The Rozelle headquarters of the Just Enough Faith Foundation has been raided by gambling officials in a attempt to seize papers from its founder, Jeff Gambin, and a related company affiliated with the Packer family.
The raid occurred days after Mr Gambin admitted he fed poker machines with money donated to feed the homeless.
NSW authorities have determined that the foundation breached laws governing charitable fund-raising three times in the past 11 years but, after barring the foundation's registration to raise funds, did little to alert members of the public that they should not donate to it.
The foundation's website was still calling for donations yesterday, saying it was a registered charity and urging those wanting to give cash to contact Mr Gambin or his wife by phone.
The Office of Liquor, Gaming and Racing, which registers charities in NSW, is investigating the finances of both the incorporated foundation established by Mr Gambin 15 years ago and a company of the same name set up by people associated with Packer media interests, a spokesman for the liquor office said.
The board of the company, which was deregistered in December, included John Alexander, the chairman of James Packer's company Consolidated Media Holdings; Mr Packer's sister, Gretel; and the founder of Wizard Home Loans, Mark Bouris.
Mr Gambin was not at the headquarters when officers raided it on Thursday morning but the foundation's lawyers, appointed the night before, undertook to provide financial documents within two weeks, said the spokesman, Mark Nolan.
The foundation was banned from raising funds in NSW in 2002, after it was found in breach of the Charitable Fundraising Act three times. But it is exempt from paying tax and is staffed by offenders placed by the Department of Corrective Services. Donations to it are tax-deductible.
A restaurateur and philanthropist whose food vans have fed the homeless since 1993, Mr Gambin has won the support of prominent people other than members of the Packer circle.
The broadcaster Alan Jones said he was concerned by what he had read about the charity but Mr Gambin had done "a phenomenal amount of good for destitute people" in Sydney. "And what's to happen to those people if this charity is torpedoed, I don't know," he said.
According to bank statements seen by the Herald, Mr Gambin has withdrawn almost $150,000 from the foundation's bank account at Balmain Leagues Club. Other withdrawals had been made to pay for liquor and rates on the Gold Coast unit Mr Gambin owns with his wife, Alina.
On Monday, Mr Gambin told the Channel Nine program A Current Affair he had put foundation money into poker machines. By yesterday he had secured the services of Professional Public Relations but declined to answer questions from the Herald.
At the foundation's Rozelle kitchens, 23 staff who have been sentenced to community service are supplied by the Department of Corrective Services.
"Since these allegations [of financial mismanagement], we're reviewing the offenders working there," a spokeswoman for the department said. "But at the moment it seems they are doing charitable work."
Asked about the discrepancy between the charity's deregistration in NSW and its federal tax status, a Tax Office spokeswoman said the laws were separate.
The Herald has also found that in 1997 the charity regulator asked police to investigate a fund-raising dance held without authority and with no record of money going to the foundation. There was not enough evidence for police to act.
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