New details unsealed in 2nd Milk co-founder’s federal trial

15 January 2025

FAYETTEVILLE, Ark. (KNWA/KFTA) — The unsealed indictment in the Jason Carney case outlines the United States government’s case against the 2nd Milk co-founder in his federal wire fraud trial.

The 29-page document outlines how the prosecutors say Carney misappropriated donations intended to help orphaned children from impoverished villages in Africa.

The federal government alleges Carney and his family used portions of those donations to fund personal travel, boat loans, and routine living expenses.

Misuse of donated funds

In count one of the indictment, conspiracy to commit wire fraud, the government highlights 13 donations made to 2nd Milk from two companies, one individual, and one foundation.

According to the indictment, Carney began soliciting an unnamed foundation for donations as far back as October of 2019. Through four instances described in the indictment, Carney requested requested around $2.6 million. From those requests, the foundation agreed to donate $80,000 and were, in turn, told that money was going toward job creation in Africa, chicken house development, baby formula, and construction of water wells.

Co-founder of Springdale-based nonprofit facing federal wire fraud charges

But the federal government contends that not all of the money went where it was promised. The indictment lays out allegations that Carney transferred much of that money into his own, personal accounts after it was deposited into 2nd Milk 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 today? And tomorrow send $5,000 to my personal 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 personal account. The indictment then alleges Carney deposited a $5,000 check from that attorney into his own 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. “Just need to wire some to Malawi and some needs to go to us to pay bills asap 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 messaging to donors

The Instagram post above (from November 21, 2019) was among several social media entries cited in the indictment. The federal government says posts like this were intentionally misleading to donors about where and how their donations would be spent.

The Instagram post above (from November 21, 2019) was among several social media entries cited in the indictment. The federal government says posts like this were intentionally misleading to donors about where and how their donations would be spent.

More

In addition to allegations that Carney misappropriated donations, the federal government says he was deceitful about his roles and salary with 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 Cool Down

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.”

Springdale nonprofit 2nd Milk investigated for defrauding donors

However, according to the indictment, on a 2021 loan application for a fishing boat and trailer, Carney’s wife, Lacey Carney, listed both of their employers as “2nd Milk” with a monthly salary of $17,458.33, each. No other employer was listed on the application, according to the indictment.

The federal government points out three other loan applications filled out in 2021 and 2022 that each list 2nd Milk as the Carneys’ employer. On each application, they listed their salary as more than $200,000 per year.

Carney’s trial will begin on March 3 at the Federal Courthouse in Fayetteville. There is a pre-trial hearing on Feb. 27. You can read the full indictment from the U.S. Government below.