Arkansas Non-Profit Founders Receive Maximum Prison Sentences for Defrauding Donors and the Government

FAYETTEVILLE - The United States Attorney's Office for the Western District of Arkansas announced the sentencings of Jason Boyd Carney and Lacey Christina Carney as part of a nationwide enforcement action led by the Justice Department's National Fraud Enforcement Division, Internal Revenue Service, and Internal Revenue Service Criminal Investigation targeting tax fraud and related offenses. The Western District of Arkansas was a key participant in this surge effort.

The Springdale founders of the non-profit 2nd Milk were sentenced on October 14, 2026, for defrauding donors to their charity, 2nd Milk. Jason Carney was sentenced to 192 months in prison on charges related to a conspiracy, wire fraud, and tax fraud, followed by three years of supervised release. His spouse, Lacey Carney was sentenced to 36 months on charges that she failed to report her spouse's fraud, followed by one year of supervised release. Both received the maximum sentences allowed pursuant to their counts of conviction. When imposing sentence, Chief United States District Judge Timothy L. Brooks described Jason Carney's conduct as "profoundly disgusting" and "egregious, repulsive, and violative."

According to court documents, Jason Carney, age 48, previously entered a plea of guilty on the sixth day of his jury trial during the prosecution's case in chief. He admitted guilt on four separate counts- one count of conspiracy to commit wire fraud, two counts of filing a false return, one for a personal return and another for 2nd Milk's non-profit 990 tax return, and one count of structuring cash transactions to evade reporting requirements.

The Court found that Jason Carney diverted over $2 million from his non-profit, 2nd Milk, which was created to benefit starving orphans in Malawi, an African country that is one of the poorest countries in the world. Prosecutors alleged in a sentencing memorandum that for over four years, Jason Carney represented 2nd Milk as a fully transparent ministry, using emphatic language to donors. "100% of the 2nd Milk sponsorships go directly to saving the lives of the most vulnerable babies living in developing countries;" "For every dollar 82 cents goes to babies today…the rest goes for overhead…in Africa;" "We want to be accountable to our sponsors and God;" and "it's important to know that the Carneys are not taking your money when you sponsor babies, all that money goes specifically for those babies." Jason Carney repeatedly assured donors that he does not, and never has, taken a salary and that "[a]ll of the funds go directly to the children."

According to prosecutors, a financial investigation and bank records revealed that Jason and Lacey Carney transferred funds from 2nd Milk for cosmetic surgery, massages, tanning, pet expenses, a cruise, personal mortgage payments, car/boat loans, and luxury vacations so often that it aroused the suspicion of donors. Using 2nd Milk funds, both Carneys traveled to exotic locations like Rome, Chili, Peru, Japan, Barcelona, Cancun, and Vietnam. Jason Carney also filed false tax returns for himself and 2nd Milk to hide his diversion of funds.

His wife, Lacey Carney, age 47, pled guilty to one count of misprision, that is, being aware of her husband's wire fraud scheme and failing to report is as required by law.

The couple also agreed to the forfeiture of their home due to the fact that wire fraud proceeds were used to pay towards their mortgage.

"Today's sentences highlights that those who misuse charitable platforms to enrich themselves will face significant consequences under the law," said Kevin R. Holmes, United States Attorney for the Western District of Arkansas, in making the announcement. "By diverting funds intended to sustain vulnerable children, Jason and Lacey Carney violated the trust of donors and inflicted profound harm on the very mission they claimed to champion. This office remains steadfast in its commitment to prosecuting financial fraud and protecting the integrity of charitable giving."

"The defendant exploited the charitable intentions of donors who believed their contributions would help save the lives of malnourished and orphaned infants around the globe," said Special Agent in Charge Donald "Trey" Eakins, IRS Criminal Investigation's Charlotte Field Office. "Instead, the defendant diverted nonprofit funds for his own personal expenses. Our special agents will continue to follow the money, unravel complex financial schemes, and work with our partners to ensure people who abuse charitable missions for personal gain are held fully accountable."

"Those who exploit charitable causes for personal gain betray both the donors who trusted them and the vulnerable people they claimed to serve," said Nicholas Collura, Principal Deputy Assistant Secretary for Diplomatic Security and Director of the Diplomatic Security Service (DSS). "DSS remains committed to working with our law enforcement partners to expose fraud and hold offenders accountable."

The Diplomatic Security Service and Internal Revenue Service Criminal Investigation investigated the case. Assistant United States Attorney Benjamin Wulff and DOJ Trial Attorney, Michael L. Jones litigated the case on behalf of the United States.

The Department of Justice had previously announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

Related court documents may be found on the Public Access to Electronic Records website at www.pacer.govLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link., Western District of Arkansas Case Number 5:25-CR-50005.