QUESTS Corp. is out of business, but the founder of the Spokane children’s charity never has been in bigger trouble.
Letha Collins will be arraigned next week on a 24-count federal indictment accusing her of running an illegal money-raising scheme involving tons of surplus food.
Collins and her son, Darryl Hutchison, are charged with conspiracy to defraud the federal government.
They also are facing 20 felony counts of actual fraud, covering shipments of surplus food received by QUESTS between September 1990 and November 1993.
Assistant U.S. Attorney Tom Rice said the scheme bilked the government out of an estimated $22,000 worth of food earmarked for the poor.
“These people were stealing food from the homeless and the needy,” Rice said.
Collins and Hutchison, who served as QUESTS manager and vice president, also are set to stand trial Oct. 23 in a consumer-protection lawsuit filed by the state attorney general’s office.
That lawsuit seeks more than $220,000 in civil penalties and restitution for the Spokane Food Bank and private foundations and businesses that contributed to QUESTS based upon alleged misrepresentations.
QUESTS obtained an estimated 110 tons of surplus government food over a five-year period. The group claimed it was being used to feed foster children at its facilities.
But federal authorities say Collins and Hutchison lied about operating a soup kitchen.
They sold and bartered much of the free food, ate some and allowed the rest to spoil, according to authorities.
The money filtered through QUESTS, which in turn paid the mortgage on Collins’ Mead home, Rice said.
The attorney representing the pair said there is nothing sinister about the way the organization was operated.
“I don’t believe either Letha or Darryl meant to intentionally defraud anybody,” said Rob Cossey of Spokane.
“They just did things naively,” he said. “What they were attempting to achieve was to help people.”
For years, QUESTS received quarterly food shipments from anti-hunger programs managed by the U.S. Department of Agriculture. In July 1993, the Defense Department chipped in, sending 108 cases of military-style ready-to-eat meals, records show.
In the federal grand jury indictment, Collins also is charged with three counts of making false statements to the Department of Agriculture in applying for the food and maintaining the pipeline.
Each of the 24 counts carries a possible five-year prison term and a $250,000 fine.
Surplus foods obtained by QUESTS went far beyond milk and cheese. Shipments included large amounts of hamburger, frozen chicken, canned fruit, applesauce, orange juice, spaghetti, peanut butter and sacks of oats and rice.
“It’s a real grocery list,” Rice said.
Collins, 53, and Hutchison, 32, who now live in Montana and declined to comment, are “totally in shock” over the criminal charges, according to Cossey.
“This is the worst-case scenario that I could have imagined,” he said.
In applying for surplus federal food, Collins said her charity operated a kitchen helping “abused, abandoned and neglected children.”
She said she wanted to raise money to build a ranch complex for abused and troubled children near Deer Park.
In 1989, with donations from the prestigious Comstock Foundation and other philanthropic groups, QUESTS bought the 120-acre ranch for $103,000. Collins was on welfare at the time, state records show.
But QUESTS was not licensed to provide group foster care, and it did not operate a group home or soup kitchen for 54 foster children as it claimed on its application, authorities said.
The Internal Revenue Service revoked QUESTS’ non-profit status in early 1994, and the ranch property has been sold.
The federal investigation into the organization’s activities began in November 1993 after The Spokesman-Review published a story exposing the surplus food pipeline. Distribution of government food to QUESTS was suspended immediately.
Cossey said his clients “were just basically trying to create something and were in over their heads.”
, DataTimes ILLUSTRATION: 2 Photos (1 Color)