Correction Notice: In a previous version of this article the headline included a claim that the “charity” lost its tax status over gambling research whereas specifically, the organization lost endorsements because it was found to neither be ‘charitable’ nor an ‘institution’ according to court documents and a summation found on the Queensland University of Technology website.
We also claimed that The Study and Prevention of Psychological Diseases Foundation (SPED) was established by James Salerno Senior. The official membership list upon incorporation does not include James Salerno Senior. The senior Salerno is described by Dr. Perry of SPED as “the brainchild and a founding member of the research,” which was the impetus of a previous organization known as the Ideal Human Environment Social Research Team (“IHESRT”). Neither the name of IHESRT nor IHE was changed to SPED as we and others reported, according to a statement received from Matteo Salerno.
We also reported that, “The income of SPED’s members, either employed or self-employed in other fields, would be donated to the organization to avoid being taxed and their daily expenses were covered by SPED.” Whether or not member income was donated to the organization with the result being no taxes, neither the Administrative Appeals Tribunal nor the Federal Court made a finding that SPED’s activities were designed in order to avoid being taxed.
An Australian organization claiming to be a charity has failed in its attempt to retain its tax-free status after it was discovered more than $1 million was spent by its members on gambling, holiday and luxury cars all while supposedly researching the ‘ideal human environment,’ according to the Daily Mail.
Both the Administrative Appeals Tribunal (AAT) and the Federal Court agreed that The Study and Prevention of Psychological Diseases Foundation (SPED) was neither a health promotion charity nor a ‘charitable institution.’
SPED claimed its members conducted research 24 hours a day, seven days a week, and that that was the organization’s principal activity. However, after it was revealed that the organization spent over a million dollars on a fleet of luxury vehicles including $695,000 for a Rolls Royce, $300,000 for a Ferrari, and $100,000 on a Hummer under the guise of investigating the relationship between human behavior and luxury vehicles, the AAT refused SPED’s appeal, according to court documents. Also revealed was the fact that the luxury vehicles were being used by members of the organization for personal use.
SPED’s other research included Project Gambling, where it claimed to be studying the ‘thought processes and addictive behaviour from engagement in games of chance,’ as well as Project India which had members traveling to India for the purpose of attending a wedding.
The ATT ruled that no evidence existed that any of SPED’s collected data had ever been published in any medical journals or other scientific journals. The organization also covered some of Salerno’s daily expenses and the expenditures were justified using his adviser to the organization status.
The names of SPED’S 21 members contained on a list revealed that the majority of the organization’s members shared the last name Salerno and were in fact ‘bound by blood ties, marriage or friendship.’