Texas Attorney General Ken Paxton issued Civil Investigative Demands (CIDs) to GoFundMe Inc. to investigate potential violations of the Texas Deceptive Trade Practices Act (DTPA). The crowd-funding platform’s integrity has come into question after it removed a multimillion-dollar fundraising campaign for the Canadian truckers “Freedom Convoy” which is protesting vaccine mandates.
Court Finds The Fab Family Fund, Inc., Shanna Pinet a/k/a Dr. Fabianna Marie, and David Pinet Violated Charitable Trusts Laws and Orders an Injunction, Restitution, Attorneys’ Fees, and Civil Penalties
Attorney General John M. Formella announces that on January 4, 2022, the Rockingham County Superior Court ruled that The Fab Family Fund, Inc., Shanna Pinet, and David Pinet violated laws pertaining to charitable organizations, including deceptive fundraising, breach of fiduciary duties, and failure to comply with an administrative subpoena.
In September 2021, the Charitable Trusts Unit filed a civil complaint against The Fab Family Fund, Inc., a New Hampshire nonprofit corporation, Shanna Pinet a/k/a Dr. Fabianna Marie, the chief executive officer of The Fab Family Fund, and David Pinet, treasurer of The Fab Family Fund. The complaint alleged that the charity and the board members failed to comply with their obligations under New Hampshire law to register with the New Hampshire Attorney General. In addition, the lawsuit alleged that Shanna Pinet and David Pinet engaged in deceptive fundraising, breached their fiduciary duties to the charity, and unlawfully failed to respond to repeated requests for information and administrative subpoenas.
Specifically, the complaint alleged, among other things, that The Fab Family Fund claimed on its Facebook page and website that it was a “501(c)(3) nonprofit,” but it did not receive such recognition from the Internal Revenue Service. The complaint also alleged that the organization conducted many fundraisers, including a “zoom chat” with “Dr. Fab, the Naturopathic Doctor,” on “Demystifying Breast Cancer,” but Shanna Pinet a/k/a “Dr. Fab” was not licensed as a naturopathic doctor in New Hampshire or elsewhere in the United States. There is no evidence that any funds raised actually supported the organization’s mission to “educate, facilitate and grant Breast Cancer Thrivers and their families an all-expense paid trip for solace and healing.”
On November 10, 2021, the Court issued a notice of default against the defendants and on January 4, 2022, the Court granted the Motion for Entry of Final Judgment. The Court ordered that The Fab Family Fund be dissolved as a New Hampshire voluntary corporation. In addition, the Court ordered that Shanna Pinet and David Pinet be permanently enjoined a) from holding any position of authority with any New Hampshire charitable organization and b) from establishing or working for any nonprofit organization related to breast cancer for a period of ten years. The Court ordered that Shanna Pinet and David Pinet pay $5,794 in restitution, $15,287 to the Attorney General for attorneys’ fees and costs, and $40,000 in civil penalties.
Attorneys Thomas Donovan and Diane Quinlan of the Charitable Trusts Unit prosecuted the case.
The Charitable Trusts Unit, under the direction of the Attorney General, exercises all the common law and statutory rights, duties and powers in connection with the supervision, administration and enforcement of charitable trusts, charitable solicitations, and charitable sales promotions. Visit www.doj.nh.gov/charitable-trusts for information about the Charitable Trusts Unit and resources for charities and executives.
AG Healey Reaches $6 Million Settlement With Former Head of Homeless Shelter for Lying to the State and Funneling Money to Himself
Manuel Duran Formerly of Casa Nueva Vida to Pay Nearly Treble Damages and is Banned from Working with the Shelter and the State
The former executive director of Casa Nueva Vida (CNV), a publicly-funded nonprofit homeless shelter with locations in Boston and Lawrence, will pay $6 million to settle allegations he abused his position to improperly funnel state money to himself, all while falsely certifying compliance with state regulations designed to detect such improper self-dealing, Attorney General Maura Healey announced today.
The consent judgment, filed and entered in Suffolk Superior Court on Wednesday, resolves a civil lawsuit filed by the AG’s Office – less than four months ago – in September against Manuel Duran, the former Executive Director, Chief Executive Officer, President and Board Member of CNV. The lawsuit alleged Duran violated the Massachusetts False Claims Act by making false statements and material omissions on documents submitted to the state in which he failed to disclose his related party transactions. According to the AG’s Office, Duran signed leases on CNV’s behalf for investment properties he owned, charged CNV substantially above fair rental value, and directed CNV to utilize funding it received from the state to pay for improvements to properties he owned.
