Latest News

Posted on

Attorney General Ellison restructures charity and replaces its leadership following more than $2 million in self-dealing transactions

Minnesota Attorney General Keith Ellison announced today that his Office has replaced the leadership and overhauled the governance of the Minnesota nonprofit BFW Institute of Education & Research (“BFW”), also known as Pain Free Patriots, in a settlement agreement filed in Ramsey County District Court. BFW allegedly violated Minnesota law when its leadership directed that its charitable grantees seek pain relief only at insider-owned businesses, made grants of more than $2 million to those insider-owned entities over a period of four years, and turned a blind eye to hundreds of thousands of dollars in debt that BFW’s founder, Douglas V. Huseby, directed BFW to take from and make payable to him and his affiliated entities. 

“Nonprofits that serve our military servicemembers are entrusted with not only charitable dollars but the public’s trust and commitment to do the right thing.  Any nonprofit’s money should be used exclusively to further its charitable mission, and not to line the pockets of its insiders while doing so,” Attorney General Ellison said.  “Under its prior leadership, BFW breached its duties and that public trust by letting conflicts of interest run rampant, and its board of directors failed to recognize and prevent these abuses from occurring.  I am optimistic about BFW’s future under its new leadership, however, and thank them for working with our Office to put controls in place to protect the organization and its charitable mission going forward.” 

BFW issues grants for pain-relief care to veterans, first responders, law enforcement personnel, and their family members. The court order that the Attorney General’s Office filed today alleges that, under prior leadership, BFW approved only its related pain-relief provider, Ultimate Wellness Center (“UWC”) for grantees to seek care.  BFW’s relationship with UWC — which is wholly owned by BFW’s founder — had never been competitively evaluated, appropriately documented, or negotiated at arm’s length.  

BFW’s structural issues also contributed to unchecked conflicted decision-making. These conflicts took several forms, including:  

  • Four of BFW’s five directors had a financial interest in or were otherwise affiliated with UWC or in the two entities subcontracted to provide patient care at the clinic. 
  • None of BFW’s “approved provider” relationships, financial transactions, or other conflicted director arrangements were disclosed to or discussed by the Board of Directors when it entered into transactions, renewed agreements, or elected directors to the Board. 
  • Save for one, none of BFW’s board members signed required annual statements disclosing potential conflicts. 
  • BFW gave its founder and its Treasurer the authority to borrow money on behalf of the corporation and did not require the Board to approve loans—even those taken from BFW’s founder. 

As a result, BFW became heavily indebted to its founder and his related entities. BFW started borrowing money from its founder and his businesses as far back as FYE 2012, when it owed $88k. As of FYE 2020, BFW owed $712k to its founder individually and $1k to one of his businesses. The loans were not board-approved, had no written agreement, and some were not disclosed on BFW’s tax returns as insider loans. The loans were ostensibly taken out to fund veteran care, but grantee checks were to be redeemed only at insiders’ for-profit care providers. From 2016 through 2019, BFW made $2,020,607 in grants for care that were to be redeemed at those insider-owned providers. 

In this court order filed today, BFW agrees to secure the wholesale replacement of its board of directors and officers, including permanent separation from the organization of BFW’s founder, Douglas V. Huseby. The new BFW board will undertake formal reviews of the debts owed to its founder and determine all claims and remedies BFW may have arising out of the Attorney General’s allegations. BFW will also implement a series of governance reviews and changes, including adopting a written policy requiring competitive arm’s-length bidding for services, and take other steps to prevent these same types of abuses from happening again. 

A copy of the settlement is available on the Attorney General’s website. 

In Minnesota, boards of directors and executives owe fiduciary duties to act in the best interests of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests. The Attorney General’s Office has additional information about these fiduciary duties, as well as other resources to help nonprofit leaders properly serve their organizations, on its web site at www.ag.state.mn.us/Charity/InfoNonProfits.asp. To review this information — or to file a complaint about a nonprofit — contact the Attorney General’s Office by calling 800-657-3787 (Greater Minnesota) or (651) 296-3353 (Metro area) or submitting an online complaint through the Attorney General’s website at www.ag.state.mn.us/Office/Complaint.asp.

