A couple claimed every dollar would save starving babies in Malawi; the charity founders diverted more than $2 million for cosmetic surgery, cruises and luxury holidays

Donors who supported an Arkansas charity were told their contributions would help feed and protect vulnerable babies in Malawi, one of the world's poorest countries. The organisation, called 2nd Milk, presented itself as a ministry where sponsorship money went towards children rather than the personal expenses of its founders. But an investigation into its finances uncovered a different use for the donations. According to the US Department of Justice, more than $2 million was diverted to cover expenses ranging from cosmetic surgery and massages to international holidays, cruises and household bills. The charity's founders, Jason Boyd Carney and his wife, Lacey Christina Carney, have now been sentenced to prison after their involvement in the scheme was established in federal court.Arkansas charity founders receive maximum prison sentences for $2 million fraudThe couple, who founded 2nd Milk in Springdale, Arkansas, were sentenced on October 14, 2026, in the Western District of Arkansas. Jason Carney received 192 months in federal prison, equivalent to 16 years, for offences connected to conspiracy, wire fraud and tax fraud. He will also serve three years of supervised release after completing his prison term.His wife, Lacey Carney, received a 36-month prison sentence for failing to report her husband's fraudulent activities despite knowing about the scheme. Her sentence also includes one year of supervised release. Federal prosecutors said both punishments represented the maximum prison terms permitted under the counts for which they were convicted.Reportedly, Chief US District Judge Timothy L. Brooks presided over the sentencing. In describing Jason Carney's actions, the judge used the words "profoundly disgusting", calling the conduct "egregious, repulsive, and violative". The sentences followed an investigation involving Internal Revenue Service Criminal Investigation and the Diplomatic Security Service.How 2nd Milk founders convinced donors their money was helping starving babiesFor several years, Jason Carney presented 2nd Milk as an organisation with a clear financial commitment to the children it supported. Its fundraising messages placed particular emphasis on transparency, with donors encouraged to believe that sponsorship contributions were being used for their intended purpose.The promises were unusually direct. Carney told potential supporters that all sponsorship money went towards saving vulnerable babies in developing countries. In another assurance, he said that 82 cents of every dollar went to babies, while the remainder covered overhead expenses in Africa. He also maintained that neither he nor his wife took money from people sponsoring children.Carney repeatedly insisted that he had never received a salary from the organisation. One of his assurances stated that all the money went specifically towards the children. Prosecutors later presented these statements as part of the evidence showing how donors had been persuaded to continue supporting the charity.The organisation's stated purpose was to help orphaned and malnourished children in Malawi. Supporters were therefore contributing on the understanding that their money would provide assistance to a particularly vulnerable group, rather than finance the personal lives of those running the organisation.Charity money paid for cosmetic procedures, cruises and overseas holidaysThe financial investigation uncovered payments that prosecutors said had little connection to 2nd Milk's charitable work. Bank records showed that money belonging to the nonprofit had been used to meet a range of personal expenses for Jason and Lacey Carney.Among the purchases and payments identified were cosmetic surgery, massages, tanning services and expenses involving their pets. Charity funds also went towards a cruise, mortgage payments on the couple's home, and loans connected to their cars and boat. Investigators also traced money used for luxury travel.The couple visited several international destinations, including Rome, Chile, Peru, Japan, Barcelona, Cancun and Vietnam. These trips were among the personal expenses that prosecutors linked to the diversion of charitable contributions.The misuse of donations was accompanied by efforts to conceal the financial activity. Prosecutors established that Jason Carney submitted false tax returns for himself and 2nd Milk, including an inaccurate annual nonprofit return, to hide the diversion of funds.Jason Carney admitted fraud and tax offences during his trialThe criminal proceedings included a jury trial, although Jason Carney changed his position before the prosecution had completed presenting its case. On the sixth day of the trial, he entered guilty pleas to four counts.These included conspiracy to commit wire fraud, two counts of filing false tax returns and one count of structuring cash transactions to avoid reporting requirements. The tax offences covered his personal return and the charity's Form 990, which nonprofits use to report financial and organisational information to the Internal Revenue Service.The structuring charge concerned the handling of cash transactions in a way intended to evade the reporting requirements that apply to certain financial activity. Together, the offences formed part of the case against him over the use of charity money and the concealment of its movement.Lacey Carney, aged 47, pleaded guilty to one count of misprision of a felony. The offence relates to knowing that a federal crime has been committed and deliberately failing to report it to the appropriate authorities. Prosecutors said she knew about her husband's wire fraud scheme but did not disclose it as required by law. Jason Carney was 48 at the time of the proceedings. Both defendants were held responsible for their respective offences, although the charges and sentences against them were different.Couple agreed to give up their homeThe financial consequences of the case also extended to the couple's property. Jason and Lacey Carney agreed to forfeit their home after authorities established that proceeds from the wire fraud had been used towards mortgage payments.The forfeiture formed part of the financial penalties connected to the criminal proceedings. It also reflected the extent to which money diverted from 2nd Milk had been used to support the couple's personal assets and living expenses.The case was announced by the US Attorney's Office for the Western District of Arkansas as part of a wider federal enforcement effort targeting fraud and tax-related offences. The Justice Department's National Fraud Enforcement Division and IRS Criminal Investigation were among the agencies involved in the nationwide initiative.Federal officials respond to misuse of charitable donationsUS Attorney Kevin R. Holmes said the sentences demonstrated the consequences for people who use charitable organisations to obtain personal financial benefits. He said the Carneys had violated the confidence placed in them by donors whose contributions were intended to support vulnerable children.IRS Criminal Investigation Special Agent in Charge Donald "Trey" Eakins also addressed the case, pointing to the difference between what donors believed they were funding and how the money was actually spent. He said contributions intended to help malnourished and orphaned infants had instead been diverted towards personal expenses.Nicholas Collura, principal deputy assistant secretary for diplomatic security and director of the Diplomatic Security Service, said the case illustrated the damage caused when charitable causes are used for personal gain. The agency had worked with federal investigators to uncover the financial activity.You use AI every day. Now get your AI Quotient. Take the AIQ test.