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Following the Invasion of Ukraine, Attorney General Bonta Issues Consumer Alert Warning Californians Against Fraudulent Charitable Solicitations

California Attorney General Bonta today warned Californians of fraudulent charitable solicitations that may claim to help the victims of Ukraine’s recent invasion. Well-intentioned or otherwise, the charities formed overnight as a response to this crisis may lack the experience, contacts, and staff needed to respond to a disaster. Fraudsters are always seeking to capitalize on people’s desire to help. Before aiding the victims of this crisis, Attorney General Bonta urges Californians to take their time to research before giving.

“The invasion of Ukraine is heartbreaking and unacceptable. I know that Californians, many with families and loved ones in the country, stand in solidarity with Ukraine and will be looking for any way to help its people,” said Attorney General Bonta. “However, before Californians do this, I urge them to take the necessary steps to research these charities so their contributions can go to legitimate causes. As Californians do their part to give to those in need in Ukraine, we will do our part to protect the integrity of those donations from deceptive solicitations. If you believe that a charity or fundraiser has acted in bad faith, please report it immediately at oag.ca.gov/charities/complaints.”

Donation Tips

  • Check the Registration Status: Charities operating in California and telemarketers soliciting donations in California are required to register with the Attorney General’s Registry of Charitable Trusts. They are also required to file annual financial reports, which are made available to the public. Prior to making a donation, make sure to confirm that the charity is registered and up-to-date with its financial reporting by searching the Attorney General’s Registry of Charitable Trusts’ database, located here.
  • Give to Organizations You Trust: Do your research before giving. Review the charity’s purpose and find out how the charity spends its donations. How much is spent directly on the charitable cause? How much goes to overhead and employee compensation? Research charities in your community and support those charities that make a positive impact. If you choose to donate to a charity you are unfamiliar with, contact the charity and ask for information in writing about its programs and finances. You should also confirm the charity’s name, address, and its nonprofit status. 
  • Be Wary of Social Network Fundraising: If you are planning to donate through a social network solicitation, first do some research. Find out what percentage is going to the charity, whether you will be charged a fee, or if a percentage of your donation will be paid to the platform website. 
  • Don’t Be Pressured by Telemarketers – Ask Questions Before Donating: If you receive a call from a telemarketer, ask for the name of the fundraising organization, whether it is registered with the Attorney General’s Office, the name of the charity benefitting from the solicitation, how much of your donation will go to charity and how much to the telemarketer, and the direct telephone number of the charity. If the telemarketer tells you the donation is for your local animal shelter, hospital, school, police, firefighter, or other public safety agency, check directly with the benefitting organization to confirm that it authorized the solicitation and will actually benefit from your donation. Don’t fall for pressure tactics or threats. Remember that you have the right to reject the donation appeal and if you feel pressured or threatened, just hang up.
  • Watch Out for Similar-Sounding Names, Web Addresses, and Other Deceptive Tactics: Fraudulent organizations may use names that closely resemble those of well-established charitable organizations in order to mislead donors. Look out for fraudulent websites that have a slightly different web address (URL) than that of a legitimate charitable organization. Similar-looking URLs are sometimes purchased by fraudsters to lure in would-be donors. These sites may ask you for personal information or install harmful material onto your device. Be skeptical if someone thanks you for a pledge you never made, and always check your records. 
  • Understand the Difference Between “Tax-Exempt” and “Tax-Deductible”: Being a nonprofit does not mean the organization is exempt from taxation, or that your donation is tax-deductible. Generally, a tax-exempt organization is exempt from paying tax on its income and gifts, but may or may not be able to offer a charitable tax deduction to donors for their contributions. Just because an organization has a “Tax ID Number” or provides donors with a receipt that says “keep this receipt for your records” does not mean that the organization is a charity, tax-exempt, or that your donation is tax-deductible. A few tax-exempt organizations – most notably those given 501(c)(3) tax-exempt status by the Internal Revenue Service (IRS) – are able to offer charitable tax deductions for your donations. If you are not sure whether your donation is tax-deductible, verify the charity’s tax-exempt status by using the tools and information located on the IRS website.
  • Consider the Costs of Gifts and Merchandise: Gifts that you receive from a charity in exchange for your donation cost money and generally, these expenses are paid from donated funds. The value of the goods and services that you receive for your donation is not tax-deductible. Some charities may sell merchandise online and claim that “100% of the proceeds” will benefit its charitable purpose. However, this does not necessarily mean that 100% of the sales price of the merchandise will go to charity, and the cost of the merchandise itself can greatly reduce the value of your donation.
  • Protect Your Identity: Never give your Social Security number or other personal information in response to a charitable solicitation. Never give out credit card information to an organization unfamiliar to you. Some organizations sell or rent their donor lists to other organizations, including organizations that are not charities. Review the charity’s privacy policy to find out if your information will be shared with outside companies.
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NASCO Drafts Letter to FTC Regarding Impersonation Scams

