As Purim approaches and with Pesach a month away, Jews look for ways and means to give charitable donations to worthy causes. Unfortunately many unworthy causes have been clamoring for those donations—and there is only limited oversight in the State of New Jersey for many of these “causes.”
Appointed by Governor Chris Christie in April of 2012, Eric T. Kanefsky, Director of The State of New Jersey Department of Law & Public Safety, Division of Consumer Affairs, has been making headway with a staff of only 11 responsible for overseeing 25,000 charities as of June of 2013.
Despite numerous arrests and convictions, the lightness of penalties and the lucrative profits made by con artists preying on the generous of heart has been bilking the public out of millions. What’s worse, a fraction of the money collected, if that much, ever gets to a worthwhile charity.
One recent charitable endeavor accused of fraud was the “Hurricane Sandy Relief Foundation.” Please note that a lot of these scams make up names that are similar with perhaps a one word difference from legitimate and well-run charities.
In this case, John Sandberg and Christina Terraccino, residents of Sparta, and ten other individuals, collected more than $334,000 by misleading the public by diverting donated funds into their personal accounts, misled donors with false claims about the ways donations would be used and falsely claimed that the donations were tax-deductible. A consent order bars Sandberg and Terraccino from ever again running a charitable organization related to Hurricane Sandy and from serving in a leadership position in any charitable organization in New Jersey for a minimum of two years.
Another charity scam was allegedly perpetrated by Beachwood residents Carl and Denise Monto and their associate, Patrick Caffrey of Matawan. They created an organization that claimed donation funds went toward buying cars that would be sold to help children with cancer.
According to Kanefsky’s office: “Using false identities and fraudulent driver’s licenses, Carl Monto allegedly purchased dozens of vehicles on behalf of Tri County, misusing the charity’s 501(c)(3) status to evade paying sales tax, with Caffrey’s knowledge and approval. In exchange, Caffrey donated a mere $100 per vehicle to Tri County.
Additionally, the State alleged that the Montos operated I Buy Cars For You out of their home as an unlicensed motor vehicle dealership. They shipped the cars overseas and made millions of dollars, none of which went any closer to a child with cancer than the perpetrators pockets.
The State’s lawsuit charged Caffrey, the Montos, Tri County, and I Buy Cars For You with violations of New Jersey’s Consumer Fraud Act, Charities Registration and Investigation Act, and Charities Regulations.
New Jersey politicians are not exempt from participating in charity scams. Former New Jersey Assemblyman Albert Coutinho was sentenced for stealing funds from his family’s charitable foundation and filing false financial disclosure forms with the Legislature. In pleading guilty, Coutinho admitted to misappropriating, between 2008 and 2012, donations and contributions to his family’s charitable foundation. He was sentenced to three years of probation, ordered to perform 50 hours of community service and to make full restitution of $32,500 to the charitable foundation. He is permanently barred from holding public office or public employment in New Jersey.
Many of the worst charities—designated so by paying for profit companies nearly two thirds of the amount collected, use telemarketers to do their dirty work. Paul J. Grossi, of Towaco, is the owner and operator of PJG Enterprises, LLC, with business addresses in Fairfield and Towaco. Grossi and PJG allegedly function as a paid fundraiser for charities even though, in violation of New Jersey’s Charities Registration Act and Charities Regulations, they are not registered with the State and have not provided financial records or other documents required to ensure the integrity and transparency of charities and their paid fundraisers.
Using a “boiler room” setting, Grossi and PJG employ teenage telemarketers to solicit consumers in New Jersey and elsewhere. In their phone calls to consumers, the telemarketers claim they represent charities with missions to help cancer patients, missing children, American veterans, or police officers. Grossi also maintains post office boxes in New Jersey, in several charities’ names; and Grossi and PJG have access to funds donated to charities, the State alleges. However, like Grossi and PJG, none of the purported charities are registered in New Jersey as required by law. New Jersey consumers therefore have no way of verifying whether donations made through PJG actually reach the charities, or of verifying how the charities spend any money they do receive.
Another alleged telemarketing scam that seems to be getting away with it is “Community Support,” which is affiliated with “Outreach Calling.” New Jersey joined with 38 states in order to bring down this group that allegedly promised that donations made to it would go to the needy in the areas from which the victims called in their donations.
Thomas Berkenbush, the man listed on contracts as the president of Community Support, Inc. was levied a fine of $200,000, but it was a mere drop in the bucket and the multimillion-dollar fraud schemers who use cold calling moved their phone room to New Jersey and transitioned to the name “Outreach Calling” owned by Damian Muziani. This became a multi-million-dollar operation in its first three years of operation. Muziani lives in an apartment above a New Jersey liquor store next to one of his company’s offices and from reports is still in business.
Before you give get on line and check out whether or not you are being scammed. The Division of Consumer Affairs maintains a Charitable Registration Directory of more than 10,000 charitable organizations and 250 professional fund-raising firms that are active in New Jersey. The directory lists the location of the charity, the annual income and their annual expenses and can be found at: http://www.njconsumeraffairs.gov/charity/chairdir.htm.
By Anne Phyllis Pinzow
