Tag: Attorney General

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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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AG Healey Reaches $6 Million Settlement With Former Head of Homeless Shelter for Lying to the State and Funneling Money to Himself

Manuel Duran Formerly of Casa Nueva Vida to Pay Nearly Treble Damages and is Banned from Working with the Shelter and the State

The former executive director of Casa Nueva Vida (CNV), a publicly-funded nonprofit homeless shelter with locations in Boston and Lawrence, will pay $6 million to settle allegations he abused his position to improperly funnel state money to himself, all while falsely certifying compliance with state regulations designed to detect such improper self-dealing, Attorney General Maura Healey announced today.

The consent judgment, filed and entered in Suffolk Superior Court on Wednesday, resolves a civil lawsuit filed by the AG’s Office – less than four months ago – in September against Manuel Duran, the former Executive Director, Chief Executive Officer, President and Board Member of CNV. The lawsuit alleged Duran violated the Massachusetts False Claims Act by making false statements and material omissions on documents submitted to the state in which he failed to disclose his related party transactions. According to the AG’s Office, Duran signed leases on CNV’s behalf for investment properties he owned, charged CNV substantially above fair rental value, and directed CNV to utilize funding it received from the state to pay for improvements to properties he owned.

“Manuel Duran abused his position of trust to pad his pockets with millions of dollars that should have gone to families in need,” AG Healey said. “Our office moved quickly to reach today’s settlement which holds him accountable for the harm done and returns nearly three times amount of money he stole from the state.”

Starting in March 2003, Duran served in various leadership roles at CNV that allowed him to control the shelter’s day-to-day operations, as well as its real estate investments and leases. The AG’s Office alleges that from fiscal year 2014 through 2019, when CNV was at least 92 percent state funded, Duran caused CNV to submit documents to the state that failed to disclose Duran’s own personal or business transactions with CNV, known as “related party transactions.” Under state law, CNV was required to disclose any related party transactions to assure the state that it was engaging in transactions on an arm’s length basis and was spending state funds in a fair and reasonably prudent manner. By not disclosing information regarding his related party transactions with CNV, Duran made it impossible for the state to evaluate CNV’s continued eligibility as a contractor and enabled CNV to receive $33 million in state funding under a contract with the Department of Housing and Community Development for emergency homeless shelter services.

The AG’s complaint alleged Duran funneled approximately $2.29 million in state funds to himself through his illegal actions, but because this case was brought under the state’s False Claims Act, which allows for up to treble damages, Duran will pay the state $6 million.

Under the terms of the AG’s settlement, in addition to the required $6 million payment, Duran is permanently banned from working with CNV; accepting any position as a fiduciary at any Massachusetts public charity; working on or with any business connected to the state or a state entity or any business that receives funding from the state; and from forming a separate entity or operating under a different name in order to violate the AG’s consent judgment.

In September, Duran was also criminally indicted by a Suffolk County Grand Jury in connection with stealing from CNV and lying under oath to hide his self-dealing. The AG’s criminal case against Duran is ongoing.

This civil case was handled by Assistant Attorney General Mary-Ellen Kennedy and former Special Assistant Attorney General Coleman Gay, with assistance from Assistant Attorney General Matt Douglass, Division Chief Amy Crafts, and Paralegal Cara Bradley, all of AG Healey’s False Claims Division, as well as Senior Investigator Marlee Greer and Edward Cherubin of the Civil Investigations Division.

The False Claims Division was created by AG Healey to safeguard public funds and promote integrity and accountability in public contracting. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600.

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Fraudulent Organizations Posing as Charitable Nonprofits Ordered Dissolved

Michigan Attorney General Dana Nessel along with the Michigan Department of Licensing and Regulatory Affairs (LARA) Director Orlene Hawks successfully obtained an order dissolving 10 fraudulent entities for failing to comply with state nonprofit and charity laws. The entities have names similar to those of legitimate nonprofits, like the American Cancer Society, American Cancer Foundation, United Way and the American Red Cross, but appear to serve no charitable or commercial purpose. 

Last year, the Department of Attorney General identified Ian Richard Hosang, Claudia Stephen, and Lincoln Palsey as involved with the fraudulent entities American Cancer Foundation (ACF) of Detroit, ACF of Grand Rapids, ACF of Lansing and ACF of Michigan; American Cancer Society (ACS) of Detroit and ACS of Michigan; American Red Cross (ARC) of Detroit and ARC of Michigan; United Way of Detroit and United Way of Michigan. 

In January 2020, LARA’s Corporations Division referred the ACS of Michigan and ACS of Detroit to the Attorney General’s office for potential dissolution proceedings after discovering the organizations were not part of the national entity. During that review, the Department of Attorney General discovered the other involved fraudulent entities. 

The Department of Attorney General found no evidence that any donations were made to these organizations. 

