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Avoid Bogus Charities This Holiday Season

The scammers are out there; here’s how to avoid them

'Tis the season for many consumers to open their hearts and wallets to a variety of charities. But National Consumers League (NCL), the nation's oldest consumer advocacy organization, has issued an alert to consumers that con artists may take advantage of their generosity this time of year with bogus charities posing as legitimate ones.

"It's that time of year again, when we begin to hear from consumers about crooks' attempts to take advantage of the holiday giving season for their personal gain," said NCL Executive Director Sally Greenberg. "If you're thinking of giving to a charity this season, good for you! But be careful -- some scammers out there may be looking to take advantage of your generosity."

Scam complaints rising

Complaints to the Federal Trade Commission (FTC) about charity scams have become more frequent recently. The volume of complaints to the FTC's Consumer Sentinel system increased by 8.6 percent from 1.23 million in 2008 to 1.33 million in 2009. 

While the volume of complaints regarding bogus charitable solicitations remained a small fraction of overall complaints, they were reported much more frequently in 2009, increased by 82.1 percent over the same period (1,908 in 2008 versus 3,474 in 2009).

NCL warns consumers to avoid becoming a statistic this holiday season by doing their homework before giving to an unfamiliar charity. Non-profit tracking Web sites like GuideStar.org and CharityNavigator.org have a free databases with detailed information on many charities.

Dodging rip-off artists

NCL offers the following tips for the charitable-minded:

  • Research. Local newspapers or television or radio stations often compile lists of reputable charities responding to emergencies. Consider consulting these sources for information on how to give.
  • Be in control of what you give and to whom you give it! Consider setting up a personal charity/giving budget and deciding ahead of time to whom you want to give, rather that being pressured into giving on the spur of the moment by a phone or e-mail solicitation. Consider contacting a charity directly on the phone or via the Internet to ensure that your donation is going directly to the charity of your choice.
  • Pay the smartest way. Don't pay in cash, if possible. It is safer to pay by check or credit card. Be sure to get a receipt for any donation for tax purposes.
  • If a charity contacts, you, be cautious. If you're approached by an unfamiliar charity, check it out. Most states require charities to register with them and file annual reports showing how they use donations. Ask your state or local consumer protection agency how to get this information.
  • Get it in writing. Legitimate charities will be happy to provide details about what they do and will never insist that you act immediately.
  • Beware of sound-alikes. Some crooks try to fool people by using names that are very similar to those of legitimate, well-known charities
  • Know to whom you are talking. Ask about the caller's relation to the charity. The caller may be a professional fundraiser, not an employee or a volunteer. Ask what percentage of donations goes to the charity and how much the fundraiser gets.
Avoid Bogus Charities This Holiday Season The scammers are out there; here’s how to avoid them ...

Founder of New York Sham Car Donation Charity Pleads Guilty

Group spent over $2 million on personal expenses and real estate instead of helping families

Juky 2, 2010
The state of New York has busted the founder of a sham car donation charity for looting over $2 million in charitable funds.

Shoba Bakhsh, of Queens-based "Hope for the Disabled Kids, Inc.," pled guilty to lying to donors and misusing funds for herself and her family. As a condition of the plea, the charity will immediately shut down.

Hope for the Disabled Kids took in thousands of cars and had more than $2 million in revenue between the charity's founding in 2001 and 2009. When soliciting donors, Bakhsh promised that over 90 percent of donations would go to help disabled children.

However, no funds were used for any legitimate charitable purposes from 2007 to 2009. No records were produced to prove that funds were used for legitimate purposes prior to 2007 because Bakhsh destroyed documents and filed false paperwork.

"This individual manipulated donors and exploited children with serious medical needs in order to enrich herself and her family," said Attorney General Andrew Cuomo. "As a result of her actions, millions of dollars that should have gone to help disabled children were instead spent on department store bills and real estate. As our investigation continues, my office encourages New Yorkers to be generous and informed donors."

Pocketed donations

On its website, Hope for the Disabled Kids claimed that:

• Funds will "be utilized to benefit disabled children by purchasing medical equipment;"

• Funds will "help pay for medical expenses for families who are unable to afford [them];"

• Funds will "purchase books, toys, games and food during the holidays to distribute to children in hospitals."

Instead, Bakhsh spent the donated on herself and her family, including:

• Close to $500,000 in connection with the purchase of real estate in Florida and payments of real estate taxes on properties owned by Bakhsh and her husband;

• Payments on two different Macy's credit card accounts;

• School tuition for Bakhsh's children;

• Additionally, Bakhsh's personal checking account received cash deposits of nearly $250,000 between 2007 and 2009. During this period, she supposedly had no employment other than her job at Hope for the Disabled Kids, which reported paying her less than $50,000 per year.

