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Division of Consumer Affairs
Press Release

Attorney General
Anne Milgram
Division of Consumer Affairs, Director
David Szuchman
   
For Immediate Release:
May 20, 2009
For Further Information Contact:
Jeff Lamm, 973-504-6327
 
“Operation False Charity”
New Jersey Works with Federal Trade Commission
To Protect Consumers Against Fraudulent Solicitors

NEWARK – In a coordinated, nationwide effort, federal and state consumer protection agencies today launched a public education and enforcement program to combat fraudulent charitable solicitors claiming to help police, firefighters, and veterans.

The Federal Trade Commission (FTC) announced the launch of “Operation False Charity” at a press conference in Washington, D.C. this morning.

“We have already seen here in New Jersey -- and taken action against -- those who attempted to defraud donors through false claims of raising funds to help police officers, firefighters, first aid personnel and veterans,” Attorney General Anne Milgram said. “The FTC and the states have now joined together to alert the public to these scams and put these con artists on notice that we will not tolerate their deceptions and lies.”

In January, the Office of the Attorney General though its Division of Consumer Affairs filed suit against the “9/11 Rescue Workers Foundation, Inc.” of Kinnelon, N.J. after state investigators identified more than $75,000 in illegal expenditures from donated funds. The lawsuit seeks the return of the funds illegally spent by the foundation’s founder and president, Frederick Parisi, and by Jean Street, Parisi’s mother and former treasurer of the foundation. The state is asking the court to allow the returned funds to be used by legitimate charities that serve public safety personnel and veterans.

The Division of Consumer Affairs revoked the registration of the foundation in August, 2008, enjoined it from soliciting in New Jersey and barred Parisi from acting as an officer or director of any charitable organization operating in the state.

Parisi claimed the “9/11 Rescue Workers Foundation, Inc.” solicited donations to aid rescue workers who suffered health problems after responding to Ground Zero. State investigators identified 87 transactions where Parisi or Street signed checks or approved withdrawals that served no apparent charitable purposes. The transactions included checks for $27,000 and $20,000 that Street made out to herself, checks to pay private school tuition and other expenses for Parisi’s children and numerous payments to “cash.”

“We will continue to take action against those who attempt to enrich themselves under the guise of claiming to help our public safety personnel and veterans,” said Consumer Affairs Director David Szuchman. “Our Charitable Registration Unit is a resource that I encourage consumers to turn to for information about any organization that is asking them for donations.”

Charitable organizations are required to register annually and also submit financial disclosure information to the state. Charities that hire paid fund raisers to solicit donations also must report this information.

Under state regulations, paid fund raisers must identity themselves and the charitable organization they are working for when soliciting. Every printed solicitation and written confirmation or receipt for a donation must include the following statement:

“INFORMATION FILED WITH THE ATTORNEY GENERAL CONCERNING THIS CHARITABLE SOLICITATION AND THE PERCENTAGE OF CONTRIBUTIONS RECEIVED BY THE CHARITY DURING THE LAST REPORTING PERIOD THAT WERE DEDICATED TO THE CHARITABLE PURPOSE MAY BE OBTAINED FROM THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY BY CALLING 973-504-6215 AND IS AVAILABLE ON THE INTERNET AT http://www.state.nj.us/lps/ca/charity/chardir.htm . REGISTRATION WITH THE ATTORNEY GENERAL DOES NOT IMPLY ENDORSEMENT.”

Szuchman noted financial information submitted by two veterans organizations, Amvets and the Vietnam Veterans Fund, shows that the organizations respectively paid 87% and 80% of all donated monies to the professional fund raisers who solicit donations. Amvets received 13% of all donated monies while the Vietnam Veterans Fund received 20% of donated monies.

The state cannot set the minimum level or percentage of funding that an organization must receive from donations or cap the amount that a charitable organization pays the fund raiser it hires.

Charitable Giving – Consumer Education

The FTC today issued a new consumer alert providing tips about charities that solicit donations on behalf of veterans and military families. The alert can be found on the agency’s Web site, at www.ftc.gov/charityfraud .

The new alert, “Supporting the Troops: When Charities Solicit Donations on Behalf of Vets and Military Families,” offers the following tips to help consumers ensure that their donations go to a legitimate charity. Many of these tips apply to other charitable giving as well.

– Recognize that the words “veterans” or “military families” in an organization’s name don’t necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.

– Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.

Charitable giving tips, as well as the searchable database for the 23,000 charitable organizations registered to solicit donations in New Jersey, can be found at http://www.njconsumeraffairs.gov/ocp/charities.htm .

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