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For Immediate Release:  
For Further Information:

July 31, 2006

Office of The Attorney General
- Zulima V. Farber, Attorney General
Division of Consumer Affairs
- Kimberly Ricketts, Director

 

Kara Wood
973-504-6327

 
State Sues Charity, Seeks Ban on Future Activities;
Donation Canisters Yielded Little or No Money for Charity
- Collection Canisters to be Impounded

NEWARK – The Attorney General’s Office and the Division of Consumer Affairs have filed suit against a Bergen County charity for allegedly mishandling donations and misleading consumers about how their donations would be used, Attorney General Zulima V. Farber and Consumer Affairs Director Kimberly Ricketts announced today.

The complaint, filed in State Superior Court in Bergen County, alleges multiple violations of the Charitable Registration and Investigation Act of 1994 and the state’s Charities Regulations by Lovers of Animals Organization (LOAO), a non-profit corporation based in Ridgefield Park.

The state is seeking to assess civil penalties and to permanently bar LOAO from registering and operating as, among other things, a charitable organization, independent paid fund-raiser or solicitor in New Jersey. The state also sought the court’s permission to immediately collect and hold all LOAO canisters and their proceeds pending the final outcome of this matter.

In an Order to Show Cause with Temporary Restraints, the Court found that emergency relief in this situation was both warranted and in the public interest. The Order, issued by Judge Peter Doyne on August 1, authorizes the state to immediately collect and impound LOAO collection canisters and their proceeds and orders LOAO to cooperate fully in and not interfere with that effort. All proceeds that are collected will be held in an interest-bearing escrow account pending further order of the court.

“We have an organization that tugs at the heartstrings of honest consumers to solicit donations but then spends these monies on things that do not benefit or help the animals,“ Attorney General Farber said. “We seek swift action to ensure that no additional consumers are cheated out of their hard-earned money under false pretenses.”

For the fiscal year ending 2005, LOAO’s accounting records indicate $7,535.45 in income and $7,432.41 in expenses. According to IRS records, LOAO reported $7,094.80 in income and $7,054.80 in expenses for the fiscal year ending 2005. These expenses, paid for from the same petty cash account where contributions were deposited, included gasoline, tolls, motor vehicle repairs and office supplies.

“Unfortunately, disreputable organizations make every well-intentioned consumer second guess their decision to contribute to a charitable cause,” said Consumer Affairs Director Ricketts. “It is our intention, through this case and others, to take strong and immediate action against such bad actors to reassure consumer confidence and provide a level playing field for organizations that do the right thing for the right reasons.”

The state’s complaint alleges that LOAO failed to comply with the Charitable Registration and Investigation Act and the state’s Charities Regulations by:

  • Failing to exercise control over fund-raising activities;
  • Making untruthful statements and misrepresentations;
  • Failing to include a required statement on canisters;
  • Failing to maintain complete and accurate records;
  • Failing to include required information in a professional fund raising contract; and
  • Failing to comply with the Attorney General’s investigation.

Russell Frontera, who is among the individuals responsible for the collection of LOAO’s canisters, entered into a Consent Order in June 1993 with the Division for violations of the Charities Act and Charities Regulations. The Consent Order barred Frontera from serving as an officer, trustee, director or employee of a charity for five years and required him to notify the Division if he become involved with a charitable organization at any time thereafter. To date, Frontera has never notified the Division of his involvement with LOAO.

To facilitate the collection of LOAO canisters, the Division asks that store owners who are in possession of LOAO canisters pull them off the counters and store them in a secure location . Store owners should then call the Division at (973) 504-6299 and an investigator with the appropriate credentials will pick up the canister. The Division should be notified immediately if anyone other than a credentialed investigator attempts to remove the canister. Consumers are also encouraged to call the hotline with information about the location of canisters so that they can be collected.

Deputy Attorney General Brian M. Brennan is representing the State in this matter.

In June, the Attorney General’s Office and Consumer Affairs successfully obtained a judgment and order barring the National Animal Welfare Foundation (NAWF) and its principal, Patrick G. Gemas, from future charitable activities in New Jersey after filing a lawsuit that, among other things, alleged misuse of public donations.

The public can obtain information about charitable organizations and paid fund-raisers who are registered to operate in New Jersey by contacting Consumer Affairs’ Charitable Registration Unit at 973-504-6215 or by going to the unit’s web site, www.NJConsumerAffairs.gov/ocp.htm#charity.

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