“Manuel Duran abused his position of trust to pad his pockets with millions of dollars that should have gone to families in need,” AG Healey said. “Our office moved quickly to reach today’s settlement which holds him accountable for the harm done and returns nearly three times amount of money he stole from the state.”
Starting in March 2003, Duran served in various leadership roles at CNV that allowed him to control the shelter’s day-to-day operations, as well as its real estate investments and leases. The AG’s Office alleges that from fiscal year 2014 through 2019, when CNV was at least 92 percent state funded, Duran caused CNV to submit documents to the state that failed to disclose Duran’s own personal or business transactions with CNV, known as “related party transactions.” Under state law, CNV was required to disclose any related party transactions to assure the state that it was engaging in transactions on an arm’s length basis and was spending state funds in a fair and reasonably prudent manner. By not disclosing information regarding his related party transactions with CNV, Duran made it impossible for the state to evaluate CNV’s continued eligibility as a contractor and enabled CNV to receive $33 million in state funding under a contract with the Department of Housing and Community Development for emergency homeless shelter services.
The AG’s complaint alleged Duran funneled approximately $2.29 million in state funds to himself through his illegal actions, but because this case was brought under the state’s False Claims Act, which allows for up to treble damages, Duran will pay the state $6 million.
Under the terms of the AG’s settlement, in addition to the required $6 million payment, Duran is permanently banned from working with CNV; accepting any position as a fiduciary at any Massachusetts public charity; working on or with any business connected to the state or a state entity or any business that receives funding from the state; and from forming a separate entity or operating under a different name in order to violate the AG’s consent judgment.
In September, Duran was also criminally indicted by a Suffolk County Grand Jury in connection with stealing from CNV and lying under oath to hide his self-dealing. The AG’s criminal case against Duran is ongoing.
This civil case was handled by Assistant Attorney General Mary-Ellen Kennedy and former Special Assistant Attorney General Coleman Gay, with assistance from Assistant Attorney General Matt Douglass, Division Chief Amy Crafts, and Paralegal Cara Bradley, all of AG Healey’s False Claims Division, as well as Senior Investigator Marlee Greer and Edward Cherubin of the Civil Investigations Division.
The False Claims Division was created by AG Healey to safeguard public funds and promote integrity and accountability in public contracting. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600.
As Californians Give Their Time and Money This Holiday Season, Attorney General Bonta Issues Charity Consumer Alert, Volunteers With APLA Health in Los Angeles
Today in Los Angeles, California Attorney General Rob Bonta joined APLA Health to share tips and resources on how to avoid scams while donating this holiday season. Attorney General Bonta has the primary responsibility for supervising charities and the professional fundraisers who solicit on their behalf in California. Under Government Code section 12598, the Attorney General may investigate and bring legal actions against charities that misuse charitable assets or engage in fraudulent fundraising practices. In providing today’s tips, Attorney General Bonta encourages donors to take the necessary steps to ensure that their donations get into the correct hands.
“Nearly one million Angelenos will continue to struggle with food insecurity this year. Throughout our state, Californians come together to support organizations like APLA Health, who are helping combat this issue by providing families in the Los Angeles region with groceries through their Vance North Necessities of Life Program,” said Attorney General Bonta. “As you take part in donating your time and money to help those in need, make sure to do your research so that your contributions go to legitimate organizations, like APLA Health. As Attorney General, my office is committed to protecting donors from deceptive solicitations. You can help our efforts by taking essential steps in researching charities before giving this holiday season. If you believe that a charity or fundraiser has acted in bad faith, please report it immediately at oag.ca.gov/charities/complaints.”
“For 35 years APLA Health’s Vance North Necessities of Life Program (NOLP) food pantries have provided over 17,000,000 meals for people living with HIV/AIDS, the largest program of its kind in the country,” said Craig E. Thompson, CEO of APLA Health. “In these times of great need, It is more important than ever that people make sure they are contributing to legitimate charitable organizations to ensure their donations are going to those who legitimately need help.”
Donation Tips
- Check the Registration Status: Charities operating in California and telemarketers soliciting donations in California are required to register with the Attorney General’s Registry of Charitable Trusts. They are also required to file annual financial reports, which are made available to the public. Prior to making a donation, make sure to confirm that the charity is registered and up-to-date with its financial reporting by searching the Attorney General’s Registry of Charitable Trusts’ database, located here.
