A for-profit charity comes under scrutiny as members describe shady dealings

Having His Cake and Eating it Too 

A for-profit charity comes under scrutiny as members describe shady dealings

Former members of the for-profit investment group and fraternal organization known as Cakeboy & Cakegirl Inc. say that the company to which they belonged was and is a sinister scam, that Chief Executive Officer Derrick Watson was and is a professional con artist who embezzled funds from dues-paying members to bankroll a lavish lifestyle.   

At its peak, Cakeboy & Cakegirl Inc. counted more than 300 members, hosting parties and "networking events" at their headquarters in Warrensville Heights in addition to periodic community service initiatives. Membership entailed a $55 one-time fee and then a $40 monthly payment thereafter. Co-founder Antwon Joiner said that Watson routinely funneled those dues directly to himself.

"You can do the math," said Joiner. "It was to the tune of $550,000."

But it wasn't just the money. Joiner said that he was compelled to quit the organization earlier this year primarily because Watson was preying on female members, collecting new members, in fact, expressly for the purpose of sleeping with them, he alleged. Joiner claims that sometimes Watson would have sex with new recruits in introductory "interviews."

"He was like the 2013 Ted Bundy," said Joiner. "No matter how many women he got, he needed new meat. He's honestly one of the sickest people I've ever met."

That's a far cry from the portrait painted of Watson and his organization in the Plain Dealer's "Community Heroes" series in December, 2011. There, Cakeboy & Cakegirl was described as "unique," "fun-loving," "inventive," and even "well-organized." Author Margaret Bernstein praised Watson and his three co-founders for popularizing community service among their demographic, African-Americans in their 20s and 30s.

"We give back in a fun way," Watson told Bernstein. "We throw parties, but it's not just about that. The vision is to build each other and build the community surrounding us. Each member will tell you the same."

That's doubtful.

What each member will likely tell you is something entirely different about Cakeboy & Cakegirl. Few people have any clue as to what went on behind closed doors, or for that matter what the company was, exactly, in the first place. A for-profit investment group?

Joiner said that the idea was to create a sort of 401K or mutual fund, but with none of the penalties those investments incur.

"What Derrick actually wanted to do was something different, like the Cleveland Masons or something, like a secret society," Joiner said. "But then we held a hotel party and realized we could actually make money off of this, doing parties and entertainment. The company would've run just fine if he didn't go sleeping with all the members. I told him it's like at Wal-Mart. If you're a manager, you can't go sleeping with all your cashiers."

As a moral and professional guideline, that's a sensible practice to adopt, but sleeping around isn't a crime; creating a bogus company and stealing money, however, is.   

Of Cakeboy & Cakegirl's triune mission -- fraternity, volunteerism, investment -- the "investment" element was the most dubious.

"We always wanted to know what we were investing in," said Orville Hentley, a faithful dues-paying member who was instated briefly as president when rumors of financial foul play surfaced on Facebook. "We were upset with Derrick because we were told that there would be investments, but no one ever knew what the investments were."

Joiner said that the company promised it would give out stock rebates to members in exchange for their dues. "But there were no stock rebates at all. Derrick used the funds to pay for trips, alcohol, lobster, care for his dog, clothes, and other items."

Thurston Jennings III, a union electrician who oversaw the Cakeboy & Cakegirl board (among other things), said that Watson issued "quarterly reports" which outlined fabricated stock holdings for members.

"He'd say, you have stocks in Charmin or you have stocks in KFC or Happy's chicken, but it was just a piece of paper," Jennings said. "And then when members wanted to know the progress of their stocks, Derrick would call them Cake-haters and threaten to remove them from the company."

And those threats weren't empty. Watson enjoyed an exalted form of leadership in which he had ultimate power. Here's a selection from the online "application":

In order to successfully complete my 90-day probationary period and thus become an Official Cakeboy&Cakegirl Inc. Corporate Member, I understand that I must adhere to the following: a) I must pay my dues no later than the 15th of the month, b) I must abide by every regulation set forth in the CB/CG Inc. ZERO TOLERANCE policy, c) I must promote all Cakeboy&Cakegirl Inc. events, as well as the CBI/CGI website via any and all Internet networking sites I may be a part of, and d) I must maintain strong communication with my Team Leader. If I do not adhere to the aforementioned regulations, I understand that I may be dismissed from the program at the Executive Board's discretion, without refund of any monies I may have previously invested into Cakeboy&Cakegirl Inc.

