Parents in the popular grade school athletic conference knew something was fiscally amiss this season when the referees abruptly stopped getting paid.
 
    After a long-overdue check of bank records, they discovered in recent weeks that the Southwest Catholic Conference treasury had been fleeced of more than $50,000 in team fees -- allegedly siphoned off by Joseph Sebek, a former officer, since 1990.
 
    "Because it was a religious organization, everyone was very trusting," said Tom McGreal, a Chicago parent and certified public accountant who is helping the 30-year-old club reorganize its 20-parish membership under stricter rules. "We were embarrassed to find out that no financial statements were being prepared, and no accountant was reviewing the records."
 
    From Little Leagues and Boy Scout troops to committees raising money for class trips and band uniforms, apparently no club treasury is too small to be the target of an interest-free "loan" or other type of in-house scams.
 
    The alleged thefts are increasing as an estimated 41,000 religious and charitable groups are formed a year nationwide, according to Internal Revenue Service statistics. In Illinois, which sees about 3,000 groups form a year, 480 allegations of fraud are investigated a year by the attorney general's office, which registers the state's 20,000 incorporated charities and charitable trusts.
 
    Floyd Perkins, charitable trust division chief, said that the majority of community groups are run honestly. But in his 20 years' experience, he has never seen so many alleged rip-offs -- or so many mortified parents whose $2 to $200 donations were allegedly so easily pilfered when no one was looking.
 
    "It's more common than people realize," said Ellen Dick, president of the Illinois Association of Non-Profit Organizations. "A lot of the thefts aren't even reported because people don't want the bad publicity to affect future fundraising."
 
    According to state statistics compiled at the request of the Tribune, the number of charitable fraud cases prosecuted by the attorney general's office has increased by 64 percent over the past decade, from 81 in 1988 to 133 last year.
 
    The department does not break down the number of investigations and prosecutions by type of charity. But Perkins said community groups seem particularly vulnerable, and for these three reasons:
 
    More groups are being formed by people with little or no experience directing non-profit activities; fewer members have time to look over the books; and clubs that rely on the same board members year after year can be lulled into a false sense of security.
 
    "In the old days, these groups were more established, and everyone in the group knew each other," said Perkins. "Today, people belong to a whole lot of organizations but they rely on the same core group of people to run them."

    He added, "The members think 'Bill's been treasurer for 12 years. Thank goodness, he'll do it again.' Little do they know that Bill lost his job and needed some money to tide him over. ... The members are shocked to find out that there are poor accounting records.
 
    Some of the newly-formed religious and charitable groups fill gaps left by dwindling federal programs; others accommodate parents' insatiable demand for student activities well into their children's teen years; and still others simply rally around a good cause.
 
    Members' concern is usually focused on the cause, not how every penny is spent or the wording of the group's bylaws, Perkins said.
 
    Community-based groups must be vigilant, according to the Society for Non-profit Organizations, a Madison, Wis.-based organization.
 
    "Some of the most ethical people in the world have become seduced by the access to money," said Katie Burnham, society president. "It might start at the post office, when someone goes to buy stamps for the group and ends up buying $5 worth of stamps for himself. Little by little, it all adds up."
 
    Paul Bervid, an assistant Cook County state's attorney who handles white-collar crimes, said he has prosecuted on behalf of visiting nurses associations, parade committees, boys basketball groups and bingo halls, to name a few.
 
    Sometimes an officer of a group will take money as a revenge against members who don't agree with the way he is running the organization.
 
    Club treasury theft is a felony if the amount stolen reaches $300, and the penalty can be anywhere from probation to 15 years in prison, depending on the amount taken and the offender's record, Bervid said.
 
    The attorney general's office also may file charges or civil lawsuits seeking damages against former officers, Perkins said.
 
    But he noted that only about a third of the investigations end up as full-fledged cases, and even those are difficult to prove because records may have been destroyed. Such matters are often resolved out of court, with the state asking the officer under suspicion to repay the money or requesting a change in the group's board of directors.
 
    In the case of Southwest Catholic Conference, parents decided to form immediately another group so the conference's 1,200 student members could continue to play volleyball and basketball.
 
    The new organization, South-side Catholic Conference, is starting out $28,000 in the red, according to Hank Lenzen, a parent who is helping coordinate fundraisers to cover the loss.
 
    "We're going to come back stronger than ever," Lenzen said, noting that the new board will meet regularly and review regular audits of financial records.