Advertising blitz

Hope for the Disabled Kids solicited the donation of vehicles through print advertising outlets and its website, which has been shut down. Bakhsh and her group intentionally made false representations about the charity in order to trick people into donating their vehicles, including saying that more than 90 percent of the proceeds from the sales of donated vehicles would be spent on children in need. Bakhsh also posted forged testimonials on the charity's website that made it seem that it had made legitimate contributions to hospitals and health care facilities.

Bakhsh, of South Ozone Park, Queens, pled guilty in New York County Supreme Court to one count of Scheme to Defraud in the First Degree (class E felony) and two counts of Offering a False Instrument for Filing in the First Degree (class E felony).

As a condition of the plea, Hope for the Disabled Kids, Inc. will immediately shut down. Bakhsh is also forbidden from serving on the board or as an officer of a not-for-profit and from being employed at any entity engaged in the car donation industry. Bakhsh is expected to be sentenced on September 23, 2010.

How they operate

Charities involved in the car donation industry solicit contributions in the form of used vehicles, which they then sell to raise funds for humanitarian causes. Cuomo's industry-wide investigation into car donation charities has shown that some charities mislead donors about how much money is used for charitable purposes as well as where the money goes. In some cases, the car donation charity is a complete sham, with little or no money going to the causes the charity purports to support.

As part of the investigation, the AG recently sent subpoenas to 16 charities, fundraisers, and individuals seeking materials relating to the funds that charities and for-profit fundraisers have collected through car donation programs. Cuomo also sued to shut down a sham car donation charity, Feed the Hungry, Inc., for misusing funds meant for the homeless.

Founder of New York Sham Car Donation Charity Pleads Guilty...

Be Informed When Donating to Veterans Charities

Use of the words 'military' or 'veterans' doesn't mean the group is legit


As Independence Day approaches, you may be contacted for a donation by charities claiming to support veterans and active-duty service men and women. Kansas Attorney General Steve Six urges consumers to take a close look at those who are asking for money.

"We recognize our veterans and service men and women who have sacrificed greatly to protect the freedom we enjoy," said Six. "Making a donation to a veterans or military charity is an important way we can support our military personnel and their families. It is also important that, when making such a donation to support these brave men and women, consumers avoid falling victim to fake charities and scams."

There are a number of legitimate charitable organizations working to help veterans, active-duty personnel, and their families. Unfortunately, unscrupulous individuals capitalize on consumer patriotism to perpetuate fraud and make a quick profit. The AG's office has says it has received reports of potentially fraudulent activities.

Six urges consumers to verify the authenticity of a charitable organization prior to giving. "It is unfortunate that some use the name and symbols of our military to profit themselves and rob troops and veterans of aid and support," said Six. "By taking a moment to research and validate a charity, Kansans can ensure that their money is supporting worthy causes and not lining a scam artist's pockets."

Points to remember

When giving to charitable causes, consumers should remember the following:

• Recognize that the words "veterans" or "military families" in an organization's name don't necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.

• Ask to be provided information about the charity in writing. A legitimate charity will be willing to provide you with more information about its charitable purpose, programs, and use of funds.

• Do additional research before you donate. Search the charity online through a search engine. Check for complaints filed by other consumers.

• Call the office that regulates charitable organizations to see whether the charity or fundraising organization has to be registered in your state.

• Do not send or give cash donations. For security and tax record purposes, it's best to pay by check made payable to the charity.

• Contact your local Better Business Bureau to see if there are any complaints about the charity or search for the charity online.

Be Informed When Donating to Veterans Charities...

Missouri Court Orders 'Sham' Charity to Pay Restitution

Only one percent of funds went to charity

With so much need in the world, scam artists have no trouble finding a worthwhile charity to impersonate, exploiting consumers' good will and willingness to help. The latest example comes from Missouri.

The St. Louis County Circuit Court has ordered Sidney Young and a group called Our American Veterans, Inc., to pay restitution and civil penalties of $118,252 for deceptive solicitations in Missouri.

Missouri Attorney General Chris Koster calls the group "a sham nonprofit corporation," which he said claims to help homeless veterans when in fact, the vast majority of OAVI's revenue went straight into the pockets of Sidney Young, his family, and OAVI's employees and contractors. The group is based in Fort Valley, Georgia.

Koster said Young used telemarketers to convince potential donors that their donations would be distributed to "as many veterans as possible." He said that in 2007 and 2008, at least 632 Missourians gave more than $16,500 to OAVI.

Koster said OAVI never meant its primary purpose to be assisting veterans. He said that in reality, less than one percent of the donations actually went to veterans, and not one Missouri veteran ever received assistance from OAVI.

