COMPTROLLER INVESTIGATION INTO PIKEVILLE NONPROFIT FINDS FAKE INVOICES AND MORE
An investigation by the Tennessee Comptroller’s Office into Skills Training and Rehabilitation Services Incorporated (STARS, Inc.), a Pikeville, Tennessee-based nonprofit providing residential and vocational services to individuals with intellectual and developmental disabilities, uncovered significant questionable financial practices led by its executive director.
The probe found that the executive director submitted fabricated invoices purporting to be reimbursements for renovation work supposedly done in 2014 by her former spouse’s business on the organization’s main offices. These invoices, created years later and lacking any supporting documentation, led to at least $14,500 in improper payments to herself. The timing of these payments aligned with a court-ordered settlement requiring her to pay her ex-spouse $10,000.Additionally, STARS incurred at least $33,206.85 in expenses for cellular devices and services without documented board approval. This included phones and services for the executive director, her family members, a retired employee, and even smartwatches for various individuals; board members reported being unaware of family issues.
Between 2018 and 2025, the executive director also authorized at least $312,225 in bonuses to herself and other employees, again without documented board approval, discussion, or votes recorded in minutes.
The organization further failed to file required IRS Form 990 returns for seven consecutive years, leading to a temporary revocation of its tax-exempt status and an $11,000 IRS penalty for late filings.The Comptroller’s Office has shared the investigation results with the Office of the District Attorney General for the 12th Judicial District.
Comptroller Jason Mumpower emphasized the critical need for nonprofit boards to actively oversee finances, hold regular meetings, keep proper records, and ensure independent audits to prevent such risks of misconduct. The full investigative report is available at tncot.cc/doireports.
