A New Jersey-based telemarketer has agreed to pay New York State $50,000 for soliciting funds from charities after being banned from doing business in the state.
New York Attorney General Eric Schneiderman said that telemarketer Mark Gelvan’s original 2004 ban on soliciting funds from organizations in New York came after a settlement was reached in a lawsuit filed against him and one of his telemarketing companies – All Pro Telemarketing. It was alleged that callers were making fraudulent claims to potential contributors, including stating that donations would be used to benefit families and widows of New York State Troopers and to sponsor drug and alcohol prevention programs.
Today’s $50,000 settlement stems from an investigation of Gelvan’s activities after 2004. Authorities received a tip that Gelvan was once again operating in New York.
“After he was banned from raising charitable dollars in New York State, this telemarketer did an end-run around the court’s order and again started to raise money from generous and unsuspecting New Yorkers. This time, Mr. Gelvan raised this money by acting as a third party broker,” said Schneiderman via a statement.
The New York Charities Bureau found that beginning in 2010, Gelvan and his company – Raising Money Inc. (RMI) — brokered agreements for the fundraiser Midwest Publishing-DN, Inc., (Midwest) with the Women to Women Breast Cancer Foundation, in Florida. There was a second agreement between Midwest and the National Vietnam Veterans Foundation, which is in Virginia. In return, Arizona-based Midwest agreed to give Gelvan and RMI a portion of the charitable deductions that the organization raised for the other fundraisers.
Attempts to reach all of these organizations for comment were not immediately successful.
In total, Gelvan received $37,720.24 from the charitable donations that New Yorkers’ made to Midwest and the other organizations involved. Gelvan remains barred from conducting or receiving any benefits from the solicitation of charitable donations in New York under today’s settlement.
The amount that Gelvan retained from his deals is not unusual. According to the AG’s most recent “Pennies for Charity” report, only 37.5 percent of the funds raised by telemarketers were kept by charities, although the report does not make a distinction between acquisition and renewal calls.
In addition, organizations retained less than 30 percent of the funds raised in 50.3 percent of campaigns. The most recent filings submitted by the Women to Women Breast Cancer Foundation and the National Vietnam Veterans Foundation showed that the organizations retained less than 10 percent and 11 percent, respectively, of the total donations they received from Midwest’s telemarketing services in 2012.
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