Koster filed suit against Our American Veterans, Inc., in May when he launched "Operation Broken Charity," an initiative to crack down on fraudulent fundraisers claiming to help police, firefighters, and veterans.

Contemptible

"It's contemptible that people would take advantage of decent, charitable Missourians by promising to use their money help the brave people who keep us safe," Koster said. "This action should be a message to fraudulent charity fundraisers that we will not tolerate this behavior."

Koster said that in addition to the restitution and civil penalties, the court issued an order permanently barring the defendants from soliciting in Missouri.

Consumers should be very careful when asked to donate to charities or relief efforts, such as the ones that have sprung up in the wake of the earthquakes in Haiti and Chile.

Here are some red flags that indicate the organization calling you for a donation is not legitimate.

• High pressure or threatening telemarketers who want you to contribute immediately.

• Someone calls and thanks you for a pledge you don't remember making.

• Copycat names. Names that might be misleading or deceiving.

Before contributing to any organization that's unfamiliar to you, ask that the information to be sent to you in writing. Ask how much of your gift will be used directly for the charity. Ask how much will go toward administrative costs. Legitimate charities have no problem giving you this information.

If you're contacted by someone who says they represent a well-known charity, don't rush to write a check. Don't hesitate to contact the charity to find out if they know about the appeal and have authorized it.

Above all, never give out your personal or financial information over the phone, or at the door.

Missouri Court Orders 'Sham' Charity to Pay Restitution...

Stingy Fundraiser Banned In Washington State

Company accused of duping Jaycees chapters and donors

A for-profit fundraiser that solicited donations for Jaycees chapters and other charities throughout Western Washington, as well as fake charities, will no longer solicit donations under a settlement with the Washington Attorney Generals Office.

In its lawsuit, the Attorney General accused Charitable Assistance Group, Inc., of Seattle, and its predecessor, Direct Funding, Inc., of violating state consumer protection and charitable solicitations laws. Also named as defendants were three company officials and solicitors: Justin McGuinn and his father, Joseph Michael McGuinn, both of Seattle, and Jennifer Bartlett aka Virginia Bartlett, of Vancouver.

The defendants had contracts to solicit donations for the Washington Junior Chamber (Jaycees) and Jaycees chapters in Renton, Kirkland and Vancouver; as well as the Firefighters Assistance Fund, Vietnow National Headquarters dba Veterans Now, Veterans Charitable Foundation and the Disabled Police Officers Guild of America.

We believe the defendants duped the Jaycees and individual donors by misrepresenting how contributions would be spent, said Assistant Attorney General Shannon Smith. The defendants were stingy and kept most of the money for themselves. Under this settlement, they agree to no longer solicit for any charity in Washington.

The states complaint accused the defendants of misrepresenting how donations were spent, creating an impression that paid solicitors were volunteers for the charities, soliciting for organizations that werent registered as charities with the Secretary of States Office and failing to submit required reports to the Secretary of States Office.

The defendants also were accused of soliciting donations to purchase Spinoza Buddy Bears to distribute to hospitalized children in the Puget Sound, despite lacking authorization from the toys manufacturer. And they were accused of soliciting for a number of fake charities such as the Northwest Firefighters.

According to records filed with the Secretary of States Office, only 9 percent of the $183,814 in charitable donations raised by the defendants went to their clients. In 2007, the defendants returned only 5 percent of the $319,723 they raised.

As a condition of the settlement, all of the defendants have agreed not to solicit charitable contributions in the state of Washington.

Defendant Joseph McGuinn violated a 1996 settlement that restricts his ability to solicit donations. In that case, McGuinn and his wife, while operating a fundraising company known as Diamond Vision Consulting and Tri-Star Promotion Corporation, were accused of falsely claiming promotions were authorized by the Seattle Seahawks and local police and firefighter organizations.

Stingy Fundraiser Banned In Washington State...

States Warn Against Dubious Charities

Attorneys General warn citizens about professional solicitors

December 9, 2009
Consumers have to walk something of a tightrope this time of year. Holidays are always an expensive time, yet many want to support charities and worthwhile causes. But the last thing you want to do is have your contribution line the pockets of the solicitor.

In Oregon, Attorney General John Kroger unveiled a list of Oregon's 20 Worst Charities and offered tips to consumers on how to donate wisely.

"In the middle of a recession, it is more important than ever that generous Oregonians make charitable contributions to organizations that help veterans and others who are in need," Kroger said. "It is critical, however, that people donate wisely. Although many charities do great work, some are little more than scams with good-sounding names but that do little to actually help the people they claim to support."

