12 Horrible Charity Scams

  • Give ‘Til It Hurts

    While giving to deserving causes is socially beneficial and personally fulfilling, it can also lead you into a pit of snakes. Unfortunately, there are those out there ready to take advantage of your most benevolent impulses to give. Scams and hoaxes preying on the charity-minded are common with fake groups asking for money, recognized charities spending huge amounts on fundraising activities, officers pocketing the cash, and predators out to exploit the revenues of charities organizations on the up-and-up. Here are some scammers who actually got caught in the act. Photo Credit: howardlake
    Civic Development Group (CDG)
  • Civic Development Group (CDG)

    In March of this year, The Federal Trade Commission ordered CDG, a New Jersey based telemarketing company, to settle for $18.8 million, the highest penalty ever for a consumer protection case. The CDG violated FTC orders by misleading consumers to believe that they were donating directly to legitimate charities serving police, firefighters, and veterans, when in fact only a small percentage of the donations actually went to these charities. The CDG owners, Scott Pasch and David Keezer, have been banned from operating any charity or telemarketing organizations in the future and were also forced to turn over their numerous luxury assets, including both of their $2 million homes; $1.4 million in paintings by Picasso and Van Gogh; a guitar collection valued at $800,000; $270,000 in proceeds from a recently sold wine collection; jewelry valued at $117,000; three Mercedes, two Bentleys, and various other assets purchased with funds raised in the name of charity. Photo Credit: mira66
    Bernie Madoff
  • Bernie Madoff

    Everyone is probably familiar with the largest Ponzi scheme in history that defrauded thousands of investors of billions of dollars.  The perpetrator of this monumental con, Bernard Madoff, is currently serving 150 years in federal prison his crimes. One of his victims was the Elie Wiesel Foundation for Humanity – a charity that helps Ethiopian Jews and Darfuri refugees, among its other work fighting intolerance and international injustices. Wiesel, a Nobel Peace Prize recipient and Holocaust survivor, invested and lost not only his personal income with Madoff, but $15.2 million of his charity’s as well. Photo Credit: A National Acrobat
    Disabled Veterans Associations
  • Disabled Veterans Associations

    A well-established charity founded in 1920 with the honorable mission of improving the quality of life for our veterans and their families, the Disabled Veterans Associations has been rated by Charity Navigator as the number 1 charity not living up to its accountability standards. According to financial records publicly available through the IRS, it is alleged that the charity meant to help veterans is spending 94.6’% of its funds on fundraising expenses totally $8 million a year. Much of the fundraising is through contracted third parties, including the disgraced Community Development Group. There are no laws regulating the amount of money charities spend on overhead, fund raising, or giving, but the reported inefficiency of this one should raise some red flags. Photo Credit: Michael Brownlee
    Donation Virus
  • Donation Virus

    Following the massive earthquake in Chile this past February, the personal computer security software company, Symantec, released a warning of an online scam being perpetrated on those searching for information on donating to charities sending relief to victims of the disaster.  The search leads browsers to rogue antivirus websites which attempt to perform fake antivirus scans convincing users to download a program that steals information from the user’s computer. Photo Credit: ccox888
    Police Survivor’s Fund
  • Police Survivor’s Fund

    Justin Patrick White, 57, president of the Police Survivor’ Fund, obtained nearly half a million dollars in donations that were promised to families of police officers killed in the line of duty around the Sept. 11 attacks and before. Only 3% of the monies raised are said to have gone to the surviving family members. White allegedly trained telemarketers to collect donations by giving them scripts that appealed to the charitably-minded and instructed telemarketers not to volunteer information about where the donations would go. Photo Credit: Sander Lamme
    The Deniz Feneri Foundation Fraud
  • The Deniz Feneri Foundation Fraud

    The Deniz Feneri Foundation, an Islamic charity, faced backlash from the Muslim community in 2008 when three of the heads of their German fundraising arm were charged with embezzeling donations from devout Turks living in Western Europe. The 45-year-old founder and head of the German section of Deniz Feneri was jailed 69 months for embezzlement, while his successor in the post was given 33 months by the Frankfurt state court. The donations were meant for poverty-stricken Palestinians, Turks, and refugees in Pakistan, but only a fraction was given to the poor. The defendants kept a portion to invest in Turkish real estate and admitted in court to taking $30 million in cash from the bank accounts of the German branch of Deniz Feneri. Photo Credit: erix!
    Penny for the Homeless
  • Penny for the Homeless

