ST PAUL, Minn. — A Nevada-based charity has been banned from future fundraising activities, following a federal lawsuit brought by Minnesota Attorney General Keith Ellison, the Federal Trade Commission, and Attorneys General in the states of New York, New Jersey, and Virginia.
The suit alleges that owner Mark Gelvan and three others associated with Outreach Calling, Inc. "served as the primary fundraisers for a number of sham charities that were the subject of numerous law enforcement actions," according to a news release from the Minnesota Attorney General's office. The company is accused of scamming consumers out of millions of dollars.
“Charities and their fundraisers have a responsibility to use the donations they solicit in the manner that donors intend,” Ellison said in a statement. “Mark Gelvan and his associates exploited the generosity of Minnesotans through deception to enrich themselves. It’s my job to ensure Minnesotans aren’t taken advantage of. We will continue to pursue deceptive charitable fundraisers so that Minnesotans can be confident that the money they give is helping people in need.”
A complaint states that as much as 90% of the money raised by the group went to the defendants themselves.
The suit alleges that the defendants placed "millions" of calls that misrepresented how donations would be used, in many cases violating "do not call" requests of the targeted consumers.
Ellison's office said the four defendants worked together for nearly three decades, and some were previously banned in Minnesota in 2009 while operating under the name of a different company, Community Support, Inc.
The defendants face a $56 million monetary judgement in the case; however, prosecutors say that judgement is partially suspended based on inability to pay. Any funds collected or assets surrendered will be turned over to the State of New York, which will distribute the money to legitimate charities covering services similar to the ones promised in the false fundraising.
“This action puts fundraisers on notice: the FTC will not only shut down sham charities, it will aggressively pursue their fundraisers who participate in the deception,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “If you’re giving to charity and want to make sure your donations count, start at ftc.gov/charity to learn how to spot the scams.”