AG’s Office cracks down on phoney charities

New Jersey Youth Club, Inc. (NJYC) and a related organization, “New Jersey Youth Club of America A NJ Nonprofit Corporation” (NJYC of America), will cease operations, stop soliciting charitable contributions, and turn over their recently collected contributions to the New Jersey Division of Consumer Affairs, pursuant to a Final Consent Judgment, according to the state Attorney General’s Office.

“These organizations callously took advantage of the generosity of New Jerseyans by allegedly posing as charities and claiming to serve at-risk youths,” said Acting Attorney General John J. Hoffman. “The reality, we allege, is that they were serving themselves by applying most of the donations they collected to a for-profit business.  We have shut down this charade.”

The Consent Judgment resolves the State’s First Amended Complaint, which alleged that NJYC and NJYC of America violated New Jersey law by soliciting charitable contributions – purportedly for underprivileged youth – without being registered as charitable organizations, and without applying the vast majority of the funds to their stated charitable purpose.

The organizations represented on the NJYC website, and through youth members who conducted door-to-door solicitations throughout the State on their behalf, that contributions from the public would be applied to mentoring programs and positive recreational activities for at-risk youths.  Instead, the Division alleged that most of the donated funds were transferred to Big Apple Confectionary, Inc., a New York-based for-profit business.

“New Jerseyans believe in helping those in need,” Division of Consumer Affairs Acting Director Steve Lee said.  “However, before making a donation, be sure to investigate whether a charity is legitimate and registered with the Division of Consumer Affairs, and isn’t yet another scam preying on your good intentions and generosity.”

Acting Director Lee noted that today’s announcement follows the Division’s April 29, 2015 alert that New Jerseyans should “Investigate Before You Donate” and avoid charity scams when seeking to donate for victims of the devastating earthquake that struck Nepal.

NJYC and NJYC of America operated interchangeably, according to the State’s Complaint.  They solicited contributions by sending youth members door-to-door in various neighborhoods, where they sold cookies or other merchandise made by Big Apple Confectionary.  Through their solicitation materials and the NJYC website, the organizations represented that these sales constituted charitable contributions.  Of the approximately $191,171.38 donated in 2012 and 2013, however, the Division noted that the vast majority appeared to have been transferred to Big Apple Confectionary’s bank account.

Under the Consent Judgment announced today, NJYC and NJYC of America agreed to, among other things, dissolve their operations, stop dispatching youth members to conduct door-to-door solicitations in New Jersey, and turn over to the Division all available contributions collected on the organizations’ behalf – including $1,111.85 in check contributions.  The Division will return these check contributions to the consumers.

The Consent Judgment also includes a settlement payment of $52,620.31 to reimburse the State’s investigative and legal costs.  However, given the defendants’ representations as to their financial status and inability to pay, this amount will be suspended and vacated after two years so long as the defendants comply with the settlement terms.

 

AG’s Office cracks down on phoney charities