Tag: Michigan

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AG Nessel Responds to Boy Scouts Settlement Offer

Michigan Attorney General Dana Nessel released the following statement in response to the $850 million civil settlement announced Thursday between the Boy Scouts of America (BSA) and more than 60,000 individuals who sued the organization over alleged sexual abuse: 

“This historic settlement is an acknowledgement from the Boy Scouts of America of the pain inflicted on thousands of scouts across the country. While this may bring resolution for those involved in the civil litigation, our criminal work is just beginning in Michigan. We must ensure abusers never again have an opportunity to prey on others, and the best way to achieve that is through a criminal investigation. I continue to encourage people with information related to sexual abuse perpetrated in our state to contact the Department of Attorney General’s Boy Scouts of America investigation hotline.  It is our job to secure additional justice for survivors, which in turn will better protect society from criminals who hide behind their positions of authority to abuse others. It doesn’t matter if it occurred last month or years ago-you deserve to be heard and we’re here to listen.” 

Last month, Nessel released a public service announcement (PSA) focused on the new joint investigation between the Michigan Department of Attorney General and Michigan State Police, urging abuse survivors to share their stories in order to pursue criminal charges. 

The agencies first announced the investigation at the beginning of June. 

In January, Nessel learned 1,700 sex-abuse claims filed in BSA’s ongoing bankruptcy case were in Michigan. The Department now believes there may be as many as 3,000 victims. 

If you have information about the Boy Scouts of America that you think would help, please call the investigation hotline at 844-324-3374 between 8 a.m. and 5 p.m. Monday through Friday. Tips can be left anonymously.  

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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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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. 

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AG Nessel Releases PSA for Boy Scouts of America Investigation

Michigan Attorney General Dana Nessel released a public service announcement (PSA) focused on the new joint investigation between the Michigan Department of Attorney General and Michigan State Police targeting the Boy Scouts of America (BSA).  

The agencies first asked the public to report instances of abuse at the beginning of June. 

The BSA investigation is similar to the Department’s ongoing clergy abuse investigation, which just secured its fourth conviction last week. 

In January, Nessel learned 1,700 sex-abuse claims filed in BSA’s ongoing bankruptcy case were in Michigan. The Department now believes there may be as many as 3,000 victims. 

Nessel released the PSA to urge victims of abuse at the hands of the Boy Scouts to report that abuse, as well as to remind people that this joint investigation with MSP is separate from the civil litigation. 

“I know speaking about these traumas is difficult,” Nessel says in the video. “That’s why I’m asking Michiganders to show their strength and courage by calling our trained victim advocates. It doesn’t matter if the abuse occurred last month or years ago-you deserve to be heard and we’re here to listen.” 

If you have information about the Boy Scouts of America that you think would help, please call the investigation hotline at 844-324-3374 between 8 a.m. and 5 p.m. Monday through Friday. Tips can be left anonymously.  

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MICHIGAN – Schuette: Food for the Poor Agrees to Pay $300,000 to Settle Allegations of Deceptive Charitable Solicitations

Michigan Attorney General Bill Schuette today announced his Charitable Trust Section has reached a settlement with Food for the Poor, a large Florida-based charity that solicits nationwide, to settle allegations of deceptive charitable solicitations.

Last December, Schuette alleged that Food for the Poor’s mailings overstated its efficiency when it told donors that “more than 95% of all donations go directly to programs that help the poor.” While denying that its solicitations were deceptive, Food for the Poor has agreed to cease this and other allegedly deceptive language as well as pay $300,000. Of the settlement amount, $175,000 will go to the Food Bank Council of Michigan and $75,000 to the Capuchin Soup Kitchen; both charities distribute food to hungry Michigan families. The remaining $50,000 of the settlement will reimburse the State of Michigan for investigative costs.

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