Richard Lesher

Yea, new little things happening, but it looks like a bunch of "no substantial data".

Even in an incomplete status, the DOJ seems to publish whatever documents are submitted by the organizations. My point..... I do not see the IRS 990 for 2022, I see it for 2021 even though there is no 2021 audit, but I see neither for 2022, which would indicate that SCV has not even completed 2022 financials which would indicate a very long road toward getting an audit for 2022, and that road is WAAAAAAYYYYY LOOOOOONGER than what has been communicated as the time frame by the DOJ towards termination of SCV's non profit status. ***************** A WHOLE YEAR HAS BEEN SQUANDERED!!!!!!!!!!!!!!! SCV has been lying since September 2022.

Not explicitly, they have implied as much, but the CA DOJ actions have always continued to escalate.

There is nothing to indicate as such. SCV's communication tactic has been to string folks along until the next issue arises without any verifiable progress hoping the previous issue was forgot. All of these problems are stacking on top of each other, and will be reviewed as a totality among them, not independently.

Let's not get distracted folks. The CA DOJ just updated SCV's pending status for the 2022 filing https://rct.doj.ca.gov/Verification/Web/Search.aspx?facility=Y

When I was on the board, it was effectively ALL OF IT. To the point SCV had an ATM in the building. No credit cards were accepted. That said, I would hope they migrated toward cards and electronic sources of payment. After the bingo fraud, it was a major pain to keep tabs on things, and it can only be done manually, and is highly dependent on a system of double custody. I couldn't tell you how much of Bingo is Cash/Card, and neither can SCV, at least not with audited financial statements.

You're not only new to this thread, you're new to DCP, and this is the thread you choose to participate in, and go straight to the last post and only focus on the Hawaii aspect?

What I deduce is with the operational debt that SCV defaulted on that could have happened at any moment. Let me define operational debt: The debt that is carried more or less like short term credit where purchases are not needed up front. Food, fuel, things that are expected to be paid within 30 days and no terms of extended credit are expected. SCV defaulted on those vendors during the course of the season. SCV logically decided to default on the little guy verses defaulting on debt secured by their building or vehicles. However if the food vendors or any other critical vendor (oh probably charter busses as well) decided not to let SCV skirt along during the course of the season then that would have immediately forced everyone to pack up and go home. ************ Now, since I don't have 2022 financials, and since I don't have details about the 2022 season I am only speculating with the disclosures SCV leadership has shared in regard to working with vendors they owe money, then I can work with my understanding of SCV finances and operations (as a prior Treasurer that set up their operating capital structure) Defaulting on tour vendors is basically, food, fuel, and chartered fleet (tractor trucks, and busses with corresponding drivers), perhaps some performing equipment and props (but most of those are sponsor given). So if SYSCO said hey, you are not getting your next food drop, or no more food on temporary credit then what would happen? ************* I strongly speculate that SCV is starting FY24 in a weaker position than they started FY22, and they have stacked on so much more overhead than they had before. They are not getting the member fees from the cadet corps (nor the corresponding volunteer base), nor are they able to tap into donations. So that's around $1,000,000 they can't pursue. They are trying to operate a world tour season with Bingo and member fees alone. While bingo can be a substantial revenue stream, the guy in charge of it's entire oversite is working from Hawaii, and they are in violation of many state and city laws and all impact Bingo. Oh, and the expense model running bingo with paid staff is twice as costly than having used volunteers which SCV donated funds to their corresponding nonprofits they were volunteering for.

Here's another problem, and for the last 12 months I've been wanting to pounce on this from day 1 I called BS. A lot of people convincingly held me back at the time, and now those last few voices over my shoulder asking me to wait have had a change of heart as well. Below are the Santa Clara City ordinances that governs SCV's bingo license which they are currently in violation or dangerously close to violating. https://www.codepublishing.com/CA/SantaClara/html/SantaClara05/SantaClara0575.html#5.75.040 5.75.060 Eligible organizations. As soon as they expire as a non profit, this is a done deal. 5.75.080 Exclusive operation by members of the licensee organization. This covers paying employees, and without member fees and an inability to solicit donations this is a clear violation as well. 5.75.150 Profits to be kept in a separate fund or account – Records. I have no proof, but I suspect an audit will determine this. SCV also doesn't have audit financial statements to say to the contrary either. 5.75.190 Licensee organization’s submittal of financial records. The licensee organization shall submit annually to the City the forms it submits to various government agencies to maintain the status that makes it eligible to operate a bingo game. These forms may include, but not be limited to, CT-2 (California Attorney General), Form 199 (California Franchise Tax Board), Form 990 (Internal Revenue Service), or equivalent forms. The licensee organization shall notify the City in writing of its fiscal year. The forms are to be submitted within three months of the close of the licensee organization’s fiscal year. There shall be a fine of fifty dollars ($50.00) per day for each and every day the financial records are late. (Ord. 1658 § 1, 6-28-94; Ord. 1729 § 1, 4-6-99. Formerly § 22-31.19). This one is the one that is clear as day. The CA DOJ says as much. *************** They are soon to not be an eligible organization. They are violating payroll laws both state and city. It's highly likely they are comingling funds, and don't have audited financial statements to say otherwise. They are not providing required forms and registrations ************** Anyone of these can result in bingo penalties. The $50 a day fine for failure to provide required forms amounts to $56,500 as of 7-DEC-2023, and another $10,000 can be imposed for the payroll violations. These have been going on for years, and all of them are within the jurisdiction of the City of Santa Clara. Time to go to a City Council meeting.

