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NEWARK
– The Office of the Attorney General
and the Division of Consumer Affairs have
filed suit against a Cedar Grove resident,
charging him with soliciting vehicle donations
by falsely posing as a charity and misrepresenting
the value of vehicles to donors seeking
tax deductions.
Filed
in State Superior Court in Essex County,
the four-count complaint charges Steven
Ashley with violating the State’s
Charitable Registration and Investigations
Act and Consumer Fraud Act.
According
to the complaint, undercover investigators
from the Division of Consumer Affairs in
mid-2009 twice responded to advertisements
soliciting charitable car donations for
Ray of Hope – a New York-registered
charity whose stated purpose was “to
provide medical, educational and cultural
assistance and benefits to children and
the disabled.” In both instances,
Ashley misrepresented that he was soliciting
car donations for the benefit of Ray of
Hope when, in fact, the donated cars were
to benefit his own North Carolina used car
dealership. As stated in the lawsuit, Ashley
also told the investigators that they would
receive cash plus a vacation trip, as well
as a tax deduction in excess of the value
of the vehicle.
In
addition to concealing the true purpose
of the solicited vehicle donations, Ashley
allegedly failed to disclose to the investigators
certain IRS requirements relating to the
amount that a donor is able to deduct. The
IRS requires a written appraisal of the
donated vehicle for a tax deduction. Also,
the value of the cash and vacation given
to the donor would need to be reported to
the IRS and would reduce the amount of the
tax deduction. According to the complaint,
Ashley unlawfully withheld those material
facts.
“Charitable
donors and legitimate charities were both
harmed by Mr. Ashley’s alleged actions,”
Attorney General Paula T. Dow said. “Ashley
dangled the lure of a large tax write-off,
which donors in reality could not obtain,
and other enticements to generate vehicle
donations.”
Ashley
used an alias and a North Carolina dealer
license plate when he arrived to take possession
of the vehicle being donated by an undercover
New Jersey Consumer Affairs investigator
in July. Investigators later observed another
vehicle with North Carolina dealer plates
in the driveway of Ashley’s Cedar
Grove home.
When
asked under oath what happened to the cars
he acquired from donors, and why he used
North Carolina dealer plates, Ashley invoked
his right against self-incrimination and
refused to answer the questions.
“In
these times, consumers are regularly bombarded
by mailings, ads, and billboards –
all asking them to make tax-deductible donations.
Unfortunately, some of those are for illegitimate
charities that exist only to bilk the public,”
said Thomas R. Calcagni, Acting Director
of the Division of Consumer Affairs. “We
will vigorously pursue any fraud operator
that deliberately misrepresents fundraising
intentions or solicits charitable funds
for phony causes.”
As
explained in the complaint, Ray of Hope,
also known as the International Foundation
for Children and the Disabled, never employed
Ashley. Irina Shvartser, an official with
Ray of Hope, stated that while Ashley had
at one point donated his time to the organization
to assess the condition of vehicles, he
had no connection to Ray of Hope as of March
2008.
Ray
of Hope was an unregistered charity when
it operated in New Jersey between 2005 and
2009. Under terms of a Consent Order issued
last month, Shvartser is barred from soliciting
donations in New Jersey for the next five
years. She also paid to the state $17,500
in civil penalties and investigative costs.
As
the holiday season approaches, consumers
who are considering donating are reminded
to make sure that the organization they
are giving to is a legitimate charity. The
Division of Consumer Affairs maintains a
list of all charities registered to solicit
and accept donations in New Jersey. That
list can be accessed online at www.njconsumeraffairs.gov/charity/chardir.htm
Deputy
Attorney General Joshua T. Rabinowitz of
the Consumer Fraud Prosecution Section is
representing the state in this matter. The
investigation was handled by Investigators
Patrick Mullan and Michelle Davis of the
Division of Consumer Affairs.
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