    New Yorkers might be wondering what happened to the empty water cooler jugs set on tables along city sidewalks with self-identified homeless men and women asking for pennies on behalf of the United Homeless Organization. They have been ordered to be removed and a judge ruled in June of this year to permanently shut them down. The U.H.O.’s president, a formerly homeless Bronx man named Stephen Riley, and its director, Myra Walker, are accused of using tens of thousands of dollars raised on behalf of the homeless for personal expenses.  The workers collecting change were paying a $15 per-shift fee directly to Mr. Riley and Ms. Walker, and were permitted to keep the rest of what they collect for themselves. There was no service organization behind U.H.O. and a judge banned Riley and Walker from ever engaging in non-profit work. Photo Credit: r-z
    Cars For Kids
  • Cars For Kids

    New York Attorney General Andrew M. Cuomo filed suit against a charity that accepts donated cars. The organization, Feed the Hungry, is accused of raising $430,000 through the sales of donated cars between 2002 and 2009 and only using $7,900 for charitable purposes. Cuomo has sent subpoenas to 16 other similar groups with car donation for charity programs, requiring them to open their books for this ongoing investigation. Photo Credit: Flat-Black 66
  • 1-800-We-Buy-Houses

    You may have seen the flyers posted to telephone poles and traffic signs. Unfortunately, they're not all legitimate. The scam goes like this: individuals or groups approach homeowners facing foreclosure and promise to help save their homes. They convince the desperate homeowner to transfer their property’s deed over to an investor who would then make the mortgage payments going forward while the owner rents and rebuilds their credit.  However, as soon as the homeowner hands over the deed, the investor gives them the boot and sells the property for profit. Photo Credit: respres
    Faking Cancer
  • Faking Cancer

    Ashley Kirilow, a 23 year old woman from Ontario, Canada claiming to have been diagnosed with four types of terminal cancer made off with over $20,000.00 donated to the charitable organization she set up for cancer research at the University of Alberta. After having a benign lump removed from her breast in 2008, she shaved her head, waxed her eyebrows, and plucked her eyelashes to garner sympathy and collect money for her bogus charity – which was really just a Facebook page. After charitable event organizers lost touch with Kirilow and were informed by Kirilow’s parents that their daughter was not sick, she disappeared altogether and is now under investigation for fraud. Photo Credit: pinkmoose
    The Case of the Crooked Minister
  • The Case of the Crooked Minister

    Tony Alamo, founder of Tony Alamo Christian Ministries, an alleged cult leader and convicted in 2009 on ten federal counts under the Mann Act - taking minor girls across state lines for sex - is currently serving 175 years in prison. Before this spectacular fall from grace, he was sued on behalf of ex-followers for fraud for asking his ministry workers to accept donations of food near its expiration dates, wipe off the dates and resell them to grocers. Photo Credit:  L. Marie
    And Bingo Was His Name-o
  • And Bingo Was His Name-o

    A man running bingo games to benefit several Queens, New York charities was indicted on 714-counts including charges related to gambling and fraud that amounted to over $800,000 over several years – profits that were promised to the Greek Orthodox Archdiocese of America. Spiros Moshopulos’ bingo hall first came under suspicion in 2008, when a tip to the Racing and Wagering Board alleged illicit side betting was going on. Photo Credit: Robert Banh
    How to Give Well
  • How to Give Well

    Keeping track of who's asking and what's done with a donation can be challenging, but many sites can help sort things out. One way to verify that certain groups are legitimate is to check the Charity Navigator site or the Better Business Bureau. Both provide backgrounds on hundreds of charities, including tax status, governance, financial statements and other information. And both sites provide tips for avoiding the many scams that aim to exploit the well-intentioned. The FBI also has a tip sheet for avoiding charity fraud. Be generous, but pay heed! Photo Credit:  cliff1066™
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