Tag: California

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Attorney General Bonta and Assemblymember Irwin’s Legislation to Provide Oversight of Online Charitable Fundraising Platforms Signed into Law

California Attorney General Rob Bonta and Assemblymember Jacqui Irwin today applauded Governor Gavin Newsom for signing legislation that will provide critical oversight of charitable fundraising on internet platforms. The bill, sponsored by Attorney General Bonta and authored by Assemblymember Irwin, authorizes the California Department of Justice to exercise supervision over charitable fundraising occurring on internet platforms to protect donors and charities from deceptive or misleading solicitations. The bill will go into effect on January 1, 2023, with additional regulatory rulemaking beginning January 1, 2022. 

“In the midst of a record-breaking wildfire season and a global pandemic, Californians have opened their hearts and their wallets to charities across the state, the nation, and the world,” said Attorney General Rob Bonta.“As charitable fundraising moves increasingly online, AB 488 will provide my office with the ability to properly supervise third-party internet platforms and safeguard the proper treatment of Californians’ donations. I’m proud to have worked with Assemblymember Irwin to get this important legislation signed into law.” 

“After years of effort I am elated to have Governor Newsom’s signature on AB 488. Online charitable giving is the present and the future of fundraising for California non-profits. Ensuring the donations of Californians are received quickly and by the correct charities is common sense, and with this new law the Attorney General will be able to crack down on fraudulent actors that prey on people’s best intentions” said Assemblymember Irwin. “I would like to thank the dozens of stakeholders who contributed to this legislation over the past several years. The world of online fundraising is rich with various methods and models to encourage giving. Without the insight of these charitable fundraising platforms during the legislative process we would not have the effective and efficient law we achieved today.” 

“This new law will increase donor confidence in online charitable giving and help ensure that nonprofits receive online donations in a timely way,” said Jan Masaoka, CEO of the California Association of Nonprofits. “We thank the Attorney General for sponsoring AB 488, Assemblymember Irwin for championing it, and Governor Newsom for signing it.” 

The California Department of Justice is responsible for regulatory supervision of charities, trustees, commercial fundraisers, and other legal entities that hold or solicit donations for charitable purposes. In recent years, charitable fundraising on internet platforms has grown exponentially, altering the landscape of charitable giving beyond what current law contemplated. Internet companies have developed methods for individuals to donate to charities through websites and phone applications that serve as “charitable fundraising platforms.” As currently written, California’s solicitation laws do not specifically reach these online platforms, resulting in instances of deceit and mistreatment of charitable donations that the Attorney General’s Office is not able to address through enforcement of existing charity oversight laws. 

AB 488 will: 

  • Create a level playing field for all charitable giving platforms, regardless of business model, by defining two new groups of entities, “charitable fundraising platforms” and “platform charities” that are subject to the Attorney General’s supervision;
  • Require covered entities to provide meaningful and transparent disclosures on their internet platforms, promptly distribute donations, and prohibit solicitations for charities not in good standing with the Attorney General’s Registry of Charitable Trusts;
  • Permit some instances of soliciting for a charity without prior consent if certain criteria that safeguard against harm to charities and the public are met; and
  • Authorize the Attorney General’s Office to implement regulations, beginning January 1, 2022, on the registration and reporting of charitable fundraising platforms and platform charities, the timeframe for distributing donations, and donor notifications, among other requirements.
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California State Senate Advances AG-Sponsored Bill to Provide Oversight and Protection of Online Charitable Donations

The California State Senate today approved Assembly Bill 488 (AB 488), a bill authored by Assemblymember Jacqui Irwin and sponsored by Attorney General Rob Bonta. AB 488 will ensure critical oversight by the California Department of Justice over charitable fundraising that occurs on internet platforms. Over the years, charitable giving through internet platforms has increased exponentially, requiring an update to California’s charitable giving laws. AB 488 will protect both donors and charities from deceptive or misleading solicitations by creating a framework that specifically defines online platform entities and requires them to register and report to the Attorney General’s Registry of Charitable Trusts.