I suppose they could go back to 2021 notifications. So that could mean any moment.

oh no............ I'm a horrible reader.............. I was too focused on the dramatics. From the top of page 2. The DOJ has left itself room to just close this out whenever they want.

Those same odds apply to SCV winning DCI ever again. Mandarins will win DCI before SCV does again.

If SCV loses the nonprofit status, and with it Bingo I don't know how they would get it reinstated. I suspect they wouldn't know how to get it reinstated either, because keeping it would have been the much easier pathway.

Well......... physically............. nothing is stopping a bunch of people from getting on busses and touring around the country with instruments and marching around on a football field until they run out of money lord knows where. It wont be the first time that has happened, and apparently, that almost happened to SCV in 2022. I totally see a scenario where the bingo plug is pulled, the delay of that information is a month or so to the rest of us and SCV decides to go on the road anyway with whatever they have in financial resources. I presume (wild guess) they could take a line of credit against the Bingo Hall which is worth several million as a parking lot alone. The priority is image. Legal compliance is a distraction.

Well, from the looks of it, no one cares what SCV does. Not anyone with enforcement authority. The DOJ continues on it's time line, and SCV is currently on a trajectory to be delisted as a Non-Profit. This effectively will disqualify them from operating Bingo. From there all other things collapse. The latest DOJ notice is dated 16-NOV, with a warning the Tax Board will be notified to remove SCV as a nonprofit. At the end of 60~ days should follow a notification with "Intent to Revoke" nonprofit status, and then another 60~ days to response. Should those notices go unheeded then a notification of "Cease and Desist" will be issued, and it is at this point that's that. So 4-6 months from 16-November is when that should unfold. ************** One needs to consider from the DOJ's perspective they will take into account the totality of the circumstances that started the persistent delinquency going back to 2020. The most heavy of those circumstances being the organization has millions of dollars available to it through Bingo sources. So why is the most basic of compliance, and annual registration so difficult despite having millions of dollars available to it?

Well, the problem is a board that is grasping onto power. One has to be a cool-aid drinker in order to get on the Board.

That is correct. In 2020 before things fell apart the board count was 17 (per the 990). The board membership hasn't been this low since the Bingo Fraud of 2005.

Oh, clarification............ SCV rumor mill has been using the COVID excuse. I also believe COVID slowed down the DOJ.

When SCV originally went delinquent based on 2019 audits they were issued a warning in September and October of 2021 and given 60 days. They did not get another warning until 2023. COVID was still happening. COVID had bought them a lot of time (of which all was squandered). Now, when they were given a warning in August of 2023 that was for FY 2021 as FY2019 had been cleared up. However, 2021 never got fully cleared up (rejected) and the warning still stood. Here is the very important take away. The official SECOND WARNING from the DOJ was dated 16-November. That was only 85 days, not a year or more. The CA DOJ is operating much more in line with the timelines they provide now.

The easter bunny has it.

I totally got you..........

Virtual, I don't think anyone with any real power is stepping up and taking responsibility of executing action that needs to be done.

I noticed the bingo manager's wife is among the board members of SCV's past. What happened was they hired someone to replace the retiring Bingo manager, then he quit too not soon after. Then they were uh oh, what do we do............ So they ended up getting the husband of a board member to step in. He eventually retired from real employment and moved to Hawaii. SCV never bothered to replace him, so since everyone is working remotely why can't he.

COVID has delayed the CA DOJ, and they are really close to operating as normal.