On March 22, 2022 the NASCO Board responded to the FTC’s Advance Notice of Proposed Rulemaking (“ANPR”) by submitting the NASCO letter .  The FTC has stated that their ANPR is to combat government and business impersonation fraud and is intended to allow the FTC to seek strong relief for consumers in cases involving imposter scams.  The NASCO letter specifically requests that the FTC consider impersonation of charitable organizations and causes in its rulemaking.

https://www.nasconet.org/wp-content/uploads/2022/02/NASCO-Letter-to-FTC-2022-02-22-002.pdf

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Attorney General James Sues Couple
for Embezzling $1 Million in Charity Funds

Former H.O.M.E. Inc, Executive Director Shirley Goddard
and Her Husband Diverted Nearly $1 Million Over 6 Years

New York Attorney General Letitia James today continued her efforts to combat fraud in charitable organizations by filing a civil complaint against Shirley Goddard, the former executive director and Board Chair of the Humanitarian Organization for Multicultural Experiences, Inc. (H.O.M.E.) and her husband Tyrone Goddard. Between 2012 and 2018, Mrs. Goddard improperly diverted or misused nearly a million dollars in H.O.M.E.’s charitable assets for her personal gain. Mr. Goddard, the former board chair, was aware of and helped to conceal his wife’s unlawful conduct. The money that the Goddards stole hindered H.O.M.E.’s ability to fulfill its mission to provide critical services to individuals with developmental disabilities in the Syracuse area.

Today’s complaint seeks restitution of the funds that were diverted from H.O.M.E., as well as a permanent bar on any fiduciary role for Shirley or Tyrone Goddard in any New York charitable organization.

“Stealing funds that are used to help developmentally disabled individuals is cruel and goes against everything that we stand for as New Yorkers,” said Attorney General James. “Our communities have faith that our charities will help them through their struggles, and our charities must be stable, honest, and ethical in order to do so. Today’s lawsuit demonstrates my commitment to pursue wrongdoers who take advantage of charities and the vulnerable communities they serve.”

In May 2018, the New York State Office for People With Developmental Disabilities (OPWDD) referred the matter to the Office of the Attorney General (OAG) when an audit uncovered financial improprieties and suspected theft of funds from H.O.M.E. The OAG’s subsequent investigation found that over the course of 6 years, Mrs. Goddard falsified loans to clients, manipulated expense reimbursements, and took overpayments of her salary. Through unauthorized phone transfers, cash withdrawals, and ATM transactions, she embezzled hundreds of thousands of dollars. Mr. Goddard became aware of his wife’s theft by 2013, and rather than take action to stop the misconduct, he assisted in his wife’s effort to conceal the embezzlement.