I am also agreeing that once I do become a member of this organization, I am to remain exclusive to Cakeboy&Cakegirl Inc., meaning I will not join or work with any other entertainment or social networking company, nor will I start my own entertainment or social networking company. I also agree that I will not use or disclose any Cakeboy&Cakegirl Inc. information, nor will I use or disclose Cakeboy&Cakegirl Inc.'s methods of operation. Should I not adhere to the terms set forth, I understand that I can and will be subject to legal action.

The paranoia and megalomania, not to mention balls, on display is almost staggering. Never mind the fact that "disclosing CB/CG's methods of operation would be impossible, given the super-secret, indefinite nature of its corporate structure.

"Long story short: Of the $40 monthly fee, $20 was supposed to go back to the company and $20 was supposed to go to investments," said Jennings. "And I want to know: Where is the money? All that money. Derrick at one time said that there was only $600 left in the bank account, and to me, that's unfathomable, given the volume that we were taking in."

Joiner's $550,000 estimate is surely too high. But with the $55 entrance fee, Jennings said it would be reasonable to assume they were generating close to $100,000 per year.

That money went to a company bank account that was another subject of heated controversy. Only Watson and co-founder LaTonya Hobson, who doubled as the company's Finance Director, had access to it.

Antwon Joiner said that Derrick Watson fathered LaTonya Hobson's baby. Not only that: Joiner alleged that Watson's ongoing relationships resulted in several other pregnancies, and Watson dipped into company funds to pay for child support.

Thurston Jennings couldn't say for certain whether or not Watson fathered other children, only that "it is alleged to be so," and that "the facts support it. He definitely did have inappropriate relations with members. That I'll say on record."

Joiner was much more direct: "Dick pictures and shit. Derrick's the inbox king."    

When confronted about these manifold allegations, Watson only chuckled, saying it was all "nonsense" and "unfortunately, I hate to say it, ignorance." He characterized Joiner and those who abandoned Cakeboy & Cakegirl as "haters," and said that they had been dismissed for various reasons (punitive measures, he intimated) and were now waging a campaign to sabotage his company.

Watson, on the question of sleeping with members: "Misguided and silly."

Watson, on the question of stealing company funds: "I have a strong career professionally. I have no reason to steal anything."

Watson, on the question of child support: "I'm not even on child support. I go hard for my kid."

Watson, on Joiner: "He smacked one of my managers in public and because of that, he was asked to leave. Now he's out to destroy the organization. He went on the radio and told everybody it was a scam."

Joiner admitted the altercation, and admitted as much on the radio -- "slapping a chick for being in my face at 3 a.m. at Gyro George on Northfield...and it was a playful slap, not a gorilla pimp slap" -- but maintained that Derrick wanted him out so he could continue filching funds unchecked.

Jennings confirmed the confrontation and said he even orchestrated the repercussions of Joiner. "I set the fine and suspended him from the next few parties. I have all the emails right here. But Derrick loves to twist a story. If his argument hinges on that incident, why did I walk out the door too? Why did all the others quit?"

Jennings said he called an emergency board meeting in January to announce his resignation. He could no longer tolerate the bad blood and immature leadership. He tried to counsel the executive board -- at 36, he's several years older than the various Chiefs on the executive committee -- but had had enough when he heard that Watson was fooling around with members.

"Look, I'm after justice on a bigger scale." Jennings said. "If things were done in bad faith, or in a misleading way, I want every ounce of justice for the members and myself."  

Watson claimed there are still 250 members in the current Cakeboy & Cakegirl, Inc. and are trying to rebuild in the wake of what he characterized as basically a PR snafu. Orville Hentley speculated that the number might be closer to 80. Hentley and Watson both said that not all members pay dues regularly.

"At most, we had 100 paying members at a time," Watson said, adding that he'd often reward members for frequent appearances at community service events. "But it costs a lot of money to run a company. That money went to rent, office bills, lights, gas, phone conferences. The bills really added up."

Joiner disagreed. He said that office space was donated free of charge and that most of the bills went unpaid. For whatever it's worth, the company phone line is certainly out of service.

So why would anyone continue paying money month after month into an organization for which the benefits were always hidden, and in which the leadership made promises that were never kept?

"A lot of people pay to be in the spotlight," suggested Joiner. "They pay to be in the club. They pay to be around people who drive fancy cars."

Jennings had a similar prognosis: "When you sell that much hope like Derrick did, like a preacher does, you will have people going to great lengths to keep it sacred. They just want to belong. It's like the Bloods or the Crips. A lot of these people didn't have the respect at home and they don't care what's going on in the organization. They just want to belong."

It's often church that people turn to for comfort and nourishment in times of distress, and Joiner didn't stray far from religious imagery either. Only he didn't consider Derrick Watson a preacher.

"Cakeboy was making Derrick Watson into a God," Joiner said.

"And that's what he always wanted."

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