Charity Scams

The main problem with donating to charity is that the world is full of scam artists happy to falsely pose as a charity in order to collect your “charity budget” for themselves. Other scam artists will collect money in the name of legitimate charities but keep the lion's share of donations for themselves, rather than give it to the charity in question.

It's bad enough that the New York State attorney general's office has a “Charities Bureau” dedicated to investigating such things, and on July 1 the Charities Bureau reached a $24.6 million settlement with two for-profit direct mail vendors, Quadriga Art and Convergence Direct Marketing, over collections they made on behalf of the  (DVNF).

Attorney General Eric Scheniederman said in a July 1 press release that:

“This investigation sheds light on some of the most troublesome features of direct mail charitable fundraising as it is practiced in the United States today …. Taking advantage of a popular cause and what was an unsophisticated start-up charity, these direct mail companies used cleverly designed but misleading mailers to raise tens of millions of dollars in donations from generous Americans, nearly all of which went to the fundraisers and their agents, and left the charity nearly $14 million in debt. Charities and their fundraisers that rely on direct mail campaigns can and must do better -- and this settlement is an important milestone on the path forward.”

$10 million

The settlement requires Quadriga to pay $9.7 million in damages, forgive $13.8 million in debt that DVNF owed it, and pay the state of New York $800,000 to cover costs. Convergence, meanwhile, will pay $300,000 in damages.

The two companies also must pay $10 million to assist the disabled veterans who were supposed to have been helped by the monies donated to DVNF.

Although Schneiderman's investigation naturally focused only on problems in New York State, the settlement is likely to have repercussions nationwide.

CNN started investigating Quadriga in 2010 (and took credit for Schneiderman's later interest in the company), saying that since 2008, Quadriga had raised $116 million on DVNF's behalf – with $104 million of that going right back to Quadriga – and what donations did trickle through to DVNF were for the most part useless.

In 2011, for example, DVNF made donations to St. Benedict's, a small veterans' charity in Alabama, after devastating tornadoes swirled through the region. St. Benedict's director J.D. Simpson, in 2012, told CNN what sort of donations they actually received:

"They sent us 2,600 bags of cough drops and 2,200 little bottles of sanitizer," J.D. Simpson told CNN. "And the great thing was, they sent us 11,520 bags of coconut M&M's. And we didn't have a lot of use for 11,520 bags of coconut M&M's. "

What to do

Incidentally: if you want to donate to a charity, whether a home for disabled veterans, domestic-violence victims or anything else, the best thing to send is cash, not stuff — on the off-chance your charity of choice actually thinks “Y'know, it sure would be helpful if we had 2,600 bags of cough drops and a truckload of coconut M&Ms,” they're still better off receiving money which they can then use to buy the cough drops and coconut candy.

The same holds true for “short-term” charities: if a natural disaster hits a given region, and people there need clothes and blankets, the best thing to do is send money, because charity workers and volunteers don't have time to sort through piles of donated fabric items to determine what's worth keeping or who it should go to.

When disaster strikes, you can be sure that scam artists will be close behind. The latest example is the massive mudslide in Washington State. 

Everyone would like to help but Washington Attorney General Bob Ferguson warns that rip-off artists are already out in force.

“All of us in Washington and around the country have deep sympathy for the victims and their loved ones and friends at this tragic time,” Ferguson said.

“It is a natural instinct to want to provide assistance right away, but ... I advise potential donors to exercise caution and make sure their hard-earned dollars go for the purpose intended, not to line the pockets of scam artists.”

Secretary of State Kim Wyman added: “Our hearts go out to everyone affected by this horrific mudslide. So much was lost by so many. I’m heartened that many Washingtonians have a strong impulse to be a part of the relief effort, at least financially, and to help the victims of this tragedy. I support that, obviously.

“But as the Attorney General and I continue to emphasize in times like these, sadly there always seem to be rip-off artists who take advantage of people. It is shameful, but some so-called charities take advantage of our generous nature. I want people to donate to charities they know and trust, if that’s their desire, and I want no one’s money used to simply line some con-artist’s pocket.”

Here are some tips to help you avoid being taken in by phony appeals:

• Be suspicious of solicitors requesting immediate donations. Don’t rush decisions and consider contributing at give.org, a website run by the Council of Better Business Bureaus.
• Make sure that charities are qualified to provide the type of disaster relief that is necessary.
• Avoid cash donations. Write a check directly to the charity, not the fundraiser.
• Never give out credit card numbers over the phone.
• Be wary of “new” charities with unverifiable background information.
• Watch out for solicitations from fake “victim” or memorial social media accounts.
• Don’t be fooled by a name. Be watchful of charities that use sympathetic sounding names or names similar to well-known legitimate charities.

