Michigan authorities say the "American Cancer Society of Michigan" is a fake charity. But it wasn't even a good fake.

Firstly, it was not in Michigan. The fake charity group applied to the IRS to become a tax-exempt nonprofit in 2020.

It presented its address as a rented mailbox on Staten Island in New York City.  

As it turned out, it was not the real American Cancer Society either: The real organization had already alerted the IRS that the leader of the sound-alike group, Ian Hosang, was running a scam.

In spite of this, the IRS approved the group.

Following that, it approved another operation run by Hosang: "the United Way of Ohio," also with an address on Staten Island. 

63-year-old Hosang is accused of running a long-running charity fraud that has astounded nonprofit regulators and watchdogs.

It has raised questions about the IRS's ability to serve as a gatekeeper for American charities. 

It was not because the alleged scheme was so good. It was terrible. However, it worked.

Hosang - a convicted stock market fraudster - had 76 nonprofits approved by the IRS despite obvious red flags of potential fraud. 

Hosang stole the names of better-known charities. 

But the IRS kept saying yes. As a result, the agency has drawn scrutiny for its new fast-track system for approving charities.

In 2001 to 2019, Nina Olson was the IRS' in-house national taxpayer advocate. She repeatedly announced that vetting levels had decreased. 

A government agency declined to respond to questions regarding the case of Hosang, citing taxpayer privacy laws. 

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