Two trustees and a chief executive have been disqualified after a homelessness charity spent thousands of pounds on iPhones, Apple watches, silk sheets and bugging equipment.
A Charity Commission inquiry into the Ashley Foundation found that it used the tracking system to conduct surveillance on a rival company.
Meanwhile, its former boss said the watches were bought as gifts for people including local authority officers who “might be of help to us in the future”.
The regulator has referred its concerns about the Blackpool-based foundation to the police.
The statutory inquiry, which opened in March 2020, also found that Ashley Dribben, a trustee and the son of Lee Dribben, the charity’s chief executive, personally received £40,000 through a transaction related to the sale of the foundation’s property.
This was one of several deals which saw trustees selling the foundation’s properties before agreeing contracts with a third party to manage those properties.
These agreements were “onerous and expose the charity to potential significant liabilities”, the report said.
Charity funds were also used to pay for repairs worth more than £15,000 at several properties owned by both men, the inquiry found.
Lee and Ashley Dribben have both been banned from acting as trustees or managers at any charity for 15 years. David Kim, another trustee, has been banned for a decade.
Lisa Edwards, who joined the board in 2019 and remains a trustee, successfully applied to the high court in 2020 for an interim injunction blocking Lee and Ashley Dribben, Kim and a fourth trustee from making further decisions about the charity’s future.
The commission said: “The charity’s current trustees have taken action to rectify governance problems, including in successfully re-acquiring the sold properties and terminating the agreements.
“The commission is now satisfied the appropriate controls are in place to safeguard the charity’s assets moving forward.”
Asked about £2,400 from charity funds spent on watches, smart phones and tracking devices, Lee Dribben told the commission: “Actual gifts as such, such things like the pink Apple Watch, were specifically for people we thought would be of help to us in the future.”
The regulator noted: “This is not an acceptable or appropriate use of charity funds and raises concerns of questionable practices as to how the charity operated and whether it was compliant with the Bribery Act 2010.”
The commission said that some expenses charged to the charity by Lee Dribben, including breakfast at the exclusive Wolseley restaurant in Piccadilly and a £3,000 three-night trip to London for four people, were “considered excessive”.
Amy Spiller, head of investigations at the commission, said: “Our investigation found that the former trustees and chief executive misused this charity and received significant unauthorised personal benefit from funds intended to help vulnerable homeless people.
“I commend the current board of trustees for identifying the serious wrongdoing and initiating action to put the charity’s house in order.
“I hope that their work, and our intervention, means the charity is now able to deliver on its charitable purposes to help the homeless across Blackpool, Sunderland and Blackburn.”
The most recent accounts for the charity show it had an income of £3.7m and spent £3.8m in the year ending in May 2022.
Edwards, chair of trustees of the Ashley Foundation, said: “We thank The Charity Commission for its thorough investigation and welcome its report.
“The findings of the investigation are deeply distressing, but are, sadly, as we suspected. This is why we took our concerns to both the Charity Commission and Lancashire Police three years ago.
“We would like to make it clear that the trustees and former CEO referred to in the Commission’s inquiry report are no longer, in any way, connected to the Ashley Foundation.”
Edwards added: “This has been a difficult period for the Ashley Foundation and I would like to thank our residents, dedicated staff, trustees and local authority partners for their help and support during this time.
“We look forward to continuing to provide vital services for homeless people across the north of England.”