Pete Thomson is President/CEO of McQ Media Inc, a media and advertising firm based in Dallas, Texas.   Thomson’s weekly radio program, The Consumer Team, airs on CBS Radio’s KRLD Radio in Dallas, Texas.

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During the holiday season, many Americans open up their wallets to support a favorite charity. From local non-profits to major national charities with $1 million-plus advertising budgets, the non-profit landscape is more crowded and competitive than ever.

Just how important are the holidays to your average charity? Non-profits will often admit that over half of all their contributions are received in the fourth quarter, with much of the money being received in December.

Largely because of the strategically crafted marketing campaigns, it’s easy to assume that non-profits are good managers of the money we give them. The images of hungry children being fed or other acts of kindness that result from a donation are indeed powerful. Yet, the reality in today’s marketplace is that a high percentage of non-profits are not effective at managing the donations they receive. 

Some of the biggest, most reputable-appearing non-profits and ministries that dominate television and radio make big promises in their marketing.  However, in many cases, a relatively small percentage of donations actually reaches the needy.  In the case of many of the web-based charity campaigns, little or no money is going to the cause that is advertised. 

Like the Wild West

Charities and ministries that were founded with a mission of helping people, can lose focus of their foundational purpose because of the jaws of overhead.   CEO and leadership salaries, marketing and other infrastructure expenses can easily turn even the best-intentioned non-profit into an organization that is overtaken with the costs of doing business.  

Thanks to several charity watchdog groups, consumers now have access to reliable and unbiased information regarding charities. Charity Navigator is a New York based non-profit that rates non-profits in a number of key criteria. The Evangelical Council for Financial Accountability (ECFA) offers a similar service which rates Christian charities.

Sandra Miniutti, VP/CFO at Charity Navigator, says that donors need to be very careful before giving money to a charity. She said, “There’s a lot of scoundrels and thieves out there. There are more than a million public charities in America today. The IRS is charged with overseeing them at the federal level and there’s very little oversight. It’s a little like the Wild West and donors need to dig deeper into a charity’s performance before they hand over their hard earned money.”

Financial transparency, according to Miniutti, is an important cornerstone to responsible non-profits. Ms. Miniutti indicated that many non-profits open their books to donors and the general public. Such transparency gives donors a way to confirm that their gifts are being utilized appropriately.

Lack of transparency

Still, a number of non-profits don’t open their books to the public. Many of these, according to Miniutti, are faith-based non-profits that are not required to share financial information. One such faith-based charity is The Salvation Army. Miniutti said that she finds The Salvation Army’s lack of financial transparency troubling.

“If a group is considered a house of worship by the IRS then we’re not able to rate it. And believe it or not, that includes The Salvation Army takes that exemption," she said. "They don’t have to file any financial data with the IRS so we can’t get access to data to evaluate them. We’ve asked them many times to share the data with us and they’ve refused to do so. We’ve found other religious groups that have the exemption with the IRS that will still provide us the data because they know that it’s important to their donors to see how they’re performing financially and to prove that accountability and transparency piece to them.”

Beyond financial transparency, consumers should look at other financial data to ensure that a charity is using donations responsibly. Overhead should be measured as a percentage of total gifts received. According to Miniutti, the most responsible charities keep overhead to less than 25% of total cash gifts received. Another area to analyze is charity CEO salaries, which Miniutti says should be in line proportionately with the size of the non-profit.

Cost of acquisition

The cost of donor acquisition is important because it measures how much a charity pays to third parties for delivering new donors. Radio stations, for example, will sell non-profits large advertising campaigns which are designed to recruit new donors. Charities and media companies attempt to justify the process of charging nonprofits to raise money because the marketing campaigns generate new, incremental donors for a non-profit.

But according to Miniutti, such marketing campaigns cut into charity operations and efficiency: “Anytime there’s a middleman involved, whether it be a telemarketing firm or a radio station trying to take a piece of the pie, that’s very disturbing. The truth is giving doesn’t change much in America from year to year. And if some of that money is evaporating into for profit companies, then the charitable sector has less to fulfill their worthy mission.”

What to do

In spite of the bad charities and scams, it is possible to connect with worthy non-profits. Here are some suggestions.

Use The Watch Dogs  Tap into the vast resources of the charity watch dog organizations we’ve cited. Their services are free and can offer important information.

Don’t Give to Door-to-Door Solicitors Because fake credentials and even uniforms can be easily produced, avoid giving to any charity that comes knocking on your door. Be especially wary of the local organizations with volunteers soliciting for funds on street corners. Charity Navigators generally gives low marks to police and fire fighter charities.