To account for the financial inconsistencies, the Complaint alleges that the Goddards falsely claimed that funds missing from H.O.M.E.’s accounts were due to errors by H.O.M.E.’s bank — Bank of America — which they claimed was investigating the matter over a period of years. The couple would periodically make payments back into the H.O.M.E. accounts which bolstered the “bank error” story by making it appear that the bank was correcting the errors. The Complaint also alleges that Mrs. Goddard created fake letters from the bank that claimed to support the bank error investigation, and that she falsified bank statements and provided them to OPWDD. The Goddards further deceived the H.O.M.E. Board and the organization’s outside auditors by advising that they had visited the bank to address the problem and the bank would be repaying the missing funds.

At around November 2018, H.O.M.E. terminated Mrs. Goddard as executive director. Mr. Goddard, who was a chairman of the H.O.M.E  Board, resigned at the same time.

Today’s complaint seeks full restitution of the charitable assets that were diverted from H.O.M.E. as a result of the Goddards’ actions. The amount of restitution will be determined at trial and is currently estimated to be between $650,000 and approximately $900,000. To protect the integrity of New York charities, Attorney General James is also seeking a permanent bar prohibiting the Goddards from holding any fiduciary role in a charitable or nonprofit organization operating in New York.

A complaint is merely an accusation; the defendants have the right to contest the allegations of a complaint at a civil trial, and the attorney general has the burden of proving each of these allegations at trial by the preponderance of the evidence.  

This matter was handled by Assistant Attorney General Sharon Sash with the assistance of Associate Accountant Darren Beauchamp under the supervision of Emily Stern, Co-Chief of Charities Enforcement and James Sheehan, Chief of the Charities Bureau. The Charities Bureau is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux, and is overseen by First Deputy Attorney General Jennifer Levy.

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Attorney General James Delivers Over $640,000
to New York Breast Cancer Organizations

Funds Derived from Fraudulent Charities and
Fundraising Network Shut Down by AG’s Office

New York Attorney General Letitia James today delivered more than $640,000 to five nonprofit organizations that are leading the fight against breast cancer. The funds were recovered by the Office of the Attorney General (OAG) from organizations and individuals who defrauded New Yorkers into making donations that went into the pockets of telemarketers. The OAG recovered the funds from the Breast Cancer Survivors Foundation, Inc. (BCSF), a sham organization, and Garrett Morgan, a telemarketer who misled donors into contributing to a sham breast cancer organization on Long Island. The $644,054.79 in restitution was distributed to the American Cancer Society, Living Beyond Breast Cancer, West Islip Breast Cancer Coalition, Babylon Breast Cancer Coalition, and Manhasset Women’s Coalition Against Breast Cancer.

“It is unconscionable that organizations and telemarketers preyed on the public’s generosity and deprived breast cancer patients of vital support during a time of tremendous physical, mental, and emotional distress,” said Attorney General James. “Today, I am honored to return these funds to the people and organizations that need them most. My office is proud to be a partner to these five incredible organizations and help them in supporting breast cancer patients and survivors throughout their journey.”

In 2017, OAG announced an agreement with BCSF and its president and founder. The BCSF posed in phone and mail solicitations as a medical center for breast cancer patients, when in reality it was a shell organization funneling donations to an outside fundraiser, which pocketed 92 cents of every dollar donated to BCSF. The OAG’s agreement required BCSF to shut down immediately and pay more than $300,000 in restitution, the last of which was received by OAG in 2021. The OAG also obtained $40,000 from BCSF’s auditors, McEnerney, Brady & Company LLC and Edmund Brady.

In 2013, OAG won a judgment against Garrett Morgan for fraud in raising funds for the Coalition Against Breast Cancer, a sham Long Island organization. The organization raised millions of dollars with solicitations that claimed there was a “mammography fund,” when there was none, and that donations would provide free mammograms to uninsured women. Morgan did not pay the judgment and, acting on a motion by OAG, the court appointed a receiver to collect or sell Morgan’s property to satisfy the judgment. In 2021, the receiver delivered $303,747.86 to OAG.