“On top of a national pandemic, our state has been greatly impacted by this year’s wave of devastating wildfires. As Californians rise up to the occasion to help those in need, many will choose to make charitable donations through internet platforms,” said Attorney General Bonta. “To ensure my office’s continued ability to protect the public, we need to be in a stronger position to oversee online charitable fundraising practices. AB 488 will grant my office the ability to properly supervise third-party internet platforms and ensure that donations made online go towards their intended purposes, which is especially important during this difficult time.”

“I am pleased the State Senate voted overwhelmingly to approve AB 488,” said Assemblymember Jacqui Irwin. “After years of discussions and development with stakeholders, California is one step closer to securing the important oversight of the Attorney General that can provide every donor with the confidence that their donations are reaching charities and having an impact in their communities. In recent years donation trends have shifted, with hundreds of millions of dollars flowing through these online charitable fundraising platforms every year. With this new paradigm California must update its laws to provide the same level of oversight as traditional methods of fundraising.”

The California Department of Justice is responsible for regulatory supervision of charities, trustees, commercial fundraisers, and other legal entities that hold or solicit donations for charitable purposes. In recent years, charitable fundraising on internet platforms has grown exponentially, altering the landscape of charitable giving beyond what current law contemplated. Internet companies have developed methods for individuals to donate to charities through websites and phone applications that serve as “charitable fundraising platforms.” As currently written, California’s solicitation laws do not specifically reach these online platforms, resulting in instances of deceit and mistreatment of charitable donations that the Attorney General’s Office is not able to address through enforcement of existing charity oversight laws.

If signed into law, AB 488 will:

  • Create a level playing field for all charitable giving platforms, regardless of business model, by defining two new groups of entities, “charitable fundraising platforms” and “platform charities” that are subject to the Attorney General’s supervision;
  • Require covered entities to provide meaningful and transparent disclosures on their internet platforms, promptly distribute donations, and prohibit solicitations for charities not in good standing with the Attorney General’s Registry of Charitable Trusts; 
  • Permit some instances of soliciting for a charity without prior consent if certain criteria that safeguard against harm to charities and the public are met; and
  • Authorize the Attorney General’s Office to implement regulations to require donor notification and reporting requirements, and to encourage transparency and accountability.

The text of AB 488 is available here.

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Attorney General Bonta Announces Sponsorship of Legislation to Provide Oversight of Charitable Giving on Online Platforms

California Attorney General Rob Bonta today announced his sponsorship of AB 488, legislation that would provide critical oversight of charitable fundraising on internet platforms. The bill, authored by Assemblywoman Jacqui Irwin and sponsored by Attorney General Bonta, would authorize the California Department of Justice to exercise supervision over charitable fundraising occurring on internet platforms to protect donors and charities from deceptive or misleading solicitations.

“AB 488 would create the framework to oversee online charitable fundraising platforms by providing my office, which already oversees charitable organizations and fundraisers, the tools to match today’s virtual market,” said Attorney General Bonta. “Supervision of third-party online platforms is essential in order to make sure that donations go towards their intended purposes. This measure will give California’s generous donors and charities the peace of mind we all seek as we support one another amidst the COVID-19 pandemic.”

“Over the past year we have learned just how much our society relies on support from the non-profit sector. Whether it’s passing out food to hungry families or grants to the undocumented population, the pandemic shined a light on their tireless work. With online fundraising, there are more opportunities than ever to give to your favorite charity,” said Assemblymember Irwin. “However, it has also opened the possibility for fraudulent actors to operate. AB 488 will update California’s already strong charitable giving laws to provide clear rules for online fundraising.”

The California Department of Justice is responsible for regulatory supervision of charities, trustees, commercial fundraisers, and other legal entities that hold or solicit donations for charitable purposes. In recent years, charitable fundraising on internet platforms has changed the landscape of charitable giving. Internet companies have developed methods for individuals to donate to charities through websites and phone applications that serve as “charitable fundraising platforms.” California’s solicitation laws do not specifically reach these online platforms, resulting in instances of deceit and mistreatment of charitable donations that the Attorney General’s Office is not able to address through enforcement of existing charity oversight laws.

