The Forum on Prisoner Education was wound up over the summer after its yearly budget of pound;150,000 ran out in less than five months. Steve Taylor, its director, and a former prisoner, quit in May.
Police in east London, where the forum was based, confirmed they are investigating a complaint relating to possible fraud at the charity, but declined to comment further.
The forum has failed to submit any accounts to the Charity Commission since its registration three years ago.
Mr Taylor, 30, told FE Focus that he was not aware of any police investigation and that he had not been involved in any fraudulent activity, but there had been overspending. He blamed the charity's downfall on the cost of events that were cancelled due to lack of interest, such as one at Birmingham's National Exhibition Centre, which cost pound;9,000 in cancellation fees.
On the investigation, he said: "I don't know anything about that. I've not been approached by the police. I will talk to the police if they want to talk to me.
"We overspent. It's jointly my and the trustees' responsibility.
"We were a very busy charity. We had a lot of stuff going on with the green paper and the all-party Parliamentary group, and I allowed myself to concentrate on that side of things. I took my eye off the ball and that's why it wasn't noticed as soon as it could have been. We fucked up but a huge amount of good work went on. It's important that is not forgotten."
Mr Taylor has revealed in a newspaper article that 10 years ago he served four months in prison for an offence of deception.
He became involved in prison campaigning after the death of a friend in custody and he says trustees of the charity knew about his conviction and supported his appointment.
He claims the trustees should have payed more attention to the charity's finances and that there were differences of opinion between himself and the chairman, David Wilson, about the way each were doing their jobs.
Professor Wilson said: "We accepted the resignation of Steve Taylor when it became clear that there were not enough funds to continue the work of the forum."
He said the trustees had repeatedly asked about the failure to submit the accounts.
Mr Taylor claimed that the 2004 accounts, the first ones the charity were required to file, were sent to the commission. The commission says it did not receive them. He also said that he left before this year's accounts were due and that the trustees were legally responsible for them.
Professor Wilson said he hoped the work of the charity will continue, perhaps through other organisations in prison education.
The charity's creditors are being directed to the Milton Keynes office of accountants Baker Tilly.