Tips before donating to charities claiming to help veterans: 

  • Do your homework first.  Investigate how a charity actually uses donations that it receives. People can research this information using the “Search for Charities” tab of Attorney General’s website, www.ag.state.mn.us, or by calling the Attorney General’s Office at (651) 296-3353 or (800) 657-3787. 
  • Be wary of high-pressure tactics. Don’t feel pressured to donate on the spot just because a charity claims to have an urgent need. This should be especially true if the person asking for money contacts you through unrequested telemarketing calls or mail solicitations. Reputable charities will happily accept your donation when you are ready to give. 
Posted on

Attorney General Moody and Governor DeSantis Secure $5 Million Following Action Against FCADV and Former CEO Tiffany Carr

Attorney General Ashley Moody and Governor Ron DeSantis today announced a global settlement agreement requiring the Florida Coalition Against Domestic Violence and former FCADV CEO Tiffany Carr to repay the state and domestic violence centers millions of dollars. The settlement follows legal action taken by Attorney General Moody and by the Florida Department of Children and Families in March 2020 to preserve FCADV assets and recover misused state grant funds paid to Carr as excessive compensation. The agreement, which remains subject to court approval, resolves multiple pending civil actions but has no bearing on the ability of law enforcement to bring criminal charges associated with the misuse of taxpayer and charitable funds. Additionally, under the settlement agreement, all parties agree to a judicial dissolution of FCADV—establishing a process to liquidate and dissolve the organization.

Attorney General Ashley Moody said, “For several years, FCADV and Tiffany Carr concocted to pay herself an excessive compensation scheme, millions of dollars meant to benefit domestic violence victims. When uncovered, this scheme threatened to disrupt funding to domestic violence centers. I am pleased that through these actions, we succeeded in getting rid of the bad management, dismantling the organization, implementing a new system to serve victims of domestic violence and recouping millions of misappropriated funds.

“Nonprofit officers and directors who administer taxpayer funds take note: you have a heightened responsibility to use that money prudently. Today is a positive step towards restoring faith in the system and returning funds to the rightful recipients—ensuring domestic violence survivors receive the services and help they need to heal in a safe and secure environment.”

Governor Ron DeSantis said, “Today’s settlement is a win in our fight to recover money that was intended to help families rebuild after facing domestic violence. This organization acted in greed, abusing state dollars meant to serve families during their most vulnerable times. I am thankful this injustice was righted today with the return of this money.”

DCF Secretary Shevaun Harris said, “Florida taxpayers deserve full accountability and transparency. The FCADV was deceptive with state funds, and I thank Governor DeSantis and the Florida Legislature for the justice served today. We will continue working to ensure survivors receive the care and support they need while remaining transparent with the Legislature and taxpayers.”

Following a series of news reports and a Florida House investigation that uncovered millions of dollars in grossly excessive compensation paid to Carr, Attorney General Moody took legal action against FCADV and Carr for the misappropriation of public funds and private donations. In response to Attorney General Moody’s motion, the court appointed a receiver over FCADV and its foundation to control their assets and property. DCF and the court-appointed receiver also filed actions against FCADV’s officers and directors. The settlement resolves five pending lawsuits brought by the Florida Attorney General’s Office, DCF, the court appointed receiver, Mark Healy, and Hanover, one of FCADV insurers.

Through the settlement, former FCADV officers and directors will pay more than $3.9 million to DCF and the receiver—including a more than $2 million payment by Carr. Per the settlement agreement, former FCADV officers Patricia Duarte and Sandra Barnett will pay a total of $60,000. FCADV insurers will pay the remaining funds from the $3.9 million payment, totaling more than $1.7 million. Additionally, more than $1 million currently in accounts of FCADV’s foundation will go directly to domestic violence centers across the state.

The dissolution of FCADV will include a claims process for creditors, overseen by the receiver and court. The process will establish a claims priority, giving DCF priority as a creditor with an allowed claim of more than $2.8 million. There is a possibility of additional recovery by DCF through the liquidation of FCADV’s assets and the sale of property and will be applied to the judgment balance.

Additionally, FCADV will stipulate to a judgment for more than $6 million, with the $3.9 million settlement funds to be applied to the judgment balance.

Under the settlement agreement, eight non-party state agencies agreed to provide releases to the directors and officers to facilitate the agreement. In addition to the Florida Office of the Attorney General and DCF, the Florida Department of Agriculture and Consumer Services, Florida Department of Economic Opportunity, Florida Department of Education, Florida Department of Elder Affairs, Florida Department of Emergency Management, Florida Department of Financial Services, Florida Department of Health and Florida Department of Revenue each provided releases.