State law requires charities to file periodic financial reports with the Oregon Department of Justice disclosing how much money the organization raised and how the funds were spent. The Department's Charitable Activities Section has identified 20 organizations (see attached) that spent more than 75 percent of the donations they collected on administrative costs and professional fundraising.

While guidelines issued by the Better Business Bureau (BBB) suggest that charitable organizations should spend at least 65 percent of their funds on charitable programs, every charity on the Department of Justice's list devoted less than 25 percent of their expenditures on charitable program activities.

One organization near the top of the list, Shiloh International Ministries, solicits donations to provide medical necessities and other support to needy children, veterans, and homeless persons. According to the most recent financial filings, the California-based nonprofit spent an average of $1,023,215 per year, 96.35 percent of which went to management and fundraising.

Kentucky concerns

Unscrupulous charity solicitations are not just confined to one area of the country. With double-digit unemployment rates in Kentucky, for example, more Kentucky families are in need of a helping hand this holiday season.

Kentucky Attorney General Jack Conway says people who give to a charity should give wisely. Unfortunately, he says, there are unscrupulous or even fraudulent charities that prey on the generosity of Kentuckians.

"Every dollar donated to a reputable charity can make a difference in the life of someone who may be struggling to put food on the table or clothe a child," Conway said. "Irresponsible or fraudulent charities not only take advantage of the kindness of hard-working Kentuckians, they deprive those who need our help. Before you decide whether a charity deserves your donation, gather as much information as possible to make sure the charity is not a scam and that your donation reaches someone in need."

Both Kroger and Conway offer these tips for wise holiday giving:

• Donate to charities you know and trust.

• Be cautious of sound-alike charities and solicitors unable to answer questions.

• Always ask what percentage of your dollar goes to the cause.

• Don't be pressured into making a donation.

• Ask if the charity or solicitor is registered with the Office of the Attorney General.

States Warn Against Dubious Charities...

California Takes Closer Look At Commercial Fundraisers

Some fundraisers take large cut

There are a lot of people raising money for charity, but not all are unpaid volunteers. A close look might show that a significant portion of those soliciting funds for good causes are being paid to do so.

In California, Attorney General Jerry Brown has released a report showing that, while 1,359 commercial fundraisers in California raised almost $400 million in 2008, charitable organizations received less than 42 percent of those funds.

"Some commercial fundraisers do an excellent job of ensuring that the vast majority of funds they raise go to the charities, not to overhead or themselves. Others raise little, or worse, leave the charities in the red," Brown said. "Donors should do their homework before giving and consider how they want their contributions spent."

Commercial fundraisers, who are hired by charities to raise money on their behalf, typically charge a flat fee for their services or a percentage of the contributions they collect.

By law, commercial fundraisers must register with Brown's office prior to fundraising in California and must file annual financial disclosure reports detailing income and expenses for each fundraising campaign.

According to reports filed with Brown's office, commercial fundraisers collected $399.9 million in donations in 2008.

In total, just $167.6 million-or 41.9 percent of the funds raised-actually made it to the charities. The remainder was retained by the commercial fundraisers as payment of fees and expenses.

These figures, however, are averages and do not provide the full picture. Some charities received the vast majority of funds raised on their behalf, Brown said.



California Takes Closer Look At Commercial Fundraisers...

California Fires Bring Out The Scammers Again

Some so-called relief agencies are anything but

The fires are burning in southern California again, threatening lives and destroying homes and other property. And along with the devastation of the inferno comes the scourge of the scammers.

"After virtually every disaster, scam artists come out of the woodwork to defraud individuals wishing to help victims," California Attorney General Jerry Brown said. "Californians should give only to reputable organizations so their donations don't end up lining the pockets of criminals and opportunists."

Brown noted that fraudulent and misleading charitable solicitations are common following disasters - whether the donation request comes by phone, mail, in front of retail stores, or email. He advised consumers to take time to carefully consider fire-relief solicitations before giving, and offered the following tips:

• Closely review disaster-relief appeals before giving.

• Stick with charities that are reputable rather than those that spring up overnight. If you are unsure, check to see if the charity is registered in California with the Attorney General's Registry of Charitable Trusts. Registration does not guarantee legitimacy, but it is an important indicator.

• Take action on your own rather than responding to solicitations. Seek out known organizations and give directly by phoning the group, finding its official web site, or via regular mail.

• Listen closely to the name of the group and beware of "copycat" names that sound like reputable charities.

• Don't give through email solicitations. Clicking on an email may lead you to a site that looks real but is established by identity thieves seeking to obtain money or personal information.

• Do not give cash. Make checks out to the charitable organization, not the solicitor.

