Archives for month: November, 2009

A Case of Bad Charities

Posted by jg on November 24th, 2009 in Category Charity News, News from the USA (no responses)

As sad as it is there are always criminals out there ready to try and trick generous folks into donating to a bad charity.  The following was posted over at

The AIP along with AARP, the National Association of Attorneys General, the National Association of Secretaries of State and a few other public service organizations partnered with the Federal Trade Commission (FTC) and over 60 law enforcers in a 48-state sweep of questionable charities, fundraising companies and individuals. The sweep, which included 76 law enforcement actions, focused on so-called “hero charities” that purport to raise money for police, firefighters and veterans. Why the focus on hero charities? Because unscrupulous fundraisers know that people are more likely to give to these causes than any others. Who wouldn’t want to help the heroes that risk their lives to protect us?

At the May 2009 press conference in Washington, DC where the sweep was announced, Sheriff Jerry “Peanuts” Gaines of Warren County, Kentucky spoke of his encounter with a fake charity. The Sheriff, who prides himself on his open door policy, kept hearing from people who wanted to drop off or mail him a check to pay for bulletproof vests. He told these well-intentioned folks that his office’s law enforcement personnel already had bulletproof vests and then asked them why they thought otherwise. It turns out that each of them had received a call from a telemarketer who said that he was raising money to buy vests for the local Sheriff’s department. So the next time that you want to contribute in response to a solicitation for your local police or firefighters, first contact them to find out if they have authorized it and agree with the need for the appeal.

The FTC announced at the May press conference that it had filed two federal court complaints, one of which was against three AIP F rated charities that claimed to help disabled police or firefighters or needy military families when “[t]heir real goal, however, was to dupe consumers into contributing money that the defendants used overwhelmingly just to support themselves and their fundraisers.” American Veterans Relief Foundation (AVRF), Coalition of Police and Sheriffs (COPS) and Disabled Firefighters Fund (DFF), which all operate out of the same address in Santa Ana, California, are alleged by the FTC to be shams. Only 5.4% of the $19 million that these groups raised from 2005 to 2008 was spent on charitable activities.

These three F rated charities “were initially formed by an individual, Joseph Shambaugh, who used them as facades to facilitate raising millions of dollars from generous but unwitting donors,” according to the FTC complaint. Shambaugh found a president for each charity who provided no oversight and allowed him to siphon off most of the donated funds after the telemarketer got 80% to 90% of the money raised. From 2000 to mid-2005 less than 2% of the total raised was earmarked for the charitable programs described in the solicitations, according to the complaint. The FTC says Shambaugh was indicted in 2006 for mail fraud and money laundering connected with his fundraising operation and remains a fugitive.

Just be careful when donating to a charity and don’t let these types of unscrupulous criminals steal your money.