Posted on

Following Tropical Storm Henri, Connecticut State Officials Warn Consumers and Families to be Wary of Clean Up and Disaster Relief Scams

n the aftermath of Tropical Storm Henri, Attorney General William Tong and Connecticut Department of Consumer Protection Commissioner Michelle Seagull are warning consumers and families to be aware of disaster relief and clean up scams.

Tropical Storm Henri brough strong winds and heavy rain to Connecticut that knocked out power and damaged homes and personal property. Storm damage often requires consumers and business owners to make expensive repairs quickly – making them vulnerable to scam artists.

After past significant storms and weather events, Connecticut residents have reported individuals, some claiming to work for utility companies, going door to door offering to reconnect electric power, repair roofs, remove trees or do other work in exchange for cash. The utility companies, and their authorized contractors, always carry identification and none will ask for payments from consumers. Be wary of any other contractor who is either going door to door, or who contacts you offering a service during this time. Consumers should make sure any contractors they work with are licensed and insured and by law all home improvement projects must have a contract.

“Some of us may be dealing with downed trees, power outages or damaged property in the wake of Tropical Storm Henri and it can be very tempting to take someone’s offer to fix the problem quickly,” Attorney General Tong said. “When these extreme weather events hit, bad actors see an opportunity to prey on people who are suffering and desperate for solutions and will offer fraudulent home repair services, jobs or pose as charities collecting money for victims. Always verify the legitimacy of a contractor or business offering to do work for you and don’t fall victim to their tactics — if it sounds too good to be true, it’s probably a scam.”

“Particularly when it comes to clean-up and repair issues after a big storm, we remind and encourage consumers to do their research prior to hiring someone for a job,” said DCP Commissioner Michelle H. Seagull. “Avoid doing business with someone who requires that you pay in cash, by wire transfer, or in any form of untraceable payment; refuses to offer you a contract in writing, which is required by law in Connecticut; offers you an incredibly low cost for work that needs to be completed, under the condition that you commit immediately; knocks on your door or otherwise solicits business specifically from you instead of you going to them; and will not provide references or proof of their credentials. Finally, you should always check elicense.ct.gov to verify a contractor’s credentials before hiring them for repair work on your home.”

Here are the most common weather and disaster related scams:

  • Clean-up and repair scams: Scammers often offer clean-up or repair services at a low price, and without a contract. By law, home improvement projects must have a contract. Consumers should research potential contractors before making a decision, ask for credential information, identification, proof of insurance, and make sure there is a written signed contract detailing the work that will be done. You can verify credentials by visiting http://www.elicense.ct.gov.
  • Charity scams: In the aftermath of large natural disasters you may want to donate money to support the recovery process. Scammers take advantage good intentions by creating fake charities and advertising them to potential donors. Always research a charity before giving by visiting sites like www.CharityNavigator.org, www.GuideStar.org, or www.give.org, and ask questions about how your donation will be used. If someone uses high-pressure tactics to convince you to give, it’s probably a scam. Any charity soliciting in the State of Connecticut must be registered with DCP.
  • Job scams: Natural disasters sometimes cause unemployment, creating an opportunity for job scams. These scammers can be very convincing and often advertise on legitimate platforms. Remember that you should never have to pay to apply for a job, or to start a job – and if a job posting guarantees employment, you should be suspicious.
  • Used car scams: During hurricanes and severe storms, vehicles can be destroyed or have severe water damage. Scammers may try to cover up this damage and sell these cars out of state. Be wary of buying used cars after natural disasters, and always do a thorough inspection and ask for the cars history.

To report a scam or instance of fraud, contact the Office of the Attorney General at 860-808-5318 or file a complaint with the office at https://www.dir.ct.gov/ag/complaint/. Or visit www.ct.gov/DCP/complaint or the Better Business Bureau’s Scamtracker at www.bbb.org/scamtracker.

Posted on

Carr Announces Indictment of 14 Defendants in Cherokee on Charges of Human Trafficking, Racketeering, Gang Activity, Charity Fraud, and Money Laundering

Attorney General Chris Carr today announced the indictment of 14 defendants on 15 charges of Human Trafficking, Racketeering, Criminal Street Gang Activity, Charity Fraud, and Money Laundering.