• Do not be pressured into giving. Even in times of emergency, reputable organizations do not expect you to contribute immediately if you are unfamiliar with their services. Be wary of appeals that are long on emotion but short on details about how the charity will help disaster victims.

• Ask what percentage of donations will be used for charitable activities that help victims and how much will fund administrative and fundraising costs. State law requires solicitors to provide such information if requested by donors. Be wary of fundraisers who balk at answering.

• Find out what the charity intends to do with any excess contributions remaining after victims' needs are addressed.

California Fires Bring Out TheScammers Again...

Massachusetts Puts Charity Telemarketers On Hold

Consumers not told fundraisers were pros

More states are taking harder looks at telemarketing operations that supposedly collect on behalf of law enforcement charity groups but in fact, keep most of the money for themselves.

In Massachusetts, Attorney General Martha Coakley's office has obtained two separate preliminary injunctions in conjunction with a lawsuit against Disabled Police Officers Counseling Center, Inc., a Florida public charity; its president, Terry Morrison; and its professional fundraisers, Patrick Kane, doing business as the Kane Marketing Group, Mark Hemphill, doing business as Infiniti Marketing Firm, and James Vincent, doing business as Northeast Advertising.

Under the terms of the first injunction, Disabled Police Officers Counseling Center, Inc., is restrained from engaging in deceptive practices or otherwise breaking the law while soliciting charitable donations in Massachusetts; must not destroy or alter records while the civil lawsuit is pending; and must account for money raised from Massachusetts residents in the next 30 days.

Under the terms of the second preliminary injunction, the professional solicitors involved in the lawsuit are restrained from engaging in deceptive tactics when soliciting funds in Massachusetts; must not destroy or alter records while the civil lawsuit is pending; and are prohibited from spending funds collected for the Disabled Police Officers Counseling Center, Inc., or any other charitable organization the defendants solicit for.

The preliminary injunctions were filed in conjunction with a civil lawsuit that was filed on May 20, 2009 in Suffolk Superior Court against the defendants. The lawsuit alleges the defendants misled potential donors into believing that fundraisers were volunteers calling on behalf of local disabled police officers.

The lawsuit also alleges that the defendants did not disclose their status as professional fundraisers, did not disclose the charitys Florida address, and did not file fundraising reports for their fundraising campaigns, all of which are required by law.

The lawsuit also alleges the professional solicitors working for Disabled Police Officers Counseling Center failed to disclose to potential donors their status as professional fundraisers who are paid by charitable organizations to solicit the public for donations.

The Attorney General's Office, through its Non-Profit Organizations/Public Charities Division, is responsible for overseeing the public's interest in the Commonwealths non-profit charitable organizations.

Massachusetts general laws require public charities to register and file annual reports with the Non-Profit Organizations/Public Charities Division of the Office of the Attorney General and copies of these reports are available to the public.

 

Massachusetts Puts Charity Telemarketers On Hold...

Feds, States Target Charity Scams

Bogus telemarketers claim to help police, firefighters, veterans

The Federal Trade Commission is joining with a number of states to crack down on fraudulent telemarketers claiming to help police, firefighters, and veterans.

The FTC, along with 61 Attorneys General, Secretaries of State, and other law enforcers of 48 states and the District of Columbia, have launched Operation False Charity, taking enforcement actions against 32 fundraising companies, 22 non-profits or purported non-profits on whose behalf funds were solicited, and 31 individuals.

The FTC and state agencies also released new education materials, in both English and Spanish, to help consumers recognize and avoid charitable solicitation fraud.

In these difficult economic times, Americans want to make every contribution count, said FTC Chairman Jon Leibowitz. The good news is theyre still being generous and donating to charitable organizations, including those that support our police officers, firefighters, military families, and veterans.

"The bad news is that some unscrupulous operators have seized on this goodwill to make a quick buck. The actions were announcing today demonstrate that federal and state partners will find charity scammers and we will stop them, Leibowitz said.

All of us share a deep trust and respect for our law enforcement officers, firefighters, and military service members, said Attorney General Chris Koster of Missouri. The attorneys general across the country will not stand idly by while greedy telemarketers take advantage of that trust and respect.

In Massachusetts this week, Attorney General Martha Coakley filed two separate actions this week against four professional solicitors and the two charities they fundraised for.

The first action alleges that Our American Veterans, a Georgia-based organization; its president, Sydney Young; and its professional fundraiser, Golden State Marketing, Inc., a Delaware corporation with offices located in New Bedford, engaged in deceptive solicitation practices in violation of state Consumer Protection laws.

The complaint alleges that the defendants misled donors into believing that fundraisers were calling on behalf of veterans groups based in Hingham and Hull and that their donations would benefit veterans in those communities.

