Jason and Lacy Carney
2nd Milk, a Christian charity claiming to feed underprivileged children in Malawi has been exposed as a fraudulent operation designed to give the owners access to significant donor funding that they use to fund a luxury lifestyle. Financial statements track how the charity founders pocketed most of the money donated to the charity, ramping payments to themselves up as authorities started looking at their charitable businesses more closely.
GOLDEN MATONGA & GODFREY MAOCHA
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ason and Lacy Carney are an American couple who tell a good, Christian story about saving the lives of malnourished and orphaned children in Malawi through their charity named 2nd Milk. The story is persuasive and gets donors in the United States to open their wallets. However, financial statements tell a different story. The truth is that the Carneys used the money–mostly– to fund their luxury lifestyle.
An investigation by Platform for Investigative Journalism (PIJ), based on documents obtained by police in the US and from Malawi’s NGO Authority (NGORA) through an Access to Information (ATI) request, interviews with former employees, and open sources, shows the couple, through the organisation, raised a total of $2,371,314 (some MK4.1 billion) between 2016 and 2023 donations.
However, the investigation also reveals how the majority of the funds appear to have been abused by the Carneys, funds in the official accounts were either directly used to pay for a luxurious lifestyle or transferred into personal accounts to pay for expensive vacations, including chartering helicopters, house or vehicle loans, cinema and even groceries.
Amid all this, the organisation appears to exaggerate the scope of its work in Malawi including claiming to feed over 1000 children in Malawi a day.
Under Watch
The PIJ first started investigating the Carney couple in 2023 when questions were asked about an adoption service they run in Malawi. The PIJ investigation showed how the Carneys operated a highly unethical adoption agency called Channel for All Nations (CHAN).
This organisation posted and promoted the faces of poor African children that were available for adoption with heart-wrenching text about their circumstances as if they were commodity products.
Not all children were without families, CHAN also broke the law by offering poor families gifts and money in exchange for agreeing to put their children up for adoption. The Carneys also run an orphanage called Esther’s House and another organisation called Pure Mission.
On its now-deleted website, 2nd Milk says the organisation also runs small programs in Ghana and Uganda. (PIJ did not investigate 2nd Milk activities in the two countries.)
A red flag for the US authorities that prompted them to start watching Carney more closely was on 21 March 2023 as Carney was about to board a Malawi-bound flight at the Atlanta International Airport. Customs and Border Patrol agents made a startling discovery. He was traveling with $68,000 in cash (about 117 million Malawi Kwacha). They asked him a few questions and let him go.
Anyone watching the Carneys on social media can see a couple living a double life. When not sharing graphic images of impoverished African children to accompany requests for donations, the couple offers a glimpse of a lavish lifestyle; from vacations to family celebrations.
A peek into the 2nd Milk books reveals how the Carneys pulled the feeding scheme scam off by massaging the numbers and overstating the work being done to feed hungry children in Malawi. The 2nd Milk fundraising model is to ask each sponsor to donate $40 US dollars a month for each child that the sponsor wants to support. The charity’s documents show that each child could have up to two sponsors.
The charity, which is headquartered in Arkansas and Lilongwe filed tax returns in both countries. The PIJ can confirm that the returns filed in the US were completely different to the ones filed in Malawi. For example, between 2016 and 2021, tax returns filed in the US claim that 2nd Milk raised a total of $2,371,314 (around MK4.1 billion) over that period. Of the total raised, 2nd Milk stated that $1,941, 297 (about MK3.4 billion) was spent on "Formula and Supplies".
In the US, 2nd Milk did not post any labour costs and the only people who got paid salaries were the company Jason Carney As president on a $ 64,000 a year salary in 2020, and his wife Lacy, who as the chief financial officer.
That year, 2020, is an example of how the 2nd Milk tax returns, which had to be file din Malawi and in the US, told very different stories. The PIJ used open-source intelligence and Access to Information Act requests to find the original 2nd Milk tax filing for 2020..
The PIJ can show that Carney used 2nd Milk as his personal ATM by making transfers from the charity accounts into his own. He also used the 2nd Milk credit cards for personal expenses and banked 2nd Milk cheques as his own into his personal account.