Delete Charity Emails Unless you have an established relationship with a charity that you’ve first initiated, consider all the email solicitations to be bogus.  Even emails that appear to be from a major charity are often a front for a scam, often located off-shore and out of reach of US laws.

Charity Scams Target Older Givers  Older people sadly often fall victim to charity scams.   Their general lack of sophistication with email (see email scams above) combined with isolation and their generosity makes for a perfect profile for the bad guys to go after.   Take time to make sure that the seniors in your life become well informed about charity and non-profit scams.

Charity scams will only get more sophisticated and effective in the future.  Indeed, high technology has given the bad guys a new platform to operate in with great anonymity.  Because of this, consumers need to be even more vigilant in our efforts to separate the good from the bad.    Giving to reputable and responsible charities can truly impact the lives of hurting people.   Before giving, do your research to make sure your dollars are being used wisely.

Following disasters like the Oklahoma tornado, scam charities are quick to exploit the tragedy and misery, cynically tugging on heartstrings to line their own pockets. Consumers everywhere should be on guard.

“For those folks around the country who want to donate funds to help families in Oklahoma, please be alert and only donate to reputable relief charities such as the Salvation Army or the Red Cross," said Oklahoma Attorney General Scott Pruitt. "The first scam we typically see after devastation like this is charity fraud."

Scam operators may come at you a number of different ways. They may operate bogus charities that contact people by telephone to solicit money or financial information. Potential victims might receive an email to steer them to bogus websites to solicit funds, allegedly for the benefit of tragedy victims.

Sometimes these fraudulent websites are hard to distinguish from those of of legitimate charities. Sometimes they adopt a name that sounds familiar, similar to a charity you've heard of.

Identity theft

Sometimes they're after more than a simple donation. Sometimes they want your identity. After obtaining your personal information, they may clean out your bank account or open credit accounts in your name.

On its website the Internal Revenue Service (IRS) has an Exempt Organizations Select Check tool. You can use it to identify qualified charities. Only donations to qualified charitable organizations are tax-deductible. 

You can also find legitimate charities on the Federal Emergency Management Agency (FEMA) Web site.

Iowa sting

Iowa Attorney General Tom Miller has waged a lengthy and successful campaign against questionable charity fundraisers who call residents of his state. He recently obtained a court order barring a Florida telemarketer from operating in Iowa.

In an ongoing sting operation, Miller obtained the Des Moines telephone number of an elderly resident and set it up with a recorder and one of his officers. When the telemarketer, claiming to be from A Child's Dream Foundation, called with its pitch, Miller recorded it and presented it as evidence. The audio of the call, posted on Miller's website, serves as a good example of how these pitches work. 

The telemarketer was Telequal LLC. Its representative “outright lied” in the call, Miller said.

“She said she was calling from the charity, claimed that the charity focused primarily on sick Iowa kids, and also claimed that a lot of each donation went to the kids,” Miller said. “In truth, the call was coming from Telequal. They were asking for money for an out of state charity that has no special Iowa focus, and 85% of every dollar donated went to the telemarketer, not to sick kids.”

What to do

Never respond to charity appeals from telemarketers. Legitimate charities don't work that way.

Contribute only to established, reputable charities. In the case of the Oklahoma disaster, the state's attorney general has suggested the Red Cross or Salvation Army.

Never contribute cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the donation.

If you suspect fraud, report it to you state attorney general's office.

Tragedy often brings out the best in people.

As we saw in Boston earlier this week, people ran toward the blast site, putting themselves at risk, trying to help bombing victims in any way they could.

Unfortunately, it also brings out the worst, with the scammers crawling out from under their rocks to take advantage of the situation.

This is prompting numerous warnings, including one from Oregon Attorney General Ellen Rosenblum, to watch out for phony charities soliciting funds for the victims.

Exploiting disasters

The lowlifes employ many tools to exploit disasters for personal gain. News accounts note that a fake Twitter account appeared almost immediately after the bombings in Boston. This scam, called @_BostonMarathon, offered to donate $1 for every retweet. It was quickly suspended after users warned the account was fake.

“Scammers came out in force after the 9/11 terrorist attacks, after Hurricane Katrina, and after Superstorm Sandy,” said Ellen Klem, director of consumer outreach and education in the Oregon AG's office. “They’ll try once again after Monday’s senseless bombing. Don’t let them prosper off the tragedy. Be generous, but skeptical.”

