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Fundraiser Ordered To Pay $3.1 Million

By The NonProfit Times - June 17, 2013

A for-profit fundraising firm has been ordered to pay nearly $3.1 million in restitution for what prosecutors claim was fraudulent breast cancer fundraising.

Suffolk County (N.Y.) Supreme Court Justice Emily Pines ruled that Attorney General Eric Schneiderman’s office is authorized to distribute the restitution funds — totaling $3,094,246, plus $12,345 in out-of-pocket costs — to other cancer charities to keep with the intent of donors who contributed to Campaign Center and the Coalition Against Breast Cancer (CABC). A spokesperson for the Attorney General said no recipient charities have been identified, nor has a timetable for disbursement been set.

The judge ordered Campaign Center of Lydenhurst, N.Y., to be dissolved and its owner, Garrett Morgan, be enjoined from future fundraising in the State of New York.

Campaign Center was the primary fundraiser for the CABC, which was dissolved by a separate court order signed by Justice Pines in April. The April judgment required CABC’s board to pay about $1.55 million in restitution, which will be included in the disbursement. The May order found that Campaign Center and Morgan deceived donors by providing “false and misleading content in its solicitation materials” and engaged in “fraudulent fundraising tactics to maximize donations collected,” according to the judgment.

An attorney representing Morgan and Campaign Center could not immediately be reached for comment. Randy Friedberg, an attorney at New York City law firm White & Williams representing CABC, declined comment.

Campaign Center’s telemarketing script made reference to early detection of breast cancer as well as education and research conducted by CABC. Between 2005 and 2011, only approximately $48,000 went to providing mammograms and treatment, and $22,000 were grants for health events and a medical institution, none of which were earmarked for research or education. In that same period, Campaign Center raised $4.8 million for CABC and acted as a broker for other fundraisers that raised $5 million. Some 95 percent went to pay fundraising costs, payment to CABC officers and overhead expenses.

The May judgment also found that Campaign Center engaged in fraudulent fundraising tactics such as sending invoices to donors who had not pledged over the phone and to donors who had already made good on their pledges. Additionally, Campaign Center would change its telemarketing script to “convey the false impression that donations would stay in the community,” according to court documents.

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