The OAG’s Charities Bureau selected five nonprofit organizations to receive the restitution funds, including:

The American Cancer Society ($314,054.79): The American Cancer Society will use the award to support an initiative that increases breast cancer screening in high poverty areas, including screening among women who have never been screened before or who are not up to date with screening. The initiative focuses on uninsured and underinsured women by partnering with community health centers. With funds from OAG, the American Cancer Society will launch a new cohort of community health centers to participate in the mammogram initiative.

“The American Cancer Society is committed to expanding access to care for all and removing barriers that prevent cancer patients from getting the care and treatment they need,” said Dr. Karen Knudsen, CEO, American Cancer Society. “The pandemic brought about dramatic declines in breast cancer screenings. We are grateful that funds from the New York Attorney General’s Office will expand our lifesaving initiative to increase cancer screening rates and ultimately save lives.”

Living Beyond Breast Cancer ($225,000): Living Beyond Breast Cancer, a national nonprofit organization, will use the award to support its Living Beyond Breast Cancer Fund, which provides one-time grants to help those on limited incomes manage the financial burden of breast cancer. Grants range from $500 to $1,000 and are for living expenses. Grants are paid directly to vendors or billers. Recipients of the one-time grants must be in active treatment for breast cancer or living with metastatic breast cancer, and have a household income under 400 percent of the U.S. federal poverty line.

“We are honored to have been selected by the New York Attorney General’s Office,” said Jean Sachs, CEO, Living Beyond Breast Cancer. “Living Beyond Breast Cancer was founded over 30 years ago to offer trusted information and a community of support for all people directly impacted by breast cancer. We annually serve over 600,000 people across the country. A critical program of ours is the Living Beyond Breast Cancer Fund, a financial assistance program that pays the bills for women in treatment for basic needs such as rent, utilities, and transportation. Since 2006, we have been able to disburse over 3,150 grants for an approximate total of $2,530,000 to women and their families. Since the pandemic began, we have doubled the number of grants available to give to recipients as a way to alleviate financial hardship faced by so many across the country. The funds provided by the New York Attorney General’s Office will allow us to continue this intensive support, and help women in treatment focus on their health and not on their bills.” 

West Islip Breast Cancer Coalition on Long Island ($30,000): West Islip Breast Cancer Coalition of Long Island, Inc., will use the award to provide patients undergoing breast cancer treatment with services such as transportation, meals, childcare, house cleaning, wigs, advice, and support from former cancer patients.

“The West Islip Breast Cancer Coalition for Long Island, Inc. is extremely grateful to the Attorney General’s Office and its commitment to overseeing that funds raised to help women with breast cancer go to legitimate organizations that provide services to the many women on Long Island going through chemotherapy and radiation,” said Margaret Campise, president, West Islip Breast Cancer Coalition. “This award will ensure that many Long Island women will be taken care of through our ‘Lend A Helping Hand’ program, which offers free services like house cleaning, transportation to treatments, co-payments, wigs, prosthesis, and post-operative care. On behalf of the many women going through breast cancer, and the West Islip Breast Cancer Coalition for Long Island, I want to thank the Attorney General’s Office.”

Babylon Breast Cancer Coalition ($35,000): Babylon Breast Cancer Coalition, Inc., will use the award to provide an array of services to patients undergoing treatment for breast cancer and gynecological cancers, including transportation to medical appointments, housekeeping, meals, and childcare as needed during treatment.

“About 1 in 8 U.S. women (13 percent) will develop invasive breast cancer over the course of a lifetime and when that happens a woman’s life, and the lives of those who love her, are thrown into turmoil as she undergoes a horrific treatment ordeal,” said Nick Radesca, volunteer & vice president of finance, Babylon Breast Cancer Coalition. “Because most people’s lives have been impacted by this disease, many willingly donate to breast cancer charities. I want to thank the New York State Attorney General’s Office for bringing unscrupulous individuals to justice and redistributing defrauded donors’ funds to legitimate organizations. Babylon Breast Cancer Coalition, Inc. will use its share to provide free support services such as transportation to and from medical appointments, housecleaning, financial assistance, childcare, meal preparation, and other needed services.”

