Holbrook Little League: Jackson team finances in disarray after Little League World Series

Read this APP exclusive investigation on Holbrook Little League's fiscal issues and tell us what you think on Facebook.

JACKSON - Where is the money?

It had been three months since the Holbrook Little League’s team of 12-year-old All-Stars – their “boys of summer” – went on a miracle run to the Little League World Series in August. Twelve families put their summers on hiatus, traveling with their sons to games in Connecticut and Pennsylvania, and spending thousands on hotels, gasoline and meals at rest stops along the way.

But thousands of dollars for support had been raised, they’d been told – fueled by an online campaign, the sale of donated T-shirts and contributions memorialized with oversize checks. Certainly enough had come in to cover at least part of the parents' $4,000 to $6,000 in expenses.

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But the euphoria that came with reaching Williamsport gradually turned sour, as days turned into weeks and months without reimbursement. Marianne Kinsman, the mother of Holbrook infielder Ryan Kinsman, was among a chorus of families compelled to ask the League officials a simple and persistent question: "Where is the money?"

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The money finally showed up in early December – about $1,600 per family, according to parents interviewed by the Press. It was appreciated, but questions about the slow reimbursements and the League's refusal to release financial documents became a microcosm of what parents say were ongoing fiscal problems with Holbrook.

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As it turns out, those worries are only part of the story. An Asbury Park Press review of Holbrook’s publicly available financial documents shows a Little League charter in disarray, with no semblance of accountability, described in a video at the top of the page:

Holbrook hasn’t filed nonprofit tax returns with the Internal Revenue Service in three years, calling its tax-exempt status – a critical fundraising lifeline for nonprofits – into question.

The state Division of Consumer Affairs lists the league as “non-compliant” with state laws requiring annual financial statements filed with the state.

Despite holding a mandatory annual raffle among Holbrook families, Holbrook has never obtained a township-issued license to have a raffle.

Board President Tony Del Vecchio and Treasurer John Lehmann resigned at the same time in January. No explanation was provided.

The last tax return filed in 2014 showed the League lost more than $6,000 after raising more than $264,000.

The community questions over Holbrook's finances have overshadowed one of the feel-good stories of the summer. Instead of savoring the team's inspiring ride to the Little League World Series, where the team finished fourth in the United States, parents instead say they are frustrated by the board's unwillingness to answer basic financial questions. Some say the concerns over money call into question whether the league can even survive.

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“The whole thing was a great experience, but it just took so long to get money from the league afterwards," said Rob Arent, whose son, Mike, played a number of positions on the Little League World Series team.

None of the four remaining board members responded to phone calls or emails from the Press seeking comment. Neither did Del Vecchio nor Lehmann.

“This is so typical,” said Kinsman, about the League's unwillingness to answer parents' questions. “Anytime it has anything to do with money, they just skate around the issue.”

Kinsman and Arent were just two of many parents interviewed by the Press who questioned Holbrook Little League’s fundraising for the Little League World Series, including a few who would only speak on the condition of anonymity out of fear of retaliation against their children who play for Holbrook.

The Jackson-based league, a local institution, provides baseball and softball activities for hundreds of kids between the ages of 4 and 16.

The questions from parents have only mushroomed since August. Despite registration days held this month, parents say they have become increasingly concerned that the league is facing financial insolvency: The league lost money in the 2013, according to the last time it filed a federal tax return, which can be seen below.

Plus, parents are now getting even fewer benefits from their registration, Arent said. When his two boys first joined Holbrook, the approximate $300 registration fee per child – not including a $50 mandatory raffle ticket – came with a complete uniform. “Now, you get a hat and a T-shirt,” Arent said.

"It took a lot longer than we were told or expected," another parent said. "And a lot of stuff wasn't answered."

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Assistant coach Jim Osmond, father of players J.R. and Andy, said he had faith in the system. He was “kept in the loop through the whole process." The plan all along was to make a “grand demonstration,” a ceremony where players would receive trophies and end-of-season awards and parents would get reimbursement checks.

But that demonstration never happened.

