In a unanimous 5-0 decision, the Hawai‘i Supreme Court ruled that the
Hawai‘i Attorney General was fully authorized to issue a subpoena to obtain the bank
records of the non-profit organization KAHEA: The Hawaiian-Environmental Alliance, to
determine whether KAHEA’s solicitation and use of funds to support direct actions to
prevent construction on Mauna Kea violated laws and regulations governing nonprofit
organizations.
“The Attorney General takes seriously its important duty under the law to ensure that
non-profit organizations, which obtain financial benefits from tax exemptions and
solicitation of tax-deductible donations, comply with the law,” Attorney General Clare E.
Connors said. “It is the obligation of the Attorney General to investigate when it appears
organizations may be using their ‘taxpayer-funded subsidy’ in contravention of
longstanding federal and state law regulating activities that are supposed to serve the
public interest.”
In the case of In re Investigation of: KAHEA, the Supreme Court ruled that the Hawai‘i
Attorney General has a duty to “represent the public interest in the protection of
charitable assets,” and that a determination of whether an investigation into non-profit
organizations is in the public interest rests solely with the Attorney General. The
Supreme Court refused to quash the subpoena and rejected arguments that the
subpoena violated KAHEA’s First Amendment rights. In its opinion, the Court held that
the Attorney General’s ability to issue subpoenas in the public interest “rests squarely
with the Attorney General. Not with KAHEA. And not with this court.”
The Supreme Court’s decision affirms the well-established understanding that, in
exchange for considerable tax-benefits subsidized by all taxpayers, non-profits are
subject to the broad investigatory oversight of the Attorney General and to the many
investigatory tools available to ensure compliance with the law
Attorney General John M. Formella announces that the Director of Charitable Trusts has filed a civil action seeking an injunction to prevent the Fab Family Fund and members of its board of directors from operating a charitable organization and from engaging in charitable solicitations.
The Fab Family Fund, a New Hampshire nonprofit corporation, purports to be a charitable organization, but its board members have failed to comply with their obligations under New Hampshire law to register with the New Hampshire Attorney General, Director of Charitable Trusts, and to respond to repeated requests for information and administrative subpoenas issued by the Director. The Complaint, filed in Rockingham County Superior Court, names as defendants Shanna Pinet a/k/a Dr. Fabianna Marie, currently the chief executive officer of the Fab Family Fund, David Pinet, treasurer of the Fab Family Fund, and Michelle Tolson, president of the Fab Family Fund.
Since at least February 2020, the Fab Family Fund has held numerous fundraisers and solicited donations through its Facebook page and its website “to educate, facilitate and grant Breast Cancer Thrivers and their families an all expense paid trip for solace and healing.” The Fab Family Fund claimed on its Facebook page and website that it was “an established 501(c)(3) organization” or a “501(c)(3) nonprofit,” but according to the Internal Revenue Service website, it has not received recognition by the Internal Revenue Service as exempt under 501(c)(3) of the Internal Revenue Code.
The Director of Charitable Trusts has alleged that the Fab Family Fund, Shanna Pinet, David Pinet, and Michelle Tolson have violated four separate New Hampshire charitable trust laws and is seeking from Shanna Pinet, David Pinet, and Michelle Tolson restitution to the donors, attorneys’ fees and costs of the investigation, and $10,000 in civil penalties for each violation of state law. The Director is also seeking dissolution of the Fab Family Fund as a charitable organization and an injunction, preventing Shanna Pinet, David Pinet, and Michelle Tolson from engaging in charitable solicitations on behalf of the Fab Family Fund and from serving as an officer or director of any charitable organization in New Hampshire for a period of ten years.