The complaint further alleges that the defendants failed to disclose their status as professional fundraisers, and failed to honor requests to discontinue its solicitation campaign to raise funds for disabled and indigent veterans. A preliminary injunction hearing has been scheduled in this case for June 9, 2009.

In the second action filed in court, the Attorney Generals Office alleges that Disabled Police Officers Counseling Center, Inc., a Florida-based charity; its president, Terry Morrison; and its professional fundraisers, Patrick Kane, doing business as the Kane Marketing Group, Mark Hemphill, doing business as Infiniti Marketing Firm, and James Vincent, doing business as Northeast Advertising, misled potential donors into believing that fundraisers were volunteers calling on behalf of local disabled police officers.

The complaint also alleges that the defendants in this lawsuit did not disclose their status as professional fundraisers, did not disclose the charitys Florida address, and did not file fundraising reports for their fundraising campaigns, all of which are required by law. A preliminary injunction hearing has been scheduled in this case for June 19, 2009.

Given todays economic climate, charitable organizations are already struggling to secure funding for their missions through donations, Coakley said. Fraudulent solicitors not only take money away from legitimate organizations, but they also undermine the public's confidence in legitimate charitable fundraising. Fortunately, through some simple research and good common sense, donors can prevent much of this fraud, and ensure that donated funds go to support the worthy causes, rather than unscrupulous individuals.

 

Feds, States Target Charity Scams...

California Sues Charities For Stealing Donations To Public Servants

Multiple lawsuits agains telemarketers, donors for deceptive practices and fraud

As part of a nationwide crackdown on fraudulent charities, Attorney General Edmund G. Brown Jr. is filing today eight lawsuits against 53 individuals, 17 telemarketers and 12 charities that "shamelessly exploited" people's generosity and squandered millions of dollars of donations intended to help police, firefighters and veterans.

Brown's suits are intended to permanently stop the charities' deceptive practices and require the repayment of all funds raised under false pretenses. Brown is seeking involuntary dissolution of eight of the charities.

"These individuals shamelessly exploited the goodwill of decent citizens trying to help police, firefighters and veterans," Brown said. "In point of fact, a shockingly small portion of donations went to those in need, while millions went to pay for aggressive telemarketing and bloated overhead — and in one case — to purchase a 30-foot sailboat."

Brown filed these suits in conjunction with the Federal Trade Commission and 48 other states as part of a nationwide sweep called "Operation False Charity."

In California, just as in the other participating states, the so-called charities raised millions of dollars based on false claims that donors' contributions would benefit police, firefighters and veterans organizations. But in reality, these charities rarely benefit public safety personnel. And, in most cases, 85 percent to 90 percent of donations are used to pay the fees of for-profit telemarketing firms.

Last year, Brown launched an investigation into 12 of the worst offenders, resulting in the eight cases filed today in Los Angeles, Orange, San Bernardino, and San Mateo counties. It is estimated that since 2005, hundreds of thousands of Californians have been deceived by the solicitation campaigns these charities and their fundraisers have conducted.

Law Enforcement Apprenticeship Program

Brown today sued Los Angeles-based Law Enforcement Apprenticeship Program, its directors and its for-profit fundraiser, Rambret, Inc., for falsely promising contributors that their donations would be used to operate an apprenticeship program for at-risk youth. The program was never operated and no students were ever enrolled in it.

Instead, donations were used to pay for fundraising expenses, the personal expenses of the charity's directors and the purchase of a 30-foot sailboat.

In 2003, Law Enforcement Apprenticeship Program raised $529,863, but only $31,501 — just 6 percent — was spent on its program services. In 2004, the charity raised $372,623, but spent only $5,615 — 1.5 percent — on program services.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity in California again, and to prevent the fundraiser from soliciting funds for a charity in California until it complies with state law.

Brown also seeks a court order requiring the charity to file a report of its receipts and expenses, to recover the funds misappropriated by the directors and civil penalties in excess of $150,000.

California Police Youth Charities

Brown today sued Sacramento-based California Police Youth Charities, its executive director and its for-profit fundraisers — National Consultants, Inc. and Public Appeals, Inc. — for falsely promising contributors that 100 percent of donations would go to support the charity's programs to help at-risk youth. In reality, less than 20 percent of the $9 million raised in 2006 and 2007 was spent on charitable programs.

The charity also filed false documents with the IRS and the Attorney General's Office. In 2006, the charity reported that it made almost $1 million in grants, when it actually made grants totaling only $110,000.

Brown seeks a permanent injunction to end these deceptive solicitation practices. He also seeks to recover misappropriated charitable funds and civil penalties in excess of $100,000 from the charity and its for-profit fundraisers.