Let me tell you............................. (again) At the end of Fiscal Year 2019 (Oct-31-2019) SCV lost $545,000 against their best revenue year ever ($5.9M) The Bingo Manager retired after 13 years (when she was in her 60's to boot when she started as a prior member parent and Board Treasurer). It was at this time the Director Charles Frost Resigned as well. So while SCV is still pre COVID they are now looking for two very key leadership employees. One to run the heart and soul of their Revenue Stream, and the other to run the entire organization When the Bingo manager retired they stopped using a volunteer base to run the bingo games. Previously SCV would reach out to other non profits (usually school booster clubs) and make a appropriate donation to said boosters for parental volunteers. It was through this mechanism it is legal to use Bingo money for what is effectively labor to run Bingo. SCV went to a full paid staff in 2020 with new Bingo management. Now, I understand it, this is easier to work with, and is less hassle with the turn over of volunteers and having to train people all the time. It does however cost twice as much. What was a yearly donation budget of $250K is now more than double that in Bingo staff payroll. OK, as well SCV hires a new CEO, and one of the first things he tries to do is terminate the Vanguard A-Corps, and only have the Cadets as a local west coast corps. Needless to say he ends up getting fired. Mind you, this is all BEFORE COVID!!!!!!!!!!!!!! So SCV is now in early 2020 without the foundation of a DCI World Class Corps. Before the CEO officially is on the outs COVID has started to take effect and Bingo operations are shut down by the state and county. Now, what SCV doesn't do is implement alternative health practices to operate Bingo (for example, BD stated calling Bingo numbers via the FM radio and people would play from their cars). The SCV CEO just decided they were doing to do nothing until they could operate business as usual. So we are into the Spring of 2020, the SCV CEO is fired, they are not operating Bingo, and COVID is hitting everything and no one knows what is going on with anything in regard to SCV's operations. OK.................. An executive team is compiled between two currently sitting board members, and they make a CEO and CFO team. Just about everyone (except Bingo operations and some fleet and building maintenance) are working remotely. What they do not do is pick up where Charles Frost left off at the end of 2019. Remember, they lost a CEO and their best Bingo manager in history at the same time, hired a lunatic to run the place, and then COVID hit. At the end of fiscal year 2020 they have $1.5M in investment savings. At the end of fiscal year 2021 they have $1.8M in investment savings. Now........... important note............ End of FY21 is the beginning of the 2022 season, and SCV is in a position to write a $2,000,000 check and it would be good on day one. So SCV leadership decided, OK we can do this drum corps thing. The last guy they had running the place left in 2019, and bingo has just been floundering along and the two guys they hired to keep the lights on have basically been working remotely for two years. The year end financials have not really been closed up correctly, they did the same for 2020 and 2021, and throughout 2022 the same thing happened. Now, what I speculate happened was as the tour went on there were challenges, none of which anyone in SCV leadership took the time to think through. COVID changed the game, no one took the time to consider the additional costs and logistical challenges and management just threw money at the solutions as they came up throughout the season. I speculate all this because at the end of the 2022 summer somehow SCV started defaulting on operational lenders (the folks they would never borrow from long term and usually pay at the end of 30 days, like food vendors, etc....). To me, as a CFA and prior SCV Treasurer that means they brunt through that $1.8M in investments they started with, and went beyond that, and went beyond the revenue stream they earned during the year to what mathematically resulted in defaults. Now we are in September of 2022 and it is announced that the Vanguard Cadets are terminated. OK, honestly, at this point I totally bought into the COVID is hard excuse. I truly did. However, SCV continues to conduct auditions into December of 2022 and right on the heels of a December audition they announce that the Vanguard A-Corps is going to not tour either. OK.............. they are lying now. How could they not know they can't pull off a season until the very last moment they are taking audition money? I call BS, and become the Emperor of Drum Corps Trolls. **************** Turns out SCV started violating California State Charity Laws when their registration expired in March of 2020 (the time the lunatic CEO was causing all sorts of nonsense). SCV is notified by the California Department of Justice in Nov-2020, and Sep/Oct of 2021 they are delinquent. While never actually getting back on track SCV then continues to operate a tour in 2022 while entirely in delinquency. All solicited donations since 2020 are in violation of California Law. It is not until the spring of 2023 do I make public that SCV is in violation of CA Law, and only at this time does SCV finally make any sort of effort to slow down their visibility with donations. Now we are in April of 2023, SCV is making all sorts of excuses. April passes May Passes June Passes July Passes August rolls around and there is another violation notification from the CA DOJ. Just days prior the Treasurer of SCV resigns (he is currently a BD board member now). September rolls around and the new CEO is giving the impression everything is going to be OK. October passes, SCV starts submitting much tardy financials and registrations to the State, and finally clear up fiscal year 2019. However, 2021 is now the cause of the continued delinquency status. In fact, 2021 was rejected for administrative errors, and the financial audit did not accompany it. Fiscal year 2022 is also pending. November rolls around and the DOJ issues a second warning for the delinquency now tied to fiscal year 2021. The DOJ uses vocabulary that now includes the State Tax Board as the DOJ is going to request the Tax Board revoke SCV's non profit status. That's where we are today. All things being equal, SCV is technically 120 days from 16-November from having their non profit status revoked.