Register Now for the 2021 NAAG/NASCO Annual Charities Conference
| This year’s NAAG/NASCO Charities Conference will be held virtually on the afternoons of October 13 and 14, 2021. The conference is the only annual event at which charity regulators and nonprofit organizations and their attorneys, accountants, fundraisers, and advisers have the opportunity to meet, hear about, and discuss issues of interest to the charitable sector. The sessions on Wednesday, Oct. 13 are open to the public and provide an opportunity to hear from regulators and others in the nonprofit sector on issues of current relevance, including sessions on Fundraising and Governance: The Impact of COVID and A Brave New World of Working Together: State Law Questions Surrounding Arrangements Between Charities and Non-Charities. There will also be the opportunity for attendees to have discussions in small groups. Finally, there will be a panel of elected officials tasked with the regulation of charitable entities and assets. The agenda is subject to change; we plan to keep the website updated as the agenda is further developed. View Draft Public Day Agenda The sessions on Thursday, Oct. 14 are open to attorney general staff, other NASCO members, and other government regulators only. Click here for a skeleton agenda for the government staff only day. Early registration is recommended as space is limited. The program will be held on Zoom. There is no cost for attorney general staff or other NASCO members to attend this conference. Attorney general staff must be logged into their NAAG account to receive free registration. Other NASCO members will need a code to register for free (please email Carter McCoy at cmccoy@naag.org for the code). Other government employees and the public will be charged a $25.00 registration fee. The registration deadline is Friday, October 8, 2021. *If you have created your NAAG account and do not see the correct pricing listed, please make sure you have entered your organization under your profile. Attorney general staff will need to wait until after your account is verified by your office before being able to register for this event. Register Today |
| The 2021 NAAG/NASCO Annual Charities Conference is coordinated by the National Association of State Charity Officials and the the NAGTRI Center for Consumer Protection, whose mission is to assist and enable state and territory attorneys general in protecting the public in the areas of consumer protection and charitable asset and entity oversight by providing information, technical assistance, and support; facilitating cooperation among attorney general staff through open dialogue and advanced communication systems; planning, organizing, and conducting training and seminars for the exchange of ideas and information on relevant matters; and promoting the development of effective programs and education for the protection of the public. Please check out the Center’s consumer-facing website at ConsumerResources.org. |
Attorney General Ellison wins $954,966 judgment and permanent ban against company Contributing 2 Combatants and its owner for bilking charitable donations intended for the military
State’s lawsuit alleged that Jacob Choinski used his for-profit company, Contributing 2 Combatants, to solicit donations from Minnesotans door to door while posing as a charity and kept the donations to line his own pockets.
Minnesota Attorney General Keith Ellison today announced that his Office has obtained a judgment of $954,966 against a Minnesota company that calls itself Contributing 2 Combatants and Coast 2 Coast Marketing, and its owner, Jacob Choinski, for violating charitable solicitation and consumer protection laws by defrauding Minnesota donors. Formally named PNW C2C Marketing, LLC (“C2C”), the company went door to door in Minnesota neighborhoods and misrepresented that C2C was a nonprofit soliciting donations to send care packages to servicemembers overseas. Choinski then spent the funds collected for his personal use and did not spend a single dollar on care packages since C2C’s inception in July 2018. The default judgment obtained by the State also permanently bans C2C from doing business in Minnesota and Choinski from any involvement in Minnesota’s nonprofit sector.
“Choinski’s conduct in this case was reprehensible. He used C2C to take advantage of Minnesotans who wanted to help our military servicemembers who are actively defending our country,” Attorney General Ellison said. “Our servicemembers overseas are making sacrifices for us every day and we will not stand by and allow their sacrifices to be exploited. This judgment ensures that Choinski and C2C can never engage in this conduct again.”
C2C is a for-profit Minnesota limited liability company that advertised the cost of shipping a care package to service members overseas through door-to-door solicitation. While soliciting, however, C2C deceptively represented itself as a nonprofit by asking Minnesotans for donations and telling Minnesotans that their donations were tax deductible. C2C also claimed to partner with a charity to which it provided funds from its sales, but the State discovered that it never provided any funds to that nonprofit. Instead, Choinski diverted all the funds solicited for his personal use. The AGO’s judgment of $954,966 includes $70,966 in restitution for Minnesotans who were successfully solicited by C2C since its inception in 2018. The remaining $884,000 are civil penalties that must be paid to the State.