Manhasset Women’s Coalition Against Breast Cancer ($40,000): Manhasset Women’s Coalition Against Breast Cancer, Inc., will use the award to support its outreach program, which provides services to patients in the form of transportation, childcare, house cleaning, wigs, and non-financial support including advice and general emotional support of other former patients.

“The Manhasset Women’s Coalition Against Breast Cancer congratulates the Office of the New York Attorney General’s Charities Bureau for their efforts in pursuing the shutdown of the Coalition Against Breast Cancer and the Breast Cancer Survivor’s Foundation, both fraudulent organizations,” said Lynn Minutillo, member of board of directors, Manhasset Women’s Coalition Against Breast Cancer. “The MWCABC is so very grateful to be designated as a recipient of funds secured in the settlements of these cases. The women with breast cancer with whom we engage will be better served financially, emotionally, and educationally. Be assured we will strive to be conscientious stewards of the funds entrusted to us.”

The recovered funds distributed today are part of OAG’s Operation Bottomfeeder, which is an initiative of the Charities Bureau to identify fraudulent charities and their fundraisers. This is done through an analysis of annual financial reports, fundraising contracts, and other documents that nonprofit corporations file with the Charities Bureau, and has allowed OAG to take appropriate enforcement action against those engaging in fraud. In 2020, as a part of Operation Bottomfeeder, Attorney General James announced a multi-agency agreement imposing a nationwide, permanent, ban on Outreach Calling, a for-profit fundraiser, from charitable fundraising. To date, Operation Bottomfeeder has recovered approximately $1.7 million from sham charities and their fundraisers and has redistributed that money to legitimate charities.

This matter was handled by Enforcement Section Co-Chief Yael Fuchs and Assistant Attorneys General Peggy Farber, William Wang, and Sharon Sash under the supervision of Charities Bureau Chief James Sheehan and Deputy Bureau Chief Karin Kunstler-Goldman. The Charities Bureau is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.

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Ohio #FreedomConvoy Donors Encouraged to Contact Attorney General Yost

Ohio Attorney General Dave Yost wants to hear from Ohioans impacted by GoFundMe’s initial decision to refund or redirect donations given to demonstrators protesting COVID-19 restrictions in Canada.  

“It is deeply troubling that a professional fundraiser holding donations in trust would think they have the right to unilaterally redistribute donations,” Yost said. “If you’re an Ohioan that donated to the #FreedomConvoy through GoFundMe, I want to hear from you.”

On Friday, the crowdfunding site GoFundMe announced it would redirect donations raised for demonstrators protesting COVID-19 measures in Canada, after the organization determined that the efforts had violated the site’s terms of service due to unlawful activity. The fund had grown to around $10 million Canadian dollars or $7.8 million U.S. dollars.

“GoFundMe is bowing to public outrage by not directly distributing funds as they were intended,” Yost said. “I want to verify that GoFundMe isn’t playing God with other people’s money.”

GoFundMe has now reversed its earlier course and announced it will refund every dime of this fundraising drive automatically, without demand, thereby eliminating the possibility of “redirecting” donations with the consent of the donor.

“While that is a welcomed move, I am still interested in collecting information to make sure such things do not happen in the future,” Yost said. “Ohioans rely on their platform to do good, and their intentions and hopes should be honored.”

The Attorney General directed the agency’s Consumer Protection team to review GoFundMe’s terms of service to assess compliance with Ohio law. Consumers who donated to the cause should contact the Ohio Attorney General’s Office by filing a consumer complaint online or by calling 800-282-0515.The Ohio Attorney General’s Consumer Protection Section protects Ohioans from predatory and illegal business practices. The section enforces laws that prohibit unfair and deceptive practices including but not limited to: false advertising, shoddy workmanship, and failure to perform services or to deliver goods.