YFU/YFU USA – bankruptcy and resurrection in 2002

Subject:	Have YFU USA changed their stripes?
Date:	Thu, 31 Jul 2014 22:43:38 +0200
From:	Lise Almenningen <margarethesdatter@csfes.org>
To:	oighotline@state.gov, James T Alexander <AlexanderJT@state.gov>, Brandi Duffy <duffyb@state.gov>, Robin Lerner <lernerrj@state.gov>, Elizabeth Dickerson <DickersonEB@state.gov>, Susan Geary <GearySA@state.gov>, Hawkins S <hawkinsks@state.gov>
CC:	dgrijalva@csfes.org, Child-Safe International <childsafe@avonandsomerset.police.uk>, erik.duncan@siu.no, postmottak@kd.dep.no, nigel.fulton@education.gsi.gov.uk, Freda.briggs@unisa.edu.au, english@moe.edu.cn, information@bmbf.bund.de

Office of Inspector General:

Hotline

YFU-USA, Inc. (previously YFU, Inc.)
Bankruptcy YFU 2002
YFU USA rises from the ashes 2002

Have YFU USA changed their stripes?

According to the Office of Inspector General’s (OIG) own report number AUD/CG-02-12, December 2002 OIG’s Office of Audits conducted a review of nine grants awarded to Youth for Understanding, Inc. Due to the facts uncovered by OIG YFU filed for Chapter 11 bankruptcy on June 11, 2002 (shutting down operations on March 8, 2002).

On March 9, 2002 much of the same personnel (including Roberta Hopkins who helped set up the new company) working at the same offices begin a new firm called YFU-USA, Inc. They requested that the Bureau of Educational and Cultural Affairs (ECA) hand over all of the old grants to them so they might finish their responsibilities. At the same time YFU/YFU-USA ensures through their bankruptcy that they will not have to fulfill their financial obligations to ECA in spite of YFU owing to the US Govenment at the very least USD 315,793 (very likely more than USD 1,000,000). (Based on OIG’s report)

In addition, we see that YFU, Inc/YFU-USA, Inc. tried to get out of health insurance obligations through filing for their Chapter 11. (Risteen V. Youth For Understanding) The Court concluded that YFU USA was ”under the IRS COBRA regulations” a successor employer to YFU. The Court also issued a preliminary injunction ordering YFU-USA, Inc. to provide COBRA coverage to the employee.

According to Kal Goren’s presentation to the OCBA Employee Benefits Committee, YFU, Inc./YFU-USA’s is considered a fraudulent transfer case. They claim this is due to the so-called “buyer” taking over the seller’s assets except their real-estate. In addition the new entity refused to provide the terminated former “number two-position” officer with his remaining 16 months of COBRA health insurance coverage. (Successor Liability For Benefits in Assets Purchases, 2011).

Before the time of the bankruptcy of YFU, Inc., YFU had been the primary administrative organization for the Congress-Bundestag Youth Exchange (CBYX) for CBYX’s first decade and a half. YFU-USA had hoped it would be able to get back in the game once they had once more become eligible. (K12 Academics) In spite of YFU’s previous serious monetary transgressions, CBYX seems to have chosen to continue their work with this “well-renowned” corporation. (CBYX’s website)

Recently there was an Article in Journal-Standard dated Jun. 12, 2014 about young Madeleine Sutton who is travelling via a CBYX stipend to Germany. Please verify that she is indeed travelling with YFU/YFU-USA. Her father’s contact information is: xxxxxxxxx

I hope that the Office of Inspector General continue to keep an eye on YFU-USA, Inc. so the students and their parents can feel safe in their attempt to build a positive relationship between Germany and the US.

Sincerely
Lise Lotte M Almenningen
CSFES Norway

Cc: Child-Safe, UK

SIU, Norway: Eric Duncan

Department for Education, China
Department for Education, UK
Department for Education, Germany
Department for Education, Australia
Department for Education, Norway

CSFES, Danielle Grijalva
Dr. Freda Briggs

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CSFES Norway
http://trygghetforutvekslingseleven.wordpress.com/