C2C solicited throughout the Twin Cities metro area, greater Minnesota, and other states. The lawsuit was filed in Ramsey County District Court and asserted that C2C and Choinski violated Minnesota’s Charitable Solicitation Act, the Uniform Deceptive Trade Practices Act, and the Consumer Fraud Act.
Consumer Corner: Be wary of charity scams during times of humanitarian crisis
From the Desk of Kansas Attorney General Derek Schmidt. We all have been touched in some manner by the events unfolding across the globe in recent weeks and the level of human suffering. From Hurricane Ida to an earthquake in Haiti to the evacuation of thousands in war-torn Afghanistan and the struggles of some of our nation’s veterans, the needs of those less fortunate are apparent. And while we all would like to give generously to ease their pain, it is important to exercise caution when calls for help arrive by phone, email or text.
Our office has seen all too often the tricks that scammers and fraudsters play on generous Kansans, asking for a contribution that purports to be going to help those who have lost their homes and belongings, or who are in need of food and medical supplies. Recently, our attorneys assisted with shutting down some scammers based in Michigan, purporting to be fundraising in support of homeless veterans, children with autism, victims of house fires and breast cancer patients, and getting the funds in the hands of the bona fide organizations doing that work.
Here are some tips to help you give safely:
- Support local, established charities. While there are many large, international organizations that do great work, your donations can often have a greater impact when they support a cause close to your community, where you can see the results of your donations.
- Watch out for names that sound alike. Scammers often make their organizations’ names sound very similar to other well-known charities.
- Be careful with telemarketers requesting contributions. Oftentimes, the telemarketer keeps a substantial portion of the donation. If you have questions about a solicitation, don’t be afraid to reach out to the charity directly.
- Ask questions to find out where your donations go. Ask for written information, including how much of the money raised is actually used for charitable purposes and how much will end up in the hands of the professional fundraiser.
- Ask if your donation is tax deductible. Not all donations to charities are tax deductible. You can check a charity’s status with the IRS at www.irs.gov. When in doubt, double-check with your tax preparer before assuming a donation will be tax deductible.
- Document your donation. Make the donation by credit card or check – not cash, wire transfer or gift card. A solicitor that asks for payment by wire transfer or gift card is a red flag for scams. If something doesn’t feel right to you, consider donating to a different cause. If you pay by check, make the check payable directly to the charitable organization, not to the fundraiser soliciting the donation. Ask for a receipt to show the amount of the donation and if you specified your donation toward a specific project.
The safest way for Kansans to avoid charities fraud is to take control of their own charitable giving. Rather than responding to solicitations for money that arrive by telephone, in the mail, by email or otherwise, Kansans who wish to support charitable causes should develop their own proactive giving plan and give directly to the charities of their choice. Not only can this help avoid fraudsters but it also eliminates the costs charged by professional fundraisers, instead ensuring every penny of a contribution goes to the charitable purpose itself rather than fundraising expenses. In addition, giving to well-established local charities can maximize the benefit of each contribution and help avoid scams.
The Kansas Charitable Organizations and Solicitations Act (KCOSA) requires most charitable organizations to register with the state prior to soliciting. Examples of those exempt from registration include religious organizations, fraternal, patriotic, social, educational, alumni organizations and historical societies. Professional fund raisers and solicitors working for the charitable organization also must register. Consumers can call (785) 296-3751 or visit the charities registration page at www.ag.ks.gov/charities to check whether a charity is registered.
The Office of the Attorney General is responsible for enforcement of the KCOSA and protecting consumers from fraudulent charitable and solicitation activities. More information on staying safe from scams is available on the attorney general’s consumer protection website at www.InYourCornerKansas.org. If you suspect a charity scam or fraud, or any other violation of charitable solicitation laws, you can file a complaint with our Consumer Protection Division online at the aforementioned website or by calling (800) 432-2310.