Supreme Felons, Inc. Loses Non-Profit Status, Group no Longer Eligible to Receive Money From County $1.2M Grant

Due to the revocation of its non-profit status, Supreme Felons, Inc. is in direct violation of its contract with Washtenaw County. By violating terms of its Jan. 2023 contract, the non-profit became ineligible to receive any portion of the $1.2 million in ARPA funds awarded in July 2022 and dispersed after May 15, 2023.

by P.D. Lesko

On May 15, 2023, the IRS revoked the non-profit status of Supreme Felons, Inc. This revocation of charitable status means that Supreme Felons, Inc. no longer exists as a non-profit. The revocation of the group’s charitable status means County funding under the auspices of the federal ARPA Fund grant to Supreme Felons, Inc. must stop. The Ann Arbor Independent published an article in Jan. 2023 that revealed the non-profit had never filed its required federal income taxes. That same month, Washtenaw County began dispersing money to the group under the auspices of a $1.2 million ARPA fund grant.

Granted non-profit status in May 2020, IRS records show the entity has not filed any 990 income tax returns.

It’s not clear why then the group failed to file its federal income taxes for three years. Likewise, it’s not clear why Washtenaw County Commissioners and County Administrator Greg Dill gave federal grant money to a non-profit that was openly in violation of federal and state tax laws.

In July 2022, the Washtenaw County Board of Commissioners handed $1.2 million in federal ARPA funding to a non-profit organization ostensibly controlled by a registered sex offender and a murderer on parole. In reality, documents shared with The Ann Arbor Independent revealed that the non-profit Supreme Felons, Inc. was the brainchild of the County Sheriff, Derrick Jackson (the Sheriff’s Dir. of Community Engagement) and Marvin Gundy, the Sheriff’s Community Outreach Coordinator. Public records show that Gundy is presently under investigation by the Michigan AG for witness tampering. Jackson is one of three candidates running for County Sheriff.

It’s not Jackson or Gundy who will face any legal consequences of tax evasion or failure to file income taxes on behalf of the non-profit they control behind the scenes. Billy Cole, the felon who serves as the executive director of the non-profit, is on the legal hook.

The contract between Washtenaw County and Supreme Felons, Inc. states that “The Subrecipient agrees to maintain the proper organizational status (such as 501(c)(3) to be eligible to receive federal financial assistance under this grant.”

The contract also states that, “Subrecipient agrees to keep itself in the same legal position/mode of organization as when it entered into this agreement.”

According to officials from the IRS, since May 15, 2023, Supreme Felons, Inc. has been responsible for paying all federal, state and local income and sales taxes on all income, including donations and funding from Washtenaw County.

Without non-profit status, Supreme Felons, Inc. is no longer legally able to solicit donations as a charity.

Reinstatement of non-profit status includes explaining to the IRS why the non-profit skipped filing 990 income tax forms for three or more years. The reinstatement process typically takes 15 months. The contract between Washtenaw County and Supreme Felons, Inc. began on Jan. 1, 2023 and ends Dec. 31, 2024.

The contract requires the contractor to comply with all applicable federal, state and local regulations. Failure to file income tax disclosures is a violation of federal and state law.

Failing to file a tax return can be classified as a federal crime punishable as a misdemeanor or a felony. Willful failure to file a tax return is a misdemeanor pursuant to IRC 7203. In cases where an overt act of evasion occurred, willful failure to file may be elevated to a felony under IRC 7201. If a taxpayer is charged with a criminal tax violation, the punishment can be severe and may include fines and jail time.

The newspaper contacted County Administrator Greg Dill and several County Commissioners by email to ask whether the County intends to end its funding of Supreme Felons, Inc. under the ARPA fund grant due to breach of contract. The county officials were also asked if they intended to claw back funds that had been dispersed after May 15, 2023, when the group’s non-profit status was automatically revoked by the IRS.

Greg Dill has not yet responded.

U.S. Treasury officials who control ARPA funding and investigate ARPA funding fraud, said the County will be required to claw back grant dollars given to Supreme Felons, Inc. after May 15, 2023. Officials also said the unused portion of the $1.2 million in federal ARPA funds granted to Supreme Felons, Inc. could be awarded to other non-profits.

The contract between Washtenaw County and Supreme Felons, Inc. requires Washtenaw County to conduct monitoring of the group’s financial statements, performance data and other “materials to ensure compliance with federal award guidance.” Section VII of the contract between the County and Supreme Felons, Inc. states that, “The County may suspend funding…in whole or in part for any of the following reasons: “Failure to comply with the requirements or statutory objectives of federal or state law.”

Beginning in 2020, public records revealed that Washtenaw County began paying Supreme Felons, Inc. for work in the community. For example, County records show that the County Health Dept. paid Supreme Felons, Inc. to have its President Alan K. Fuqua do COVID-19 community outreach activities. Fuqua, a registered sex offender who spent 17 years in prison for multiple counts of CSC 2nd degree with a child under the age of 13, was sent out as a “trusted member of his community” to talk up COVID vaccines. Records show that between May of 2021 and Nov. of 2022, Washtenaw County paid Supreme Felons, Inc. thousands of dollars.

Corey A. Herdon-Bey, a resident of Ypsilanti, is listed on the Supreme Felons, Inc. State of Michigan filings as the group’s Treasurer. Billy Cole, who lives in Canton (Wayne County), is listed as the group’s president.

The newspaper contacted Supreme Felons, Inc. through its webpage to ask why the group had neglected to file federal 990 income tax returns since its creation as a non-profit in 2020. No one has yet replied.