By Alex Batison & Maria Bosco

Jason Carney, the founder of the Malawi-registered non-profit organization and co-founder and president of 2nd Milk, who was arrested in January this year by U.S. authorities, is now facing 20 federal charges, including wire fraud, conspiracy to commit wire fraud, structuring transactions to evade reporting requirements and making false statements in tax returns.

Carney appeared in federal court on May 28 after a superseding indictment was filed on May 21. The new indictment adds five new charges of false statements on tax returns.

According to federal authorities, Jason Carney and his wife, Lacey, misappropriated donated funds meant to help orphaned children in Africa to illegally enrich themselves, using them for personal travel, routine living expenses, and other personal expenditures.

The federal government accuses Carney of falsifying personal tax returns each year from 2018-2020, and filing false returns for 2nd Milk in 2021 and 2022. He was arrested in January this year.

In addition, the indictment claims Carney filed false tax returns for 2nd Milk in 2021 and 2022, allegedly misrepresenting the amount paid out in salaries, benefits, and other forms of compensation. 

Prosecutors say these filings were intentionally manipulated to underreport financial compensation, both personally and through the nonprofit.

These latest allegations intensify the scrutiny surrounding Carney and 2nd Milk, which has already been the subject of controversy over its operations.

As previously reported by Platform for Investigative Journalism (PIJ), Carney has been under criminal investigation for over a year. A PIJ investigation, based on documents obtained by police in the US and from Malawi’s NGO Authority (NGORA) through an Access to Information (ATI) request, interviews with former employees, and open sources, shows the couple, through the organisation, raised a total of $2,371,314 (some MK4.1 billion) between 2016 and 2023 donations.

In April last year, the role of the organisation and Carney in unethical adoptions became a huge business. At the core of exposed unethical behavior included aggressive marketing tactics that included over-exposing the suffering of babies, language that bordered on sales pitches, and coercion of parents to give away their infants and babies, among others.

The PIJ investigation revealed that Carney was at the centre of illegal child adoptions in Malawi. Each adoption reported by PIJ then comes with a price tag of around USD 20,700 (MK21.2m), and the investigation estimated adoptions worth $5.7 billion (MK5.8 trillion) were facilitated between 2006 and 2022. Many were likely to have taken place and were not reviewed by the PIJ.

A second major PIJ investigation exposed how Carney abused funds raised to finance 2nd Milk, an NGO that claimed to support thousands of Malawian orphanages. 

The new charges of false statements in tax returns each carry a maximum 3-year sentence and up to a $100,000 fine. If convicted of conspiracy to commit wire fraud or wire fraud, Carney could face up to 20 years in prison and a $250,000 fine. The other three counts carry a maximum sentence of five years in prison and the same fine. Carney could be faced with paying restitution if convicted on the final three charges, as well.

The trial is scheduled to begin on September 2, 2025.

Misuse of donated funds

In Count One of the indictment—conspiracy to commit wire fraud—the government outlines 13 donations made to the nonprofit 2nd Milk, originating from two companies, one individual, and one foundation.

According to the indictment, Carney began soliciting donations from an unnamed foundation as early as October 2019. Throughout four separate requests, he sought approximately $2.6 million. The foundation ultimately donated $80,000, believing the funds would support job creation in Africa, chicken house development, baby formula distribution, and water well construction.

However, the federal government alleges that not all of the donated money was used as promised. Instead, the indictment claims Carney transferred a significant portion of the funds from 2nd Milk accounts into his accounts.

In one paragraph of the indictment, the government cites an email from Carney to a bank employee that reads, “Can one of you transfer $2150 from my 2nd Milk savings… to my personal account today? And tomorrow, send $5,000 to my account from the same account once the money clears.”

The indictment goes on to accuse Carney of giving a $20,000 donation check from the foundation to an attorney, who then deposited that check into the attorney’s account. The indictment then alleges Carney deposited a $5,000 check from that attorney into his account two days later.

“I just have to keep some money back for us, 2nd Milk, and you… I mean, I could give you the $20,000 check today,” Carney allegedly said in a text to the attorney in question. “We just need to wire some to Malawi, and some need to go to us to pay bills as soon as possible, so we don’t get behind.”

The indictment goes on to outline allegations that donations from two companies were not used for the purposes stated and that Carney intentionally used misleading language about the number of orphaned children 2nd Milk was helping. The indictment also includes allegations that Carney drew on 2nd Milk accounts to help cover major purchases for family members.

Misleading messages to donors

The federal government also alleges that Carney misused donations and was dishonest about his roles and salary at 2nd Milk.

The indictment says that in a 2018 Facebook video, Carney says, “…we don’t take a salary from 2nd Milk. So, as you guys are sponsoring babies, that money goes specifically for the babies.”

The government goes on to state in the document that Carney texted a potential donor in 2022, “But my zero income was zero from 2nd Milk.”

This article was produced by the Platform for Investigative Journalism (PIJ), an independent centre for investigative journalism. PIJ is committed to professional and ethical journalism.

MORE READING: JASON CARNEY: 2ND MILK BOSS ARRESTED IN UNITED STATES

EXPORTING MALAWIAN BABIES

SOUR MILK: HOW AN AMERICAN CHRISTIAN NGO EXPLOITED MALAWIAN’S CHILDREN TO FUND FOUNDERS’ LAVISH LIFESTYLES

AUTHORS:

Alex Batison is a former student of Malawi Institute of Journalism (MIJ) and a freelance journalist based in Lilongwe, Malawi. Email: [email protected]

ABOUT THE AUTHOR:

Maria Bosco is a journalist at Platform for Investigative Journalism (PIJ) and a former student of the Malawi Institute of Journalism (MIJ) based in Lilongwe. Email: [email protected]