From 2015 through 2019, 2nd Milk transferred from its Bank of the Ozarks commercial account at least $271,988.01 to a Chase Bank personal credit belonging to Jason Carney. Between December 2, 2022, and June 14, 2023, an additional $171,883.91 was paid from 2nd Milk's Arvest Bank account to Carney’s American Express credit account jointly controlled with his wife.
Analysis of 2nd Milk credit accounts shows they are for personal expenditures, including personal travel and domestic expenses including utility payments, and not legitimate 2nd Milk activity.
Evidence shows that between 2017 and 2022, at least $100,000 was further funneled to pay for the Carneys' home and to a loan provider, Ally Bank, for a 2020 Toyota Tundra.
On March 22, 2023, the Carneys' Arvest Bank account received $4,000 from 2nd Milk's Arvest account. That same day, the Carneys paid $890 towards a 2015 Jeep Wrangler, $840 towards a 2022 Toyota 4Rammer, $614 towards the note for a personal watercraft and trailer, and $ 1,000 towards a home equity line of credit, evidence reviewed by PIJ reveals.
Between February 2018 and April 2018, 2nd Milk wired $3,513.00 to Omulu Safaris, a family-owned private game lodge in South Africa.
PIJ data analysis of the expenses and cash withdrawals, which seem to ramp up dramatically in 2021 and 2023, suggests that Carneys was intentionally emptying the 2nd Milk accounts.
Our analysis of transactions suggests close to $1m from 2016-2023 is suspicious, a figure representing one-third of the estimated $3-3.5m grant income for 2nd Milk received during the period.
Further analysis based on the accounting period in the US police report and the Malawian annual report from January and December for 2020 and 2021, shows that although the US accounts for 2nd Milk show an increase in grant receipts and spending, the Malawian accounts don’t change much.
This suggests that the ratio of revenue distributed in Malawi fell from 26.43% to 11.48% as a percentage of expenses claimed as “Formula and Supplies” in the US.
One donor told investigators Jason Carney asked him to deposit a donation for 2nd Milk into Carney’s account. The donor refused.
That extravagant lifestyle, we now know, including vacations such as one involving a chartered helicopter flying over the Grand Canyon, was funded directly, the PIJ can show, by money raised to support children in Malawi.
It claims to have built Malawi chicken coops and pig farms for protein consumption for the malnourished child population and to hire nutritionists and teachers who continually provide ‘proper education’ to five-year-old kids including sending some to private schools while providing 3 million bottles of formula to orphaned infants – feeding about 1000 each day at their sites in Lilongwe and Ntcheu.
A 2nd Milk Centre in Nsundwe, Lilongwe (Pic by Godfrey Maocha)
PIJ did not visit the Ntcheu district operations for 2nd Milk but the small tobacco-growing town of Nsundwe on the outskirts of the Capital city, Lilongwe. Here, 2nd Milk procured land from the local community to construct an office structure but nothing came out of the initiative, according to former employees and local residents.
Instead of constructing a school as claimed on its website, the organization erected a blackboard on the wall of a small worn-out house of one of the caregivers involved in its milk distribution.
There is no single chicken coop that 2nd Milk claimed to have built. No children in the area go to any private schools under the organisation’s support as it claimed –just one teacher who is hired and paid a measly K10,000 (($5.7) a month to tutor some children, according to Jolosi Tcholani, a local village coordinator on whose house wall 2nd Milk erected its chalkboard and used as the centre for education.
"We gave them land in 2022 so that they could build some infrastructure since we had been using this old church, belonging to the Church of Christ. Nothing to date has materialised, and there's no sign of progress," said Tcholani in an interview.
He said at the centre they were feeding less than 100 babies a month, a far cry from 1000 a day often repeated by the organisation including in this interview.
An insider witness told investigators just over 70 children were fed daily with operation in Malawi supported by just around $6,000 project budget annually, according to evidence filed in US court.
“I've visited the feeding centers twice. And they only had 66 kids on both trips,” another former senior employee told PIJ.
The annual financial report to the NGO Authority in Malawi shows that 2nd Milk itself reported it supported 67 children at its centres in Nsundwe and Ntcheu. Some 30 children graduated 30 babies in the reporting year and the only major purchase was a Ford Ranger.
