FAYETTEVILLE -- A co-founder of a Springdale nonprofit pleaded not guilty to federal fraud charges in U.S. District Court on Wednesday.
Lacey Christina Carney pleaded not guilty to one count of a federal indictment for conspiracy to commit wire fraud. She was released on $5,000 unsecured bond and is to be back in court March 3.
Lacey Carney and her husband, Jason Boyd Carney, are the co-founders of 2nd Milk. The nonprofit was formed to provide orphaned infants in Africa and around the globe with nutrition, training, establishing farms, drilling wells and sending children to schools, according to the indictment. It was funded through donations, child sponsorships and direct solicitations for cash and gifts of stocks.
The charity took in revenue of $3.2 million between 2016 and 2022, according to the indictment.
Jason Carney pleaded not guilty earlier this month to 11 counts of wire fraud, one count of conspiracy to commit wire fraud and three counts of structuring financial transactions to evade tax reporting requirements. Bond was set at $5,000, and Carney was ordered to surrender his passport and have no contact with victims or witnesses. He's set to appear in court again March 3.
The Carneys were ordered to not liquidate any assets or accounts without approval from the U.S. Probation Office or open any new financial accounts. They also were ordered to surrender their passports.
The charity's website represented that 100% of sponsorships would go directly to help children in Africa, according to the indictment. The website listed children available to sponsor with an infant's biography, picture, weight and why the child was available for sponsorship.
The Carneys devised a scheme to convert donations to the charity to their own use and concealed the scale of the thefts by making misleading and false claims to donors, according to the indictment. The stolen money was used for personal travel; payments on a home, auto and boat; personal credit accounts; routine living expenses; cosmetic medical expenses; and discretionary spending while maintaining they collected little or no salaries, according to the indictment.
The couple concealed their use of the charity's money by overstating the amounts spent by the charity and overstating the scale of the charity's work and the true disposition of the donations, according to the indictment.