New Jersey Fundraiser Banned From Soliciting In New York
Investigation Alleged Fraud and Deception by Telemarketers
Attorney General Eliot Spitzer today announced that a New Jersey-based fundraising corporation and its owner will be barred from soliciting charitable contributions in New York State.
The action is part of a settlement arising from a lawsuit filed against All-Pro Telemarketing Associates Corp., of Fairfield, New Jersey. The lawsuit alleged that the company made fraudulent claims to potential contributors, stating that donations would be used to benefit families and widows of New York State Troopers and to sponsor drug and alcohol prevention programs.
Under the settlement, All-Pro and its owner Mark Gelvan, 35, of Towaco, New Jersey will never again solicit, either directly or indirectly, contributions from New York residents for police benevolent or other charitable purposes, or participate in any such solicitations conducted by others.
"Misleading solicitations erode the public's confidence in charitable giving," said Spitzer. "There is no room in New York for professional fund raisers who defraud or mislead donors."
The settlement resolves a suit filed in October 2002 regarding All-Pro and Gelvan's solicitation campaign on behalf of the Fraternal Order of New York State Troopers, Inc., a
240-member organization composed of active and retired law-enforcement officers.
All-Pro's solicitations requested donations for emergency funds for families and widows of the Order's members and for charitable organizations, but no such dedicated funds existed. Instead, donations were used for the Order's union purposes, such as personal benefits for its members and political donations.
New York State Police Superintendent Wayne E. Bennett said: "The New York State Police receives its funding through the state budget and does not solicit public donations. The only organization authorized to accept donations on behalf of the New York State Police is the not-for-profit Trooper Foundation. The Foundation does not engage in telephone solicitations to the public."
All-Pro also represented that donations would fund drug and alcohol awareness shows for elementary school children across the state. However, All-Pro performed only 36 shows, over a seven-year period, in less than one-quarter of the state's 62 counties. Its total expenditure for these shows amounted to less than one-half of one percent, $18,742 of the more than $6.6 million collected.
All-Pro's callers failed to disclose any of these facts. All-Pro also failed to disclose that: the Order was a union and not a charity; that donations to it were not tax deductible, a disclosure required by federal law; and that the calls were being conducted by professional solicitors, a disclosure required by New York law.
Spitzer's office previously reached a settlement with the Order in which it agreed to not solicit funds and pay its remaining donations, totaling $212,600, to a legitimate charity.
The Attorney General's settlement will end All-Pro's solicitations of New York residents. In 2002, All-Pro conducted telephone campaigns seeking donations from New Yorkers on behalf of 12 charitable or police union clients, generating a total of $4.7 million in donations, of which All-Pro retained 86.5 percent. All-Pro's campaign for the Order, conducted from August 1995 through September 2002, generated donations totaling $6.6 million, of which All-Pro retained 85 percent.
The case was handled by Assistant Attorney General Timothy B. Lennon of the Charities Bureau, under the direction of Assistant Attorney General Robert Pigott and William Josephson, Assistant Attorney General-in-Charge of the Charities Bureau.