Tips for charitable giving

When considering a donation, consumers should keep the following in mind:

• Do not give out personal information such as credit card or bank account numbers over the phone.
• Checks should always be made payable to the organization not the person collecting the donation.
• Beware of callers who want your money fast. When solicited by phone, always ask the caller to send you written materials about the charity. No legitimate organization will insist that you donate immediately
• Do not donate cash. Legitimate charities will be pleased to receive a contribution by check. Don’t send contributions with a “runner,” by wire or overnight parcel pick-up service.
• Be sure you are contributing to a legitimate organization. You can do this by visiting www.guidestar.org, a national clearinghouse of information about charities and their performance.

It's not against the law to earn a profit by soliciting money for charity. But consumer advocates say there needs to be more transparency, so potential donors know how much of their contribution goes to the cause and how much goes to the fundraiser's bottom line.

Toward that end California Attorney General Kamala Harris has released a report on the activies of commercial fundraisers in the state. Her data shows that for-profit fundraisers in California raised $362.9 million in 2010, of which charitable organizations received less than 45 percent.

This represents an increase from the 2009 total of less than 43 percent. The data is included in the California Department of Justice's Annual Report of Commercial Fundraisers, produced by the Charitable Trusts Section.

"The data in this report allows donors to make informed choices this holiday season," Harris said. "Commercial fundraisers play a role in supporting charities in California, but it's important for donors to know how much of their money will be used to support the charity's programs, and how much will go to fundraising expenses."

Charities that hire fundraisers

Among numerous other tables, the annual report contains an alphabetical list of charities that hired commercial fundraisers in 2010 - along with the total revenue raised in those campaigns and the dollar amount and percentage of total funds raised that went to the charity.

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 the Attorney General'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 the Attorney General's office, commercial fundraisers collected $362.9 million in donations in 2010. On average, $161.1 million - or 44.38 percent of the funds raised - went to the charities. The remainder was retained by the commercial fundraisers as payment of fees and expenses.

When asked by a solicitor to make a donation, the American Institute of Philanthropy suggests consumers follow these steps:

• Ask the solicitor how a donation will be distributed.
• Ask what percentage of donations will be used to pay for fundraising expenses.
• Ask if the solicitor works for a commercial fundraiser and is being paid to solicit.
• Avoid cash donations.
• Avoid giving credit card information to a telephone solicitor or in response to a telephone solicitation.
• Learn about a charitable organization, its activities and its fundraising practices before giving.  

Oregon Attorney General John Kroger has filed a lawsuit alleging that the founder of two charities personally kept at least $690,000 of funds raised to help Oregonveterans and improperly used charitable donations to make unreported political contributions.

 “The Department of Justice is committed to cracking down on charities that misuse donations raised to benefit veterans, law enforcement and other worthy causes,” said Keith Dubanevich, Chief of Staff and Special Counsel to Attorney General Kroger. “Oregonians deserve absolute assurances that their generous charitable contributions are spent properly.”

The lawsuit was filed today in Marion County Circuit Court against Gregory Warnock and corporations he founded: the Oregon War Veterans Association (OWVA) and Military Family Support Foundation.

The suit alleges that Warnock falsely claimed that Military Family Support had been granted charitable status by the IRSand that donations to it were tax-deductible. In fact, the suit alleges, Military Family Support was little more than a corporate shell that Warnock used to solicit donations that he transferred to himself or entities under his control. 

Warnock also allegedly allowed OWVA to make unreported political contributions and represented that donors could claim a charitable tax deduction for contributions intended to be used for political purposes, which is contrary toOregon’s campaign finance laws, Internal Revenue Service regulations and OWVA’s status as a charitable, public-benefit corporation. 

The lawsuit seeks, among other things, an order shutting down OWVA and preventing Warnock from operating charities in the future.  Attorney General Kroger also is demanding that Warnock repay amounts he impropertly diverted so the funds can be distributed to charitable organizations that provide assistance to veterans.

The lawsuit is part of Attorney General Kroger’s ongoing initiative to crack down on non-profits and fundraisers that fraudulentlyclaim to help U.S.veterans.

Increasingly, consumers have to worry about being ripped off by so-called charities, not just shady businesses. States have begun stepping up their actions to warn and protect their citizens.

The State of Iowa has taken action against a Minnesota fundraiser it says was calling consumers in the state seeking donations for several law enforcement associations.

Iowa Attorney General Tom Miller says the firm used deceptive tactics to solicit the money, and has now agreed to make changes in how it deals with consumers.

Public Safety Council, LLP, and Community Safety, LLC, both headquartered in Minneapolis, their subcontractor, Safety Services, LLC, of St. Paul, and their principals, J. Michael Callan and Robert T. Callan, have entered into an agreement with the Attorney General, called an Assurance of Voluntary Compliance.

