"There was too much trust placed in this one person… to run the organization," US Postal Inspector Basil Demczak told us.
That "one" person is Margaret Davis, the long-time program director of the National Black Nurses Association.
"She was a person everyone trusted, she was the go-to person, she was the one politically connected and people assumed she would do the right thing… and that's where things broke down," said Demczak
One of Davis' responsibilities was to apply for grant money. Davis told agencies the money would be used for health care advocacy including student nursing assistance.
"She knew how to write grant applications and it was very simple for her to do what she has been doing for a long time, then at one point she decided to go the wrong way," Demczak said.
The money started going directly to Margaret Davis and an accomplice.
"It was a total of approximately 15 grants over 1 million dollars in grants and half a million dollars was diverted to benefit the defendant," Demczak said.
Where did the money go?
"Typical fashion of what fraudsters do… used it to pay credit cards, personal things, mortgage, family and friends," said Demczak
Also… big vacations.
"Lavish trips at the expense of these student nurses who should have been receiving training," Demczak said.
Postal inspectors began tracking the case and found many in the nurses association were unaware of what has happening.
"People in the organization had no idea these grants were even applied for and awarded in their own organization," Demczak told us.
Inspectors say "checks and balances" are key for any organization.
"You have to have good segregation of duties and you have to have oversight on your board otherwise things like this happen," said Demczak
Davis pleaded guilty to 14 counts of mail fraud and two counts of money laundering. She was sentenced to almost 4 years in federal prison and ordered to pay more than $370,000 in restitution.
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