Last week, Ingham County Circuit Court Judge Clinton Canady III sided with the state in an order that:   

  • holds that the defendants engaged in fraud; 
  • permanently enjoins defendants from forming a Michigan Nonprofit Corporation or from seeking a Certificate of Authority to transact business in Michigan on behalf of a foreign nonprofit entity; 
  • permanently enjoins defendants from serving as an Officer, Director, or Resident Agent for a nonprofit corporation formed or transacting business in Michigan; and 
  • dissolves the 10 fraudulent entities identified in the complaint. 

“I’m pleased by this outcome, which goes to ensuring Michiganders looking to support important causes don’t have to worry about fraudulent entities that take advantage of generous individuals,” Nessel said. “We remain committed to protecting charitable interests in this great state and I encourage people to research charities through our website to determine legitimacy before donating.” 

The Department of Attorney General offers a search engine online that allows people to search for: 

  • a registered charity, public safety organization (police or fire group), or professional fundraiser by name, EIN, or Attorney General file number; and 
  • a list of charities by purpose, geographical area, or combination of factors. 

The Department of Attorney General also offers tips for evaluating a charity. 

“Thanks to the swift action of LARA’s Corporations Division in identifying these fraudulent charities and the successful intervention of the Attorney General’s office, no more Michigan citizens will be vulnerable to these individuals and organizations,” Hawks said. “Consumers should research any individual or organization thoroughly before giving a charitable organization their hard-earned money and promptly report suspected fraud to the Department of Attorney General’s Office.” 

These entities were all incorporated in Michigan in 2018 by Hosang, who is identified as the resident agent and incorporator. Stephen and Palsey were identified as officers and directors for some of the entities. However, neither Hosang nor the other defendants reside in Michigan; all have New York addresses.  

The entities themselves also appeared to have fraudulent information connected to them and no legitimate charitable or commercial purpose.  None of the entities were registered with the Attorney General’s Charitable Trust Division as required by law. They also were not registered as charitable organizations with the state, and had no physical office locations, no web presence, and no phone numbers.  

Moreover, none of the board members live in Michigan.   

LARA’s Corporations Division dissolved all 10 entities on June 25. Under the Michigan Nonprofit Corporation Act, consumers may determine if a business entity is on file with LARA’s Corporations Division or contacting the Corporations Division at (517) 241-6470 or via email. They may also obtain certificates of fact or certificates of good standing online.

Judge Canady’s order can be read in its entirety online. 

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Kansas charitable organization registration transfers to Office of the Attorney General

With the passage of legislation earlier this year, the filing requirement for charitable organizations, professional fundraisers and solicitors has transferred to the Office of the Attorney General.

For many years, the Kansas Charitable Organizations and Solicitations Act (KCOSA) has required most charitable organizations to register with the state prior to soliciting. Professional fund raisers and solicitors working for the charitable organization also must register. Earlier this year, House Bill 2079 transferred the program from the Kansas secretary of state to the attorney general. The change was effective May 27 and is now complete.

“This change places registration and enforcement in the same office and will make charity regulation more efficient and effective,” Kansas Attorney General Derek Schmidt said. 

In addition, the filling fee has been set at $25 for all registrations, which is a reduction for most. The new online portal for the registration program is https://www.ag.ks.gov/charities. At that site, charitable organizations, fundraisers and solicitors can find the necessary forms to register.  A copy of the KCOSA, applicable regulations and a list of frequently asked questions are also available for review.

Although administration of the program has been reformed, no substantive requirements for who must register and who is exempt have changed.

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Settlement Agreement Results in Funding for Community Foundation for Southeast Michigan, Area Charities

A settlement agreement the Michigan Department of Attorney General helped negotiate will result in more than a million dollars going to the Community Foundation for Southeast Michigan for distribution to local charities. 

Last year, the Department’s Public Administrator became aware of a 2008 special needs trust that originally provided, after the beneficiary’s death, reimbursement of any Medicaid expenditures and remaining assets for the benefit of charities. A subsequent trust amendment approved by the court provided that individuals would benefit to the detriment of the charities. Charitable Trust law provides the Attorney General with the obligation to oversee charitable assets.   

Therefore, the Department helped negotiate the settlement providing that the remaining funds in the Estate of Wendy M. Cope will again go to charities. In total, the Community Foundation for Southeast Michigan will receive $1.2 million. 

About $800,000 will fund the Wendy Marie Cope Memorial Fund, an endowed fund established to provide annual donations to four identified charities that helped Wendy Marie Cope when she was alive. 

The charities identified are:  

About 4.5% of the fund balance will be donated annually and if one of the identified charities is no longer operational, the annual contribution will be equally divided among the remaining charities.  

The settlement’s remaining $400,000 will go to the Foundation for the Wendy Marie Cope Fund, which has no annual limit on yearly donations for nonprofit organizations that serve individuals with intellectual and developmental disabilities in southeast Michigan.   Ms. Cope’s relatives will advise the Foundation regarding distributions of this fund. 

“Thanks to the foresight and generosity of Wendy Marie Cope’s family, charities that support individuals with intellectual and developmental disabilities will receive additional funding to further their important work,” Attorney General Dana Nessel said.