Holbrook has scheduled a general membership meeting at 7 p.m. Thursday at the league offices on Bartley Road.

‘Non-compliant’

Holbrook Little League is registered as a 501(c)(3) charity with the Internal Revenue Service, which allows donors to deduct their contributions with a 50 percent tax write-off.

To maintain tax-exempt status, nonprofits must file an annual tax document – Form 990 – with the IRS. But while the IRS still lists Holbrook as a “public charity,” a federal database shows the Little League hasn't filed a tax return since the 2013-14 fiscal year.

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They’re the only one of the 11 Little League charters in District 18 without a tax return in the last three years.

The tax returns that the League did file also raise questions about the league's financial health. While the forms from 2011 to 2012 show an increase from $216,000 to $286,000 in revenues, the league closed the 2012 fiscal year operating at a loss of $3,794.

Included as an additional expense that year? About $14,900 spent to "balance the books" – with no further explanation provided.

The next year, revenue dropped to $264,000 and showed the league with a $6,501 deficit. Nearly $39,000 was spent on maintenance at the League's Bartley Road property, with another $53,493 spent on uniforms and $21,116 on sports equipment.

It's the last Form 990 on file with the IRS.

A nonprofit could face punishment from the IRS “as soon as they don’t file an initial return,” said Carol Egan, a certified public accountant with the Cowan, Gunteski & Co. firm in Tinton Falls.

The IRS imposes a $20 per day penalty for each day a nonprofit’s Form 990 is late, up to a maximum $10,000 fine. Those penalties are for each individual return. In Holbrook’s case, the three years of missed returns could mean up to $30,000 in fines for the Little League.

Also, if a nonprofit goes three years without filing their Form 990, the IRS can revoke its tax-exempt status – a death knell for many charities that rely on donations from those seeking the tax write-off.

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“It might take (the IRS) a little while to find out about it, but if they haven’t filed for three years? I’d be surprised if they haven’t already gotten IRS correspondence,” Egan said.

And once a nonprofit loses its status as a tax-exempt charity, it must reapply for that status – a "very involved process," Egan said – and there are no guarantees that they get it back.

The missing IRS paperwork is one of a litany of apparent financial miscues at Holbrook Little League, all the way down to the municipal level.

The league is in possible violation of New Jersey’s Charitable Registration and Investigation Act, as it hasn’t filed annual tax documents with the Division of Consumer Affairs since 2011. The league is listed as “noncompliant” by the agency.

And despite requiring parents to purchase a $50 raffle ticket as part of their child’s registration each year, a public records request revealed that Holbrook has not requested a raffle license from Jackson Township in at least 10 years, eschewing state laws on legalized games of chance.

In interviews, several Holbrook parents expressed concern about the way the raffles were organized, particularly the disclosure of who won the money.

When Nicole Arent asked who won an annual raffle, her husband said Del Vecchio refused to disclose a winner. And when another parent won the raffle, she was told the money wouldn’t be available for a few weeks.

The league's expenses include a $400,000 mortgage on its property from Lakeland Bank, with a monthly payment of more than $3,100, according to the last tax return filed.

When asked about the concerns being raised by parents about Holbrook Little League's finances, Kevin Fountain, Little League's national media relations director said all decisions would be made on the local level.

"While each situation is handled on a case-by-case basis, the local league’s board of directors should be able to handle financial situations through their local league constitution," he said.

'Don't ask, don't tell'

“Expense, expense, expense!”

That’s how Del Vecchio described the struggle faced by parents of the 13 children – including two brothers – who represented New Jersey and the Mid-Atlantic Region in the Little League World Series, on a GoFundMe campaign he set up on Aug. 2 to cover the costs the families faced.

In the GoFundMe post, Del Vecchio promised "All donations are greatly appreciated and all proceeds will go to the families!"

From mid-August to September, 102 patrons donated $6,675 – which didn’t even include the thousands collected in big-check presentations and fundraisers at local businesses, including $2,000 from the Asbury Park Press. And by December, the Holbrook parents still hadn’t seen a dime.

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The Press interviewed the families of nine of the 13 players on the Little League World Series team, and most expressed concerns over how Holbrook collected and distributed fundraising money.