American Association of Police Officers, Police Protective Fund, and Junior Police Academy

Brown today sued Los Angeles-based American Association of Police Officers, Police Protective Fund, and Junior Police Academy, their officers David Dierks and Philip LeConte, and their for-profit fundraisers for misleading donors into thinking that their solicitors were volunteer police officers and that contributions would benefit donors' local police departments.

The for-profit fundraisers include: West Coast Advertising (known as Professional Communications Network) and Mark Christiansen (doing business as Charitable Fundraising Services).

Additionally, the charities violated both state and federal law when they filed reports with the IRS and the Attorney General's Office that under-reported fundraising and administrative expenses and over-reported the amount spent on charitable programs.

In 2007, for example, Police Protective Fund raised $6.8 million and claimed in its tax returns that it spent $1.7 million on its charitable program. However, that $1.7 million improperly included fundraising expenses, a $350,000 judgment paid to the State of Missouri and other administrative expenses.

Likewise, in 2007, American Association of Police Officers reported in its tax returns that it spent $493,798 on its charitable program. However, out of that amount, $425,000 was paid to the charities' officers and other administrative and fundraising personnel. David Dierks and Philip LeConte were each paid $168,000 in salary, and were also provided with vehicles such as a $45,000 Range Rover and a $25,000 Jeep Cherokee.

Brown seeks injunctive relief to prevent defendants from operating any charities in California and to stop future fraudulent solicitation and reporting practices. Brown also seeks to recover misappropriated funds and civil penalties in excess of $150,000.

Association for Firefighters and Paramedics

Brown filed suit today against Santa Ana-based Association for Firefighters and Paramedics, its president, Michael F. Gamboa and its for-profit fundraisers — Public Awareness, L.L.C., Community Support, Inc., and Courtesy Call, Inc — for falsely claiming that it used donations to assist local firefighters, paramedics, and burn victims.

Brown's office discovered that from 2005-2008, only 3 percent of approximately $10 million dollars was spent on assistance to burn victims. No funds were ever used to assist firefighters and paramedics.

The remainder — some $9.7 million — went to pay for the charity's fundraising expenses and overhead.

In addition, the charity sent fraudulent invoices to people who had not made a pledge and sent letters to donors who had never given, asking them to mail in their "usual" annual donation.

Brown is seeking to dissolve the charity. He also seeks a permanent injunction against the charity's president to prohibit him from any future involvement with a California charity, and civil penalties in excess of $150,000.

Association for Police and Sheriffs, Inc.

Brown today sued Fullerton-based Association for Police and Sheriffs, Inc., its directors and its for-profit fundraisers, Public Awareness, LLC, and Courtesy Call, Inc., for falsely claiming that the majority of donations would be used to help the victims of domestic violence.

Brown's investigation revealed that of the $2.6 million raised in 2005 and 2006, 90 percent of the donations went to pay the for-profit fundraisers. Most of the remaining donations were used to pay salary and other personal benefits for its president, Lloyd Jones, and others.

In violation of federal law, the fundraisers blocked donors' Caller ID. Once on the phone, the fundraisers engaged in aggressive and abusive conduct.

The investigation also found that the charity and its for-profit fundraisers sent pledge confirmation cards to people who never agreed to donate and that some of the charity's fundraisers represented that they were police officers, when they were not.

Brown seeks to dissolve the charity, recover improperly diverted funds, recover civil penalties in excess of $150,000, and to obtain a permanent injunction preventing all defendants from any involvement with a California charity until they comply with California law.

Coalition of Police and Sheriffs, Disabled Firefighters Fund, American Veterans Relief Foundation, et al.

Brown today filed a lawsuit against Santa Ana-based Coalition of Police and Sheriffs, Disabled Firefighters Fund, and American Veterans Relief Foundation, their directors and for-profit fundraisers for falsely claiming that donations would be used for programs to help injured police and firefighters, and homeless veterans.

The for-profit fundraisers include Campaign Center, Inc., KWS Productions, Inc., Tel-Mar Productions, Inc, Community Publications, Inc., and Roman Promotions, Inc. Through 2005, the charities raised $17 million, but only $351,000 — approximately 2 percent — was spent on programs for cops, firefighters, and veterans. The vast majority of donations went to paid telemarketers.

The President, Jeffrey Duncan, used charitable funds for his personal expenses, including trips to Hawaii and to Las Vegas, and for meals, including one for $1,200 at Medieval Times.

Joseph Shambaugh, who founded all three of these charities, was indicted by federal authorities on charges of mail fraud and money laundering. He is currently at large.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity or being involved in charitable fundraising in the future, and to prevent the fundraisers from soliciting on behalf of a charity in California until they comply with state law.

