Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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AG Announces Legal Action In Six Charitable Fundraising Cases As Part Of A Joint Law Enforcement Campaign With The FTC

May 20, 2003

Attorney General Hardy Myers today announced legal action in six charitable fundraising cases as part of a joint law enforcement campaign with the Federal Trade Commission.

"Fraudulent and misleading solicitations deceive individuals and businesses and deprive reputable charities of much-needed contributions," Myers said. "We welcome this opportunity to remind Oregonians to investigate charities thoroughly before agreeing to contribute."

Myers filed a complaint in Multnomah County Circuit Court against the Association for Disabled Firefighters, Inc. ("ADF") of Santa Ana, California. According to the complaint ADF misrepresented the extent to which donors' contributions are used to provide financial assistance to disabled firefighters and their families and other groups. The complaint alleges that, out of more than $4.4 million in nationwide contributions ADF and its predecessor corporation received since 1999, less than one percent were used to provide financial assistance to firefighters or other groups. This is the first complaint the Oregon Attorney General has filed against a charity for misleading donors about its use of funds following the Supreme Court's decision in Madigan vs. Telemarketing Associates earlier this month. That decision affirmed states' efforts to target fraudulent fundraising by holding that the First Amendment does not shield organizations from liability for misleading charitable solicitations.

Myers also announced successful resolution of five enforcement actions.

  • Disabled Veterans Associations of Lakewood, Ohio signed an Assurance of Voluntary Compliance in which it agreed to cease Oregon solicitations and collections and pay restitution of $9,000. DVA violated Oregon's Unlawful Trade Practices Act by making false representations claiming significant charitable programs in Oregon when its only activity in the state consisted of annual grants of less than $1,000 to a local Ronald McDonald House.
  • Veterans Community Service of Portland, Oregon was the subject of Default Judgments against principals Stephen Lint and Thomas White. The judgments prevent them from acting as professional fundraisers and require each to pay over $67,000 in civil penalties, restitution and investigative costs. Lint and White violated Oregon's Charitable Solicitations Act by conducting a campaign for which neither the professional fundraiser, nor the affiliated charity, was properly registered, and misrepresenting the tax deductibility of contributions.
  • Amvets Dept. of Oregon Hospital and Service Foundation, Inc. of Portland, Oregon has agreed to pay $15,000 in penalties for violations of a previous Assurance of Voluntary Compliance including misrepresenting the percentage of donated funds dedicated to program services, invoicing individuals who had not agreed to donate, and failing to submit financial reports as scheduled.
  • C.U.R.E. (Children's United Relief Effort) of Minnesota signed an Assurance of Voluntary Compliance agreeing to pay $6,000 in restitution and investigative costs for misrepresenting that it supported local programs by establishing an Oregon mail drop for the sole purpose of soliciting and receiving donations from Oregonians.
  • Tri-County Info. Center, Inc. of Portland, Oregon signed an Assurance of Voluntary Compliance in which it agreed not to solicit in Oregon on behalf of Association for Disabled Firefighters, Inc. nor to make representations on behalf of any other charity that it conducts significant charitable programs or makes monetary grants in Oregon unless that is true. Tri-County violated Oregon's Charitable Solicitations Act by representing that significant portions of donations would be used to support disabled firefighters and burn camps in Oregon when no such programs exist, and failed to identify itself as a professional fundraiser.

The FTC announced five nation-wide fundraising fraud cases in this major effort, which it dubbed "Operation Phoney Philanthropy." Four of these federal actions involved deceptive badge-related fundraising in which telemarketers misrepresented affiliation with local police or firefighting agencies. The fifth case, directed at businesses, claimed affiliation with local hospitals to sell activity books for sick children.

According to the FTC and the Oregon Dept. of Justice, consumers who hear such promises of local benefit or particular program support, especially in telephone solicitations, should take the time to verify the claims. Ask the solicitor how much of the donation will go to support the described programs. Call the local police or other named groups to ensure that they will benefit from the donation. Check up on the charity at:

www.doj.state.or.us, www.guidestar.org, or www.give.org

and report any deceptive solicitations to the Oregon Dept. of Justice Charitable Activities Section in Portland at (503) 229-5725.

Contact:

Victoria Cox, (971) 673-1880
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