Emails to Lehmann, the treasurer, about the money went unanswered, multiple parents said. When Del Vecchio responded, the responses “were not very nice,” Arent said.

Del Vecchio told parents he’d run into problems trying to collect the money raised by GoFundMe. And when Nevin Mann finally got hold of Lehmann, he asked for a copy of the league’s financials – and was told it wasn’t ready. Neither were the financials for the previous year.

A spokesperson for GoFundMe said they couldn’t confirm whether the money had been released. "We're collecting additional information about this campaign," he said, reiterating that "donors are fully protected by a refund policy if misuse occurs."

“There’s always a climate over there of ‘don’t ask, don’t tell,’” said Mann, father of Holbrook pitcher, Tai. “‘How dare you challenge anything?’”

And the ones that did risk a challenge? They feared for retaliation against their children still playing baseball and softball at Holbrook.

“We think things have been going on for years and years but, in my head, I’m like: ‘I can’t do anything because they’ll take my kid off the team,’” Kinsman said. “You want to call their bluff but, if he takes him off the team, who are you going to fight?”

But that didn't mean that parents weren't asking questions. Anonymous posts began appearing on social media asking where the money was, speculating about what businesses had donated more money than the parents had received, and questioning the difference.

Holbrook was so concerned over rumors being posted anonymously on social media that they held a parents meeting on Nov. 15 to explain the money distribution and to dispel several rumors. In a handout distributed that night, league officials itemized that they had received $12,000 and would distribute $1,000 to the 12 families.

But Holbrook also listed "pending" money that included $6,675 from GoFundMe, which it said was not yet released "pending approval and acceptance of nonprofit status," and an unknown amount coming to Holbrook from Dick's Sporting Goods.

Check out this breakdown of Holbrook's Little League World Series fundraising below. The article continues below.

To stop the questions, parents were also expected to sign a form that the league had "satisfactorily dispelled all of the above falsehoods," and asked that the "social media attacks please stop and the posts in questions be removed."

And even then: The money still wasn’t distributed. The checks weren’t cut until Dec. 6, about $1,600 per family – boosted by an extra $500 donation from cross-town rivals Jackson Little League, according to a Dec. 5 email from Del Vecchio.

The Jackson Little League donation was not included in his earlier letter.

The Press’ $2,000 check was issued to Holbrook on Aug. 22 and cashed three days later; the parents didn't see the money until December.

The GoFundMe online campaign only made up about 35 percent of the nearly $19,000 raised, according to the Del Vecchio letter. Approximately $12,000 was collected from various local businesses and booster organizations, including the Press’ contribution and $3,000 in the sale of donated Holbrook T-shirts.

Continuing questions

The questions about the league have continued, and increased, after parents learned of the resignations of Del Vecchio, the president, and Lehmann, the treasurer. Parents said they were never provided an explanation for the resignations.

Late last month, shortly after Del Vecchio’s resignation, parents were even wondering whether the league would still be in existence.

“Will there be a Holbrook this year? Should I just take my kids to Jackson Little League,” one parent wrote on the league’s official message board. “Just wanted to know who’s in charge.”

Board Secretary Annie Klimovich – one of four remaining executive board members, none of whom returned calls seeking comment – joined the conversation to reassure that parent that the Board of Directors was in charge and that the League would go on.

So do the questions about the money, and where it went.

One parent said he had to keep answering questions from donors he'd run into throughout Jackson: "People that had donated kept saying to me, 'Hey, did you get the money that our organization donated to your cause?' I was like, 'No. We hadn't received any money yet.'"

“Our kids were in the Little League World Series," said Kinsman. "They raised all this money for us and we kept trying. … When we got back, asking ‘When can we get that money?’ They threw us off until November.

"That started raising questions with all of us."

Mike Davis; @byMikeDavis: 732-643-4223; mdavis@gannettnj.com

Sherlon Christie; @sherlonapp: 732-643-4086; schristie@gannettnj.com

Steve Edelson; @steveedelsonapp; sedelson@gannettnj.com