DENVER – Colorado Attorney General John W. Suthers today announced that his office has reached out-of-court settlement agreements in a trio of charitable fraud cases. Settlements were struck with Colorado Children’s Assistance Center and its founder and director, David Michael St. John; Front Range Charitable Services and its president, Colleen Gardenour Holmes; Veterans for the Homeless, Inc. and its officers, Jay Wyss and Rhett Cline; and Hernando Hennings, who worked for two of the charities as a paid solicitor. The three charities solicited donations from hundreds of consumers throughout the Denver Metro Area between 2001 and 2005, with total solicitations in excess of $430,000.
“Coloradans are generous and charitable people,” commented Attorney General Suthers. “Those who take advantage of others’ generosity are disgraceful, and we in law enforcement will continue to make every effort to weed them out.”
The Attorney General secured settlement agreements barring the charities and their fundraisers from ever again soliciting donations in Colorado, imposing total of $50,000 in penalties, and requiring a combined $80,000 in consumer restitution. Additionally, the Boulder District Attorney filed criminal charges against Rhett Cline and Jay Wyss. The two men are paying criminal restitution and are currently serving probation as a result of those cases.
Each of the three cases shared similarities in the type and method of fraud. The three companies allegedly paid solicitors to call Coloradans and request donations, often thousands of dollars at a time. Between 50 and 80 percent of donations were funneled directly to the solicitors, who often were not registered as such with the State. Colorado law requires any paid solicitor to be registered. Most of the remaining funds were allegedly misappropriated by the defendants for personal uses – including paying utility bills, lending to relatives, and funding vacations to Las Vegas, among other locations.
Veterans for the Homeless claimed to provide rental monies, food, clothing, and employment assistance to families with children, single mothers, and veterans. Colorado Children’s Assistance Center told consumers that their donations would be spent on school supplies, food, and holiday gifts for needy children. Front Range Charitable Services stated that donations would provide emergency services to local residents in crisis, including food, shelter, clothing, healthcare kits, and school supplies.
Each of the charities fell in and out of registration compliance with the State, but all three were accused of soliciting donations regardless of whether their registrations were current. The Attorney General also alleged that the charities falsely told consumers that the donations were tax deductible, when, in fact, they were not.
The lawsuits arose out of an investigation by the Boulder County District Attorney’s Office after the charities solicited more than $20,000 from an 84-year old woman in Boulder County. In August of 2006, the DA’s investigation led to lawsuits by the Attorney General.
To avoid charitable fraud, consumers should keep themselves well-informed when making donations. Before donating, check a charity’s registration on the Secretary of State’s website at www.sos.state.co.us/ccsa/, or go to the Better Business Bureau’s “Wise Giving Alliance” at http://www.bbb.org/us/charity/. Additionally, consumers should review “Tips for Wise Giving” (attached) for general guidance on donating wisely and safely to those in need.