“We will charge gang members who try to exploit our children in order to further their criminal enterprise,” said Attorney General Chris Carr. “We will not tolerate it, and we look forward to presenting our case in court.”

The Office of the Attorney General is alleging that the defendants in this case operated a labor-intensive human trafficking ring under the guise of a fraudulent charity known as Georgia Peach Youth Club of America Inc. in order to fund criminal street gang activity. The alleged criminal enterprise connected with these crimes is the Nine Trey Bloods – a subset of the United Blood Nation which is a well-known criminal street gang out of Los Angeles.

Attorney General Carr’s Prosecution Division presented evidence to a Cherokee County grand jury, resulting in the indictment of fourteen Defendants* on Monday, August 9, 2021. Specifically, the indictment charges the defendants with the following which, if convicted, can carry the respective penalties:

  • JAMAINNE CHARLES HALL – Racketeering, 4 Counts of Human Trafficking, 4 counts of Violation of Street Gang Terrorism and Prevention Act, 5 Counts of Money Laundering, 1 Count of Charity Fraud – 186 years
  • MIGUEL J. BAEZ, – Racketeering, 4 Counts of Human Trafficking, 4 counts of Violation of Street Gang Terrorism and Prevention Act, 5 Counts of Money Laundering, 1 Count of Charity Fraud – 186 years
  • JULE W. HUSTON, – Racketeering, 4 Counts of Human Trafficking, 5 Counts of Money Laundering, 1 Count of Charity Fraud – 126 years
  • RONALD JOHN CROWE, – Racketeering, 4 Counts of Human Trafficking, 5 Counts of Money Laundering, 1 Count of Charity Fraud – 126 years
  • ROBERT PETER BLACKWOOD, – Racketeering, 4 Counts of Human Trafficking, 4 counts of Violation of Street Gang Terrorism and Prevention Act, 1 Count of Charity Fraud – 161 years
  • ROMAINE MATTHEW ROBERTS, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • KAVON KEITH THOMPSON, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • KIYA A. JEFFERSON, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • DOMINIQUE PROVOST, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • KIVA VIOLA CLARKE, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • ISAIAH RUBEN CORDERO, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • NATHAN JAMES JACKSON, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • RAHEEM ICARUS POPLEY CARVEY, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years
  • AARON YUSEF ABDULLAH, – Racketeering, 4 Counts of Human Trafficking, 1 Count of Charity Fraud – 101 years

The Georgia Bureau of Investigation (GBI) is the lead investigative agency on this case. The Georgia Secretary of State’s Office – through the Charities Division – made the initial referral and assisted in this investigation.

“Top priorities for the GBI are to conduct criminal street gang, human trafficking, and crimes against children investigations,” said Georgia Bureau of Investigation Director Vic Reynolds. “This case is an example of our commitment to working with the Georgia Attorney General’s Office to conduct cases that lead to successful prosecutions.”

The indictment is attached, and no further information about the investigation or about the defendant’s alleged crimes other than that stated in the indictment may be released at this time.

Posted on

Grand Jury indicts Boys and Girls Clubs of Myrtle Beach former director for embezzling more than $100,000

South Carolina Attorney General Alan Wilson announced that an Horry County Grand Jury has indicted Dione Eban Buonto, the former Executive Director of the Boys and Girls Clubs of Myrtle Beach, for allegedly embezzling more than $100,000 from the organization. She’s charged with six counts of Breach of Trust with Fraudulent Intent.

The indictments allege that Buonto used money from the Boys and Girls Clubs to pay for personal items, including hair and beauty products, home décor, moving expenses, tuition and books for her son, and personal travel including airfare, lodging, car rentals, and meals for herself, her daughter, her son, a male acquaintance and his mother. She also allegedly issued bonus checks to herself without Board approval. The alleged embezzlement occurred between December 2014 and January 2020.

She was indicted on three counts of Breach of Trust with Fraudulent Intent in excess of $10,000, a felony punishable by up to 10 years in prison and a fine at the discretion of the court. She was also indicted on three counts of Breach of Trust with Fraudulent Intent in excess of $2,000, which is a felony punishable by up to five years in prison and a fine at the discretion of the court.

The case was investigated by the State Law Enforcement Division with the help of the Myrtle Beach Police Department. It will be be prosecuted by the Attorney General’s Office.

Attorney General Wilson stresses that all defendants are presumed innocent unless and until they are convicted in a court of law.