SCV that is dominated by greed.

Here is what I do know (from experience......). Whatever I think the problem is, I am basing my opinion on incomplete information. So for the problem to be everything I say it is that means I am 100% right and there is nothing worse beyond my knowledge of unknown information. That of course is unrealistic, but I don't have a basis to say what exactly is worse. Now, a year ago at this time I did not have FY2022 financials. I do now. I was making my assessments on FY2021 financials and selective information SCV was putting out. So I was only speculating based on that they were going into FY23 unable to pay bingo salaries in several months. I was also having to default to their explanation that expenses blew out the results of FY22. When 2022 became available it showed at year end the liquidity position of SCV was negative. Which means, I gave them the benefit of the doubt that they were going to have problems with bingo salaries sometime in 2023. Nope, it started sooner than that (reality was worse than my estimate). It started before 2022 even ended. SCV had blown through $1.8M of reserves savings in a single year they had been holding for a decade. Their financial problems were also not nearly as much of an expense management issue as it was a revenue one. I can claim the Board President is a liar. I have the e-mail chain to prove it. At one point SCV with the same resources had two Corps, and two Winter programs, and was able to save up $2,000,000. Folks are sucking bingo dry. There are all these people getting 6 figure checks for doing nothing (legally), and they are riding the backs of people making slightly more than minimum wage who are entrusted with large piles of cash (and no oversight). Wherever there is opportunity it will be taken advantage of. I look back, and I realize, oh this is the norm for SCV. The period of prosperity was an exception that was heavily dependent on two people running operations and Bingo. When those people left SCV went right back to what it has always been. SCV's Bingo situation is such a ripe resource they have been skirting along nearly their entire existence and still managed to pull off a touring corps. When that got cleaned up from 2008-2013 it's full potential was shown with two touring corps, and two winter programs. But that was only 5 years in their existence. When people steal, enough is never enough. They got away with it yesterday, why wont they get away with it tomorrow. These things always eventually collapse.

That's all spot on. So why is it taking so long (going on 5 years now). The bigger problem is Bingo profitability collapsed while revenues still dramatically rose. While 2022 did see more expenses, I would call it slightly higher than the previous touring year's expenses, so it was manageable . Where SCV took it in the shorts was Bingo net income decreased over $1M, while revenues increased over $6M. Now they have a Bingo manager working remotely from Hawaii, no one on the board is tracking anything or holding anyone accountable to the revenue and expense streams. In order for accounting to happen remotely absolute trust and competence have to be the foundation of the system. Otherwise, those questions I have regarding Bingo Operations are simply going to be hidden from the bookkeeper in the information that is not given to them regarding operations. **************** I'm convinced no one was opening the mail and the board was totally broadsided when I made public the Delinquency Status. It could very well be they don't even know it to this day. There is a lot of lying going on in the internal operations of SCV, and the board is entirely remote, and they cannot validate anything.

Fiscal year end for 2019 IRS990 shows a loss of $545K before COVID hit the world (the worse financial performance ever, and by a lot, and in the face of a record revenue year, and Bingo record income). The new CEO was already in place with a plan to terminate the Vanguard A-Corps before COVID shut everything down. Had 2020 still been a normal competitive year SCV was going to make a farce of it. They totally squandered two years to figure things out without any of the logistical complexities to actually execute.

Yes, but it's going on 5 years now. Worst case scenario would be to simply enter starting balance sheet numbers in the new system and go forward with new entries for revenue and expenses from there. If one wants financial history (which SCV clearly is not tracking) then simply pull up the old reports, if one wants to trend them together well, bite the bullet and just make a report from scratch in Excel. Clearly however, no one is tracking anything. At least they do not convey an acumen over SCV's business model. Shutting down the corps and effectively zeroing out all non Bingo Revenue streams created some very big problems with gambling law compliance.

I honestly can't attest to why they have the problems they have. They DID have a bookkeeper from an outside firm. Apparently that stopped. I'm not buying their explanation. They had been using Quick Books forever, how changing to a different software all the sudden prevents them from tracking finances for 5 years is pretty concerning. Right?

The ONLY new person running SCV is the CEO, the CFO herself has been there since 2016, and was the treasurer at the time the delinquency started, the board President at the time SCV defaulted on loans and closed down the corps, and the CFO as SCV continued to receive elevated DOJ notifications. At every point along the history of failure she has had 100% oversight of finances. The CEO is neither the final authority for SCV policy, nor compliance, and does not have the authority to remove the CFO.

