A Superior Court judge in New Jersey has ruled that a Super Storm Sandy charity accused of fraud will have an outside administrator distribute all remaining funds before dissolving.

The ruling by Judge Robert P. Contillo in Bergen County approved the terms of a Final Consent Judgment and Settlement Agreement (FCJSA) which, aside from the distribution of all remaining funds to registered Sandy charities, will bar John Sandberg and Christine Terracino — the founders of the alleged fraudulent charity, the Hurricane Sandy Relief Foundation (HSRF) — from ever running a charitable organization related to Sandy. They also are barred from serving in a leadership position in any charitable organization in the state for a minimum of two years.

The State of New Jersey sued Sandberg and Terracino on February 21 for allegedly diverting donated funds to HSRF into their personal accounts and misleading the public by claiming that all donations would be tax deductible. The two were charged with violating the terms of the state’s Charitable Registration and Investigations Act and Charities Regulations and the Consumer Fraud Act.

The Court issued a ban on all further donations to HSRF on February 28, and all supplies and gift cards donated to the organization were given to the Salvation Army. Sandberg and Terracino could not be reached for comment.

“Charities are required to operate in an open and transparent manner, to ensure the public maintains its trust that donations are used as intended,” said Acting Attorney General John J. Hoffman.  “Annual registration, which requires financial disclosure, is the foundation of accountability to the public.  We will act, as we did in this case, whenever we believe our charities laws and regulations have been violated.”

Based on information provided by Sandberg and Terracino, the state believes that around $334,000 in donations are available for distribution. Those remaining funds will be distributed by an outside Organization Administrator within five months. After the money has been distributed, the terms of the FCJSA state that both the HSRF and the organization itself must be shutdown.

The FCJSA includes a settlement amount of $79,195.18, representing the State’s attorneys’ fees and investigative costs. That amount will be suspended automatically after four years as long as Sandberg and Terracino comply with the terms of the settlement. Both individuals will be allowed to make a written request to the New Jersey Division of Consumer Affairs to serve in a leadership role for a registered charitable organization after two years.

Eric Kanefsky, Director of the New Jersey Division of Consumer Affairs, noted that his staff has registered two dozen new charitable organizations that have a stated purpose of aiding Superstorm Sandy victims since the storm hit New Jersey at the end of October 2012.  Another 10 organizations have submitted registration forms that are being processed.