NEWARK
– Attorney General Jeffrey S. Chiesa
and the New Jersey Division of Consumer Affairs
have filed suit against a North Jersey telemarketing
company that allegedly solicited unsuspecting
New Jersey residents on behalf of charities
that are not registered in New Jersey; and
that failed to keep financial records, required
by law, to ensure that solicited donations
actually are provided to charities and used
for charitable causes. According
to the State’s seven-count civil complaint
filed in Essex County, Paul J. Grossi, of
Towaco, is the owner and operator of PJG
Enterprises, LLC, with business addresses
in Fairfield and Towaco. Grossi and PJG
allegedly function as a paid fundraiser
for charities even though, in violation
of New Jersey’s Charities Registration
Act and Charities Regulations, they are
not registered with the State and have not
provided financial records or other documents
required to ensure the integrity and transparency
of charities and their paid fundraisers.
Using
a “boiler room” setting, Grossi
and PJG employ teenage telemarketers to
solicit consumers in New Jersey and elsewhere,
according to the complaint. In their phone
calls to consumers, the telemarketers claim
they represent charities with missions to
help cancer patients, missing children,
American veterans, or police officers.
Grossi
also maintains post office boxes in New
Jersey, in several charities’ names;
and Grossi and PJG have access to funds
donated to charities, the State alleges.
However, like Grossi and PJG, none of the
purported charities are registered in New
Jersey as required by law. New Jersey consumers
therefore have no way of verifying whether
donations made through PJG actually reach
the charities, or of verifying how the charities
spend any money they do receive.
“When
consumers open their hearts and wallets
to what they think is a good cause, especially
in difficult economic times, they need to
know exactly how their money will be used,
and how much of their donation will actually
help people in need,” Attorney General
Chiesa said. “When so-called charities
and their fundraisers violate our transparency
laws, they violate the trust of donors.”
The
complaint notes that the State’s initial
report about Grossi and PJG came from the
parent of a 17-year-old female employee,
who was concerned about the “salacious
dress code” Grossi demanded of his
young female telemarketers. When Consumer
Affairs investigators inspected PJG’s
business premises in Fairfield, they noted
that all of the telemarketers appeared to
be teenage girls.
Paid
fundraising companies, like the charities
they represent, are required to register
with the Division of Consumer Affairs and
provide detailed, annual records of their
fundraising activities. Additionally, they
must file annual registration records for
each individual employee who works as a
paid fundraiser; and must provide copies
of all contracts with the charities for
whom they raise funds. If a fundraising
company has custody of, or access to, funds
raised on behalf of a charity, it must post
a bond with the Attorney General’s
Office.
Grossi
and PJG are accused of violating each of
these requirements. PJG has not been registered
with the Division since June 30, 2009. Grossi
and PJG failed and refused to provide any
of the required records to the Division
of Consumer Affairs or its investigators,
even when required by subpoena.
“We
urge consumers to ‘Investigate Before
You Donate,’” Sharon Joyce,
Acting Director of the New Jersey Division
of Consumer Affairs, said. “Telemarketers
who ask for your money to help sick children
or American veterans are not always telling
the truth. Even if the person is calling
from an organization that has duly registered
with the State, you should always ask how
much of your donation will go toward real
charitable programs, and how much will go
into the pockets of a fundraiser. Call the
Division of Consumer Affairs; we can help
you make better-informed decisions about
charitable giving.”
According
to the complaint, Grossi and PJG solicited
funds on behalf of purported charities called
“American Breast Cancer Federation,”
“American Veterans Foundation,”
“Association for Police Officers,”
“Breast Cancer Assistance Network,”
“Children’s Cancer Assistance
Network,” “Operation Lookout
for Missing Children,” and “Our
American Veterans.” None of these
supposed charities is registered with the
Division of Consumer Affairs, and there
is no exemption from registration that would
apply to them.
The
State alleges that telemarketers working
for Grossi and PJG were given a script that
read, in part: “This is the American
Breast Cancer Federation. … We are
having an annual fund drive to help provide
free mammograms and life-saving diagnostic
tests to women who can’t afford them.
Our top levels are the Gold $200, the Silver
$100, and the Bronze $75. Can you help provide
free mammograms to women who can’t
afford them with one of our top levels?”
If the potential donor refused, the script
called upon the telemarketer to continue:
“I understand our boosters are more
popular; they are just $55, $45, or $35.
Can you help provide life-saving diagnostic
tests to women who can’t afford them
with one of our boosters?”
According
to the complaint, Grossi maintains post
office boxes in the names of various charities,
and collects the mail at those boxes. He
maintains two post office boxes in Pompton
Lakes, in the name of “American Breast
Cancer Federation” and “Donor
Response Center,” and two in Lincoln
Park in the name of the “American
Federation of Police Officers” and
“Children’s Cancer Assistance
Network.”
The
Complaint notes that American Breast Cancer
Federation is owned by an Ohio resident,
who has a contract with Grossi and PJG –
but the contract limits PJG’s solicitation
to the State of Nevada. Nevertheless, Grossi
and PJG have solicited funds in New Jersey.
The phones used by telemarketers were programmed
each day to call potential donors in different
states, including New Jersey. A substantial
number of pledge cards filled out by telemarketers,
and maintained by PJG, include the names
and addresses of New Jersey residents who
agreed to make donations.
The
State’s lawsuit seeks full restitution
to any consumers who made donations in response
to Grossi’s and PJG’s solicitations,
as well as civil monetary penalties. The
lawsuit also asks the Court to freeze Grossi’s
and PJG’s assets, and authorize the
Division to seize and impound all documents,
files, records, computers, and other items
relating to PJG’s business affairs.
The
State Division of Consumer Affairs encourages
New Jersey consumers to “Investigate
Before You Donate” and learn about
charities before making a donation. For
example:
-
Find out whether the charity is
registered in New Jersey, or
is exempt from having to register. (Certain
religious and educational organizations,
and charities whose annual income includes
less than $10,000 in public contributions
and fundraising, are exempt from having
to register with the State).
-
Find out how much the charity
spent during recent fiscal years on program
costs, management costs, and
fundraising.
-
Learn about the charity’s stated
mission.
-
Consumers may obtain information
about a charity in several ways.
They can ask the charity itself (reputable
charities encourage you to do so); visit
the charity's website; visit the New Jersey
Division of Consumer Affairs' Charities
Registration page at www.NJConsumerAffairs.gov;
or call the Division's Charities Hotline
at 973-504-6215 during
regular business hours.
Consumers
who suspect a charity or business has violated
New Jersey’s consumer protection laws
can file a complaint with the State Division
of Consumer Affairs by visiting its website
or by calling 800-242-5846
(toll free within New Jersey) or 973-504-6200.
Follow
the Division of Consumer Affairs on Facebook,
and check our online calendar of upcoming
Consumer
Outreach events.
Deputy
Attorney General Anna Lascurain is representing
the State in this matter. Chief Investigator
Lawrence J. Biondo and Investigator Raquel
L. Williams, of the Division of Consumer
Affairs’ Office of Consumer Protection,
Charities Enforcement Unit, conducted the
investigation.
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