I have personally given DCI everything and more. I filed multiple ethics complaints (evidenced with violations in accordance with DCI ethics and standards required of participating organizations), handed DCI the CA DOJ letters on a silver platter, handed them the delinquent status the DOJ has placed SCV in on a silver platter. I set these communications to the Ethics mail, and the individual emails of every single DCI Board Member. Things are simply going to get to the point where the State of California acts upon the notifications they have been giving SCV and revoke their non profit status as already requested of the California State Franchise Tax Board. SCV is in violation of: Santa Clara Bingo Ordinances 5.75.060 Eligible organizations. 5.75.080 Exclusive operation by members of the licensee organization. 5.75.150 Profits to be kept in a separate fund or account – Records. 5.75.190 Licensee organization’s submittal of financial records. 5.75.270 Suspension and revocation of bingo permit. State Law CA Gambling Laws § 326.5 - Payment of Bingo Staff with Bingo Revenues. CA Gov Code. 12586 - Failure to submit Audited Financial Statements Cal. Code Regs., title. 11, § 999.9.4 - Solicitation of prohibited donations as a delinquent entity Per the law, SCV is eligible to have $80,000 in fines imposed upon it, their nonprofit status removed, and Bingo License revoke. These complaints are evidenced and documented, and submitted to the State and City. SCV is just meandering along presuming regulators will simply never act. They are mistaken.

I think it is safe to assume one can take the California Department of Justice literally over anything SCV says. Also............. in regard to the Troopers. This is how lazy DCI is: By default the IRS will terminate an organization's nonprofit status when they do not file taxes three years in a row. It's not a complicated process. POOF!!!!!!!!!! done deal at the Federal level. SCV was one year away from than happening, and probably would have been oblivious to that as well had attention not been drawn to them.

Yep, California is a hellish regulatory state. I get to see every single correspondence between the DOJ and every nonprofit in the state. I've not found other states to be like that. Everything I've been harping at has been a result of State DOJ disclosure, nothing SCV has provided. I've totally written DCI off....... it was very recent DCI rejected my notification to them Cadets are out of compliance in PA The CEO of DCI e-mailed me, blew me off, and chose to take the word of a defunct predator enabler organization. I had literally forwarded to DCI the direct communication from the Pennsylvania Department of State, and that was insufficient. I had literally forwarded DCI the DOJ notices and explicit details of DCI ethics violations. Crickets........ Corps get to continue on doing what they do because no one will do anything at all the levels of preventative measures that are supposed to be in place.

That's probably more likely with SCV than anywhere else (with the exception of Cadets).

The below link is a depository for 990's DOJ notices, and relevant laws and ordinances SCV must comply with http://www.truthindrumcorps.com/ I haven't uploaded the latest DOJ notices or the 2022 990 yet, but those are available through there relevant sources. I cannot refute the shown auditor statement. Nor do I suspect it. 2018 numbers are good, and they attest to 2019 numbers (all be it, it took till 2022 to get there). A possible explanation for a quick audit is the CPA firm has been providing the bookkeeping of SCV via an hourly bookkeeper service. So the audit process has probably started BEFORE the actual year end. This was the practice when I was the SCV Treasurer. **** Disclosure: I Richard Lesher, CFA/MBA and Captain US Army Reserve (current job) served as a board member of SCV from 2006-2012, and am the longest tenured SCV Treasurer since 2001. The CPA's that SCV uses were the ones we used while I was there. I am the one that set up the bookkeeper relationship through the CPA firm because SCV couldn't be trusted to hire their own. I have the current CPA firm in my e-mail address book from that history. **** I cannot "confirm" the accounting situation. I have sources I highly trust that said SCV got rid of the CPA firm bookkeeper and started doing bookkeeping in house. So I speculate there is no bookkeeping going on at all, certainly not to the level it would make simply filing the 990s very easy. Otherwise this wouldn't drag on like this. CFO CEO situation: 2019 Charles Frost (championship 2018 CEO) left SCV. 2020 Brett Bernardini CEO makes a mess of things while COVID is going on and gets fired. 2020 a combo team of current board members become CEO/CFO Jeremy Van Wert had about 1 year on the board before he became CEO. The chosen CFO Mike Kovalich had been serving on the board since when I had left the board so at this time he's looking at 10 years of experience. 2021 and 2022 are under the management of Mike and Jeremy. There are no corps operations going on, they have more than two years to figure things out. DOJ delinquency started back in 2020. 2022 Mike K retires ( I get it, he's an old guy, and was there way back when I was on the board, and he was old then). Now............. here's the kicker. Jennifer Bauman becomes CFO in September 2022. Jennifer Bauman started on the Board of SCV in 2016 Director 2017 Treasurer 2018 Treasurer 2019 Treasurer 2020 Treasurer 2021 President 2022 President 2023 CFO That creates a pretty big problem doesn't it? She was in charge of SCV's finances from the time they were perfectly compliant and under the guidance of a CPA firm bookkeeper, to the time they started their delinquency, to the time they ran the finances into the ground, to the time both drum corps were shut down, to the time the DOJ issued a warning that the State Franchise Tax Board has been asked to revoke SCV's nonprofit status. Sometimes a duck is nothing more than a duck.