Funds From Allegedly Fraudulent Sandy Charity, Totaling $225,000, Distributed to Organizations That Will Assist Superstorm Sandy Victims, Following Action Filed by the Attorney General and Division of Consumer Affairs
NEWARK – Acting Attorney General John J. Hoffman today announced that donations previously made to the Hurricane Sandy Relief Foundation (HSRF), an unregistered charity whose principals allegedly misled donors in violation of the law, have been distributed to legitimate charitable organizations for the aid of Superstorm Sandy victims.
“In response to the suffering caused by Superstorm Sandy, donors flocked to this organization in the hope that their money would help storm victims and repair damaged communities,” Acting Attorney General Hoffman said. “Today, thanks to our investigation and enforcement action, we are ensuring that their charitable good intentions are being carried out.”
A total of $225,000 was distributed last week to four charitable organizations registered with the New Jersey Division of Consumer Affairs, and one charitable organization registered in New York State, specifically for the benefit of Sandy victims. The organizations were selected based on their proposals to specifically use the money to help Sandy victims, in accord with the representations that HSRF made to the public when soliciting donations. An additional $100,000 is under final review for distribution in the near future.
“Today’s announcement is a victory for donors who gave generously to help families whose lives were torn apart by Superstorm Sandy,” New Jersey Division of Consumer Affairs Acting Director Steve Lee said. “As we demonstrated in bringing charges against those involved in price gouging and other scams in Sandy’s wake, we will not tolerate anyone who seeks to profit from the suffering of others.”
The initial distribution of $225,000 from HSRF donations, was made to the following organizations:
• O.C.E.A.N., Inc., of Toms River, received $100,000 to construct 12 three-bedroom, single-family homes in Berkeley Township. The homes will be rented to Sandy victims. Placements will be made based on O.C.E.A.N. Inc.’s waiting list for rental housing, as well as on referrals from the Ocean County Long Term Recovery Group and Catholic Charities.
• The FoodBank of Monmouth/Ocean Counties, of Neptune, received $50,000 to support its network of food pantries that provide food for thousands of Sandy-affected families.
• The Alliance Center for Independence, of Edison, in partnership with South Carolina-based Portlight Strategies, Inc., received $50,000 for post-Sandy relief projects aiding individuals with disabilities. This will include providing durable medical equipment; the repair or replacement of lifts, elevators and ramps; and other equipment for internal and external accessibility needs.
• Graybeards, Ltd. Based in Rockaway, N.Y., received $25,000 for donations to Sandy-affected individuals in and near the Rockaway Peninsula. This proposal was selected because certain contributions to HSRF were earmarked for Superstorm Sandy relief in New York.
The Divisions of Consumer Affairs and Law filed suit in February 2013 against HSRF and its principals, John Sandberg and Christina Terraccino, alleging the defendants violated the Charitable Registration and Investigations Act, Charities Regulations and Consumer Fraud Act, among other things, by operating an unregistered charity, diverting donated funds into their personal accounts, and misrepresenting that donations where tax-deductible when HSRF did not have IRS 501(c)(3) tax-exempt status.
In June 2013, the State arrived at a settlement in which a court-appointed Organization Administrator took control of HSRF and its financial accounts in order to distribute all remaining donations and dissolve the organization. Under the court-approved settlement, Sandberg and Terraccino also are permanently barred from soliciting contributions in New Jersey for Superstorm Sandy relief and are barred, for a minimum of two years, from serving in a leadership position in any charitable organization in New Jersey.
Chief Investigator Laurie Goodman, of the Office of Consumer Protection within the Division of Consumer Affairs, conducted the investigation of this matter. Deputy Attorney General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section in the Division of Law, represents the State in this action. Nancy E. Kelly of NE Kelly & Associates, LLC has functioned as the Organization Administrator.
Advice for Consumers
The Division of Consumer Affairs encourages New Jersey consumers to learn as much as possible about any charity before deciding to make a donation. Consumers should:
• 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), or visit the charity’s website.
Consumers can also obtain this information from the New Jersey Division of Consumer Affairs. Visit the Division’s Charities Registration page; call the Division’s Charities Hotline at 973-504-6215 during regular business hours; or use the Division’s free “New Jersey Charity Search” smartphone app.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.