Another former employee estimated that only 30 children were given one bottle daily and said staff were barely paid.
No Longer At Ease
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he Carneys, who once could be hosted by cabinet ministers in Malawi are now under pressure. Not only have the 2nd Milk website,
but the Carneys have also deleted social media links to the organisation, too.
The Carneys are under criminal investigation both in Malawi and the United States, authorities confirmed to PIJ.
The NGO Authority in Malawi told PIJ it was cooperating with the Fiscal Police Department in Malawi and the US government in a fraud investigation.
The findings of the investigations are likely to lead to sanctions including a fine and deregistration from the Authority while police could launch criminal proceedings.
“Please note that NGORA is aware of the alleged fraud by directors of the institution and we have been working hand in hand with the American embassy as well as the Fiscal Police (Department) in the investigation. NGORA will not open a different case since we are already working with other relevant authorities as such we will depend on the outcome of the current investigation,” the Authority told PIJ in a statement.
According to the authority, it was now working with the Financial Intelligence Authority (FIA) to collect data from the NGOs and develop a report to aid the establishment of a risk-based approach to minimizing such abuses.
Through a spokesperson, the US State Department confirmed in a written response to a PIJ questionnaire that it was carrying out a criminal investigation into fraud by the NGO about 2nd Milk and also his unethical child adoption activities.
“Because there is an ongoing investigation, we cannot discuss matters relating to the case,” said the statement.
But the statement department detailed its actions to date on the unethical child adoptions investigations including canceling the accreditation of Children of All Nations, an agency linked to Carney first exposed by PIJ.
“The Bureau of Consular Affairs within the U.S. Department of State is responsible for overseeing U.S. implementation of the Hague Adoption Convention, which provides safeguards for children and families involved in the intercountry adoption process. To provide services in intercountry adoption cases, agencies must be accredited and must maintain substantial compliance with federal regulations that govern intercountry adoption to and from the United States. We note the Department’s public notice on recent actions taken by the Intercountry Adoption Accreditation and Maintenance Entity (IAAME) to cancel the accreditation of Children of All Nations,” added the response.
One of the websites for fundraising where 2nd Milk used to solicit donations, NWA Gives says the organisation is no longer receiving donations. A local manager, speaking off the record as he is not authorised to speak on the matter, said funds have dried up due to the investigation and blamed PIJ for the initial reporting he claimed had led to the donor fright and investigation.
Behind the PIJ reporting, he claimed were disgruntled employees and some misguided American donors drizzling misinformation.
“Now everywhere we are going, people are saying they cannot work with us. We cannot go to the Social Welfare office anymore because they are saying we were involved in illegal adoptions, people who were conducting adoptions with us stopped, saying the US government is investigating us, we have had to go to the US embassy to answer questions, the NGO board too, all this because of that article that was full of lies. Jason is a good man, every man might have his faults but he is being destroyed by people with personal vendettas, who had an ax to grind over money. We know those who are behind this, there is a team in the US and former employees here in Malawi who are behind this. A day will come when the truth will come out,” said the official.
But, perhaps, the truth is that Carney’s behavior now scares donors. Back in Arkansas, United States, Kayla Turner potentially could have been a donor. She was already committed to paying money to get help from Channel of All Nations, the adoption agency cum NGO –also linked to the Carneys –to help her adopt a child in Malawi, when allegations of fraud surfaced. She remembers precisely when she first heard the allegations of fraud; the day law enforcement had accosted Jason Carney at the Atlanta International Airport.
“I was in a support group with other families seeking to adopt children,” she told PIJ by telephone.“Everybody was shocked.”
Turner suspended her involvement with the Carneys and was moved to alert others, via Facebook: “We have decided to put our adoption on pause while we assess what we're going to do (switching agencies, countries, etc.). If you'd like to know more or get the information we have to prevent yourself or a friend from becoming a victim of an organization like this, please let us know,” she wrote.
This article was produced by the Platform for Investigative Journalism (PIJ), an independent non-profit news organisation based in Malawi with editorial support by IJ-Hub and OpenUp/Africa Data Hub. Reporting by Golden Matonga and Godfrey Maocha. Editing by Troye Lund. Data Analysis and visualisations by Adam Oxford.
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