He also seeks to recover misappropriated charitable funds and civil penalties in excess of $100,000 from the charities, their directors and for-profit fundraisers.

Homeless and Disabled Veterans

Brown today sued Washington, D.C.-based Homeless and Disabled Veterans, and its for- profit fundraiser, Atmost, Inc. for falsely representing to donors that their charitable contributions would be used to assist homeless and disabled veterans in California with food, shelter, and self-help programs. Yet no donations were used for these purposes.

Instead, the vast majority of the donations — over 70 percent — were used for fundraising expenses, and the rest went for administrative expenses at its headquarters in Washington, D.C.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity in California again, and to prevent the fundraiser from soliciting on behalf of a charity in California until it complies with state law.

He also seeks to recover misappropriated charitable funds and civil penalties in excess of $150,000 from the charity, its directors and its for-profit fundraiser.

Organization of Police and Sheriffs

Brown today sued San Bernardino-based California Organization of Police and Sheriffs, its directors, officers and its for-profit fundraisers — Civic Development Group, LLC and Rambret, Inc. — for falsely representing that donations would be used to benefit law enforcement officers and that 100 percent of each donation would be received by the charity.

Donors were told that their contributions would be used to purchase bullet-proof vests, make grants to families of officers killed or injured in the line of duty, provide veterinary treatment for service animals injured in the line of duty and mentoring of at-risk youths.

Out of the $30 million raised from 2005 to 2007, over $25 million was spent on fundraising.

No money was spent on bullet-proof vests, no grants were made to families of officers, $6,600 was spent on veterinary treatment for service animals, and $16,500 was spent on mentoring.

Brown seeks to dissolve the charity, to prevent the directors from operating a charity in California again, and to prevent the fundraisers from soliciting on behalf of a charity in California until they comply with state law.

He also seeks to recover misappropriated charitable funds and civil penalties in excess of $150,000 from the charity, its directors and its for-profit fundraisers.

The Attorney General's Office offers the following tips to potential donors to help them avoid being the victims of charity fraud:

• If you receive an unsolicited call asking for a donation, it is most likely from a paid telemarketer who may keep a substantial part of your donation as payment of fundraising fees.

• Recognize that the words 'veterans' or 'military families' in an organization's name don't necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.

• Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.

• If you have any doubt about whether you have made a pledge or a contribution, check your records. If you don't remember making the donation or pledge, resist the pressure to give.

• Check out an organization before donating. Some phony charities use names, seals and logos that look or sound like those of respected, well-established organizations.

• Ask the soliciting charity or the paid fundraiser what percentage of your donation will go towards fundraising expenses and what percentage will go towards the charity's charitable purpose.

• Do not send or give cash donations. For security and tax record purposes, it is best to pay by check made payable to the charity.

• Ask for a receipt showing the amount of your contribution.

• Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win a sweepstakes.

 

California Sues Charities For Stealing Donations To Public Servants...

Charity Scams Increase As Holidays Approach

Some so-called "charities" are outright scams that pocket all the funds people contribute

As we near the end of the year, many people will give generously to charities and good causes -- but increasingly these donations never reach the people who need help. Some so-called "charities" are outright scams that pocket all the funds people contribute.

Iowa Attorney General Tom Miller says even seemingly legitimate charities use professional fundraisers that eat up 80 to 90 percent of the donations in "fundraising expenses," so almost nothing is left for true charity.

"Fraudulent and questionable charities cheat donors, hurt legitimate charitable organizations that rely on donations - and shortchange people who truly need help," Miller said.

How to protect yourself from falling for a fraudulent charity?

• Ask questions. Reputable charities welcome questions. Ask how much of your donation goes for the charitable purpose, and exactly how your contribution will be used. Ask if the caller is a professional fundraiser.

• Ask phone solicitors to send written information. Check out the charity before you make a decision. Be suspicious if they refuse to send solid information. Check them out at the national Better Business Bureau "wise giving" site - www.give.org.

• Don't be fooled by "look-alike" names. Some scams use names that sound impressive and are designed to resemble well-respected organizations.

• Be very wary of calls from supposed "law enforcement" or "firefighter" charities. Contact your local sheriff or police department to check out claims that a donation "will be used locally." Ask for information in writing before you agree to give. Ask if the caller is a paid professional fundraiser, and ask how much of your gift will go to the charitable purpose and be used in your community.

• Don't give your credit card or checking account numbers over the phone to someone you don't know.

Most foolproof is to give directly to a known charity of your choice. That's always the best option. Check your telephone directory for a charity's local office and contact the office.

Charity Scams Increase As Holidays Approach...