If signed into law, AB 488 would:

  • Create a level playing field for all charitable giving platforms, regardless of business model, by defining two new groups of entities, “charitable fundraising platforms” and “platform charities” that are subject to the Attorney General’s supervision;
  • Require covered entities to provide meaningful and transparent disclosures on their internet platforms, promptly distribute donations, and prohibit solicitations for charities not in good standing with the Attorney General’s Registry of Charitable Trusts;  
  • Permit some instances of soliciting for a charity without prior consent if certain criteria that safeguard against harm to charities and the public are met; and
  • Authorize the Attorney General’s Office to implement regulations to require donor notification and reporting requirements, and to encourage transparency and accountability.
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Attorney General Becerra Announces Sentencing in AIDS Research Alliance Fraud Scheme | State of California – Department of Justice – Office of the Attorney General

California Attorney General Xavier Becerra today announced the sentencing of Donnelly Montenegro, former acting Chief Operating Officer of the AIDS Research Alliance (ARA). Montenegro pleaded guilty in December to grand theft by fraudulent pretenses after being charged in a 22-count complaint. Montenegro falsely portrayed himself as an acting ARA staff member in order to steal $316,000 from a donor’s estate. As part of his plea, Montenegro received a two-year sentence today in Los Angeles County Superior Court.

“When people generously donate their hard-earned money, they’re hoping to support a cause they care about. They shouldn’t find themselves in the middle of a reckless scheme to take their money for selfish gain,” said Attorney General Becerra. “At the California Department of Justice, we take seriously our duty to protect good-hearted people from this type of fraud. It was important to hold Donnelly Montenegro accountable.”

The Los Angeles County-based ARA was a nonprofit research organization dedicated to developing better treatments for those affected by HIV and creating an HIV cure strategy. The ARA dissolved in early 2015, but Montenegro retained access to the organization’s records, and as a part of his scheme, led people to believe the organization was still in operation, rather than defunct, in order to obtain and then launder hundreds of thousands of dollars in donations intended for AIDS research from 2015 to 2017. Montenegro used the stolen donations for personal expenses including investments, credit card bills, and firearms. The 22-count felony complaint against Montenegro included six counts of grand theft, three counts of identity theft, and 13 counts of money laundering. 

The investigation of Montenegro was conducted by the Division of Law Enforcement’s White Collar Investigations Team (WCIT), which tackles white collar crimes like those that can bankrupt companies, devastate families by depleting their life savings, or cost government agencies billions of dollars. WCIT worked closely with the Fraud and Special Prosecutions (FSP) Section, which prosecutes complex criminal cases, primarily related to financial, securities, mortgage, and environmental fraud, public corruption, “underground economy” offenses, including tax and revenue fraud and counterfeiting; and human trafficking.

Attorney General Becerra is committed to protecting public safety and taking on financial crime. Last November, the Attorney General announced the arrest and arraignment of nine individuals on 136 felony counts for allegedly operating an advance fee mortgage relief scam that claimed to prevent the foreclosure of properties throughout Southern California. In October 2020, Attorney General Becerra announced arrests and charges following a multiagency investigation into a large scheme in the Bay Area to buy stolen goods and resell them for profit. In July 2020, the Attorney General announced arrests and charges against Christopher Mancuso, John Black, and Joseph Tufo for allegedly operating a multimillion-dollar investment fraud scheme that targeted more than 70 victims around the world. That same month, he announced a two-year jail sentence and tens of thousands of dollars in restitution as a result of the takedown of a bogus investment scheme. Attorney General Becerra also secured nearly $1 million in restitution and seized approximately $775,000 in counterfeit apparel. In June 2020, the Attorney General secured a felony tax evasion conviction and seized more than $1.5 million in unlicensed tobacco products.

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California AG announces settlement with Verity and Prime

California Attorney General Xavier Becerra announced a settlement with Verity Health System of California, Inc. (Verity) and Prime Healthcare Services, Inc. (Prime), putting in place additional conditions on Verity’s sale of St. Francis Medical Center in Los Angeles County to Prime. The settlement requires Prime to provide funding for charity care and community benefit services in the communities surrounding St. Francis over the next six fiscal years. Over the course of the six fiscal years of the deal, the settlement requires Prime to provide $9.35 million per year in charity care, and approximately $1.6 million per year in community benefit services. Under California law any proposed sale of a non-profit health facility to a for-profit corporation must secure the approval of the state Attorney General.