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Judge Orders Cancer Fundraiser To Dissolve

By The NonProfit Times - May 3, 2013

A for-profit fundraising firm was ordered dissolved for engaging in what prosecutors called fraudulent activity regarding cancer fundraising.

The New York State Supreme Court has issued a summary judgment against fundraising firm Campaign Center, based in Lindenhurst, N.Y., and its founder, Garrett Morgan. Campaign Center was the primary fundraiser for the Coalition Against Breast Cancer (CABC), which was dissolved by a separate court order, also signed by Pines, in April.

Representatives from and attorneys for Campaign Center and CABC could not be reached for comment.

The court ruled 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. It ordered that the firm be dissolved and that Morgan be barred from engaging in charitable solicitations in New York.

Among the findings reported in the judgment was that the 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 $48,572 went to providing mammograms or treatment and fewer than 50 low-income women were served, and $22,000 went to grants for health events and a medical institution, “none of which…were earmarked for research or education.”

During that same period, Campaign Center directly raised about $4.8 million and acted as a broker for other fundraising that raised an additional $5 million. Some 80 percent of that total went back to the Campaign Center, another 15 percent, or $1.4 million, went to pay CABC’s directors and to overhead expenses.

Only 4 percent of the estimated $10 million raised for CABC went to programs and services. The majority of that, $364,700 went to scholarships for relatives of cancer victims, a program that was not referenced at all in Campaign Center’s telemarketing scripts. “Morgan never revised the solicitation materials to remove references to ‘research’ and ‘education’ despite his knowledge that CABC had stopped funding research and conducting educational seminars…” said the judgment.

The judgment also found that Campaign Center engaged in fraudulent fundraising tactics such as sending invoices to donors who had declined to pledge over the phone and sending invoices to donors who had already made good on their pledge. They would also change the telemarketing script to “convey the false impression that donations would stay in the community.”

The summary judgment ordered the dissolution of Campaign Center and enjoined Morgan from working in the field of fundraising in New York State. Morgan will also be ordered to pay restitution in amount to be determined at an inquest scheduled for May 20. The CABC consent order also ordered that organization’s dissolution and barred three of its directors from engaging in charitable solicitations in New York, who must pay a total of $1.555 million.

“This important decision reaffirms my office’s determination to use the powers available under New York law to ensure honesty and integrity in the field of charitable fundraising, and to protect New Yorkers,” said New York State Attorney General Eric Schneiderman in a statement.

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