Attorney General Mills and Secretary of State Dunlap Announce Operation False Charity Law Enforcement Sweep

May 20, 2009


CONTACT: Kate Simmons, 207-626-8577

Operation False Charity Law Enforcement Sweep Attorney General and Secretary of State Joined by FTC, 48 States in Bringing 76 Actions Against Fraudulent Solicitors Nationwide

AUGUSTA - In a nationwide, federal-state crackdown on fraudulent charitable solicitors, Attorney General Janet T. Mills and Secretary of State Matthew Dunlap joined the Federal Trade Commission and 61 other agencies in 48 states and the District of Columbia to announce Operation False Charity. As a part of Operation False Charity, the Federal Trade Commission and these state agencies announced 76 enforcement actions and released new education materials to help consumers recognize and avoid charitable solicitation fraud.

?Charitable giving is a powerful way to benefit organizations who work to improve communities across Maine and throughout the world. During these challenging economic times, it is wise to be cautious, however, and verify that your donations are going to a legitimate organization, and not to scam artists,? said Attorney General Mills.

In the State of Maine, charitable organizations must either be licensed or receive an exemption from licensure to be able to solicit donations from members of the public. Non-profit entities doing business in the state are required to register with the Bureau of Corporations, Elections & Commissions. To find out if a non-profit is authorized to conduct business in the state please call 207-624-7752 or go online to use the Department's Interactive Corporate Service:

Secretary of State Dunlap said, ?It's important for people to know that there are plenty of resources available to them to assure that their charitable dollars are going to a charity and not some scheme. Attorney General Mills and I are committed to assisting the public in any way we can to provide the transparency needed for people to make informed choices."

As part of Operation False Charity, Attorney General Mills announced that during the past eighteen months eight cease and desist letters were issued to unlicensed charities who were soliciting donations in Maine. While four of the charities promptly applied for and received licenses to solicit funds, one of the charities entered into a consent agreement in which it admitted to unlicensed practice and paid a $7,500 fine in exchange for receiving a license. One charity did not report disciplinary proceedings from another state on its renewal application and paid a $500 fine. Another charity did not submit proper financial information and it paid a $1,000 fine. In the last several years, the Office of the Attorney General has also brought actions against two Maine non-profit corporations and their officers and directors for violations of Maine?s laws governing nonprofit corporations and charities. The settlements reached resulted in the judicial dissolution of The Gentle Wind Project, and the appointment of a new board of directors for the Seal Cove Auto Museum.

The FTC today issued a new consumer alert providing tips about charities that solicit donations on behalf of veterans and military families, which can be found on the agency?s web site at:

While many legitimate charities are soliciting donations to support the nation?s military veterans, not all are charities that are legitimate, some are operators whose only purpose is to make money for themselves. Others are paid fundraisers whose fees can use up most of a donation. The new alert, ?Supporting the Troops: When Charities Solicit Donations on Behalf of Vets and Military Families,? offers the following tips to help consumers ensure that their donations go to a legitimate charity. Many of these tips apply to other charitable giving as well.

? Recognize that the words ?veterans? or ?military families? in an organization?s name don?t necessarily mean that veterans or the families of active-duty personnel will benefit from your donation.

? Donate to charities with a track record and a history. Charities that spring up overnight may disappear just as quickly.

? If you have any doubt about whether you?ve made a pledge or a contribution, check your records. If you don?t remember making the donation or pledge, resist the pressure to give.

? Check out an organization before donating. Some phony charities use names, seals and logos that look or sound like those of respected, legitimate organizations.

? Call the office that regulates charitable organizations to see whether the charity or fundraising organization has to be registered in your state.

? Do not send or give cash donations. For security and tax record purposes, it?s best to pay by check made payable to the charity.

? Ask for a receipt showing the amount of your contribution.

? Be wary of promises of guaranteed sweepstakes winnings in exchange for a contribution. You never have to give a donation to be eligible to win a sweepstakes.

Sites where consumers can check out a charity include: ? Guidestar - Better Business Bureau Wise Giving Alliance - CharityNavigator - American Institute of Philanthropy