Miller says telephone solicitors, working from a call center in St. Paul, called Iowa consumers on behalf of at least three Iowa law enforcement associations.  Several calls, which were recorded by the Consumer Protection Division, reveal unfair and deceptive conduct, Miller alleges. 

The respondents deny wrongdoing or liability of any kind.  The respondents solicited Iowans on behalf of the following organizations:

IowaStatePolice Association (ISPA)

It sound like a worthy cause, right? But Miller says of the total amount solicited from Iowans in donations to the Iowa State Police Association (ISPA), fundraisers retain 84 perent, and only 16 percent actually goes to ISPA. 

Based on recorded calls, the Attorney General alleges that telephone fundraisers failed to identify themselves as paid professional fundraisers; insinuated that they were directly associated with ISPA or a law enforcement agency; falsely inflated the amount of donations benefiting ISPA, by implying that as much as 100 percent of a donation goes to ISPA; and misrepresented how often they call potential donors.

IowaStateReserve Law Officers Association (ISRLOA)

Of the total amount solicited from Iowans in donations to the Iowa State Reserve Law Officers Association (ISRLOA), fundraisers retain 85 percent, and only 15 percent actually goes to ISRLOA, Miller says.  Based on recorded calls, the Attorney General alleges that telephone fundraisers failed to identify themselves as paid professional fundraisers; insinuated that they were directly associated with ISRLOA or a law enforcement agency; falsely inflated the amount of donations benefiting ISRLOA, by claiming that as much as 100 percent of a donation goes to ISRLOA; and misrepresented the solicitors' location.

IowaPeace Officers Association (IAPO)

Again, Miller says this group - formerly known as the Iowa Association of Chiefs of Police and Peace Officers - got only 16 percent of the collected funds. Based on recorded calls, the Attorney General alleges that telephone fundraisers failed to identify themselves as paid professional fundraisers; insinuated that they were directly associated with IAPO or a law enforcement agency; falsely inflated the amount of donations benefiting IAPO, by claiming that as much as 60 percent of a donation goes to IAPO; misrepresented when the donor would receive another call; and misrepresented the solicitor's location.

'Oregon names 20 worst charities'

In Oregon, Attorney General John Kroger has assembled a list of what he calls the state's "20 worst charities" and is urging consumers to avoid them. 

"It is important that generous Oregonians make charitable contributions to legitimate organizations," Kroger said. "Many charities do great work, but some are little more than scams that do little to help the people they claim to support."

In addition to increasing consumer awareness, Kroger will ask the 2011 Legislature to pass a law making Oregon the first state in the country to use the tax code to fight charities that spend most of the money they raise on telemarketers and administration.

The proposal will eliminate the Oregon tax deduction for donations to charities that spend less than 30 percent of the money they raise on the people they claim to support.

"This proposal will help kick sham charities out of Oregon," Kroger said. "If the rest of the country follows Oregon's lead, we could end the rampant abuse of non-profit laws."

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 identified20 organizationsthat 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.

At the top of the list is Shiloh International Ministries, which claims to solicit money to provide medical necessities and moral support to needy children and to provide assistance to the homeless. According to the most recent financial filings, the California-based non-profit spent an average of $937,315 per year, 96.37 percent of which went to management and fundraising.

No. 2 on the list is Law Enforcement Education Program, which supposedly raises money to educate teenagers on the effects of alcohol. The Michigan-based non-profit spent just 6.26 percent of the annual average $1,893,929 it raised on charitable purposes.

The Korean War Veterans National Museum and Library was one of many groups on the list that says it raises money to help veterans. The Illinois-based group spent 96.97 percent of the annual average $2,265,809 it raised on telemarketing and administration.

Just hang up

How do you avoid being deceived by a charity fundraiser? One way is to simply hang up when you get these calls. It's much better to choose your own charity projects to support from within your local community, supporting organizations you know something about.

However, if you are someone who wants to consider all appeals, Miller offers these tips:

• Ask questions.  Be wary of claims that the caller is a charity worker or volunteer, that most of your donation goes to the cause, or that your donation will be used locally. 

• Don't let a sympathetic charity name fool you- some fundraisers exaggerate or fabricate their support for veterans or military families, law enforcement, fire fighters, victims of disease, and children's causes.

• Ask phone solicitors to send written information. Be suspicious if they insist on a pledge before they'll send you information. 

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

• Give directly to a known charity of your choice.

Bottom line: Keep giving generously, but give wisely!  Giving to a known charity you're confident about is often the best option.

'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.

"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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.