- Give to Organizations You Trust: Do your research before giving. Review the charity’s purpose and find out how the charity spends its donations. How much is spent directly on the charitable cause? How much goes to overhead and employee compensation? Research charities in your community and support those charities that make a positive impact. If you choose to donate to a charity you are unfamiliar with, contact the charity and ask for information in writing about its programs and finances. You should also confirm the charity’s name, address, and its nonprofit status.
- Be Wary of Social Network Fundraising: If you are planning to donate through a social network solicitation, first do some research. Find out what percentage is going to the charity, whether you will be charged a fee, or if a percentage of your donation will be paid to the platform website.
- Don’t Be Pressured by Telemarketers – Ask Questions Before Donating: If you receive a call from a telemarketer, ask for the name of the fundraising organization, whether it is registered with the Attorney General’s Office, the name of the charity benefitting from the solicitation, how much of your donation will go to charity and how much to the telemarketer, and the direct telephone number of the charity. If the telemarketer tells you the donation is for your local animal shelter, hospital, school, police, firefighter, or other public safety agency, check directly with the benefitting organization to confirm that it authorized the solicitation and will actually benefit from your donation. Don’t fall for pressure tactics or threats. Remember that you have the right to reject the donation appeal and if you feel pressured or threatened, just hang up.
- Be Vigilant When Donating After Natural Disasters or Tragedies: Well-intentioned or otherwise, charities are sometimes formed overnight to address calamities. As a result, oftentimes they lack the experience, contacts, and staff needed to respond to a disaster. Fraudsters are always seeking to capitalize on people’s desire to help. Even during a crisis, make sure to take your time to research a charity before giving.
- Watch Out for Similar-Sounding Names, Web Addresses, and Other Deceptive Tactics: Fraudulent organizations may use names that closely resemble those of well-established charitable organizations in order to mislead donors. Look out for fraudulent websites that have a slightly different web address (URL) than that of a legitimate charitable organization. Similar-looking URLs are sometimes purchased by fraudsters to lure in would-be donors. These sites may ask you for personal information or install harmful material onto your device. Be skeptical if someone thanks you for a pledge you never made, and always check your records.
- Understand the Difference Between “Tax-Exempt” and “Tax-Deductible”: Being a nonprofit does not mean the organization is exempt from taxation, or that your donation is tax-deductible. Generally, a tax-exempt organization is exempt from paying tax on its income and gifts, but may or may not be able to offer a charitable tax deduction to donors for their contributions. Just because an organization has a “Tax ID Number” or provides donors with a receipt that says “keep this receipt for your records” does not mean that the organization is a charity, tax-exempt, or that your donation is tax-deductible. A few tax-exempt organizations – most notably those given 501(c)(3) tax-exempt status by the Internal Revenue Service (IRS) – are able to offer charitable tax deductions for your donations. If you are not sure whether your donation is tax-deductible, verify the charity’s tax-exempt status by using the tools and information located on the IRS website.
- Consider the Costs of Gifts and Merchandise: Gifts that you receive from a charity in exchange for your donation cost money and generally, these expenses are paid from donated funds. The value of the goods and services that you receive for your donation is not tax-deductible. Some charities may sell merchandise online and claim that “100% of the proceeds” will benefit its charitable purpose. However, this does not necessarily mean that 100% of the sales price of the merchandise will go to charity, and the cost of the merchandise itself can greatly reduce the value of your donation.
- Protect Your Identity: Never give your Social Security number or other personal information in response to a charitable solicitation. Never give out credit card information to an organization unfamiliar to you. Some organizations sell or rent their donor lists to other organizations, including organizations that are not charities. Review the charity’s privacy policy to find out if your information will be shared with outside companies.
AG Carr, Gov. Kemp Urge Georgians to Beware of Potential Scams Seeking Donations for Tornado Victims
Attorney General Chris Carr and Governor Brian Kemp are urging Georgia residents to beware of potential scams seeking donations for those impacted by the recent tornadoes.
“We know Georgians want to help those in need but it is important that all citizens remain aware of potential scams when contributing to tornado relief efforts,” said Attorney General Carr. “Scam artists will prey on people’s generosity to commit financial or identity theft. Stay vigilant, be extremely cautious of unsolicited contacts and do your research before donating your hard-earned money.”
“Those impacted by this storm have been on Marty, the girls, and my mind,” said Governor Kemp. “As we are all eager to help support recovery efforts and lend a hand to those in need, Attorney General Carr and I also want Georgians to be mindful of con artists that sometimes try and capitalize on these types of disasters. Please heed the advice below if you are called to give, and let’s make sure that any charitable efforts go to those who were impacted – not scammers.”
It is fairly easy for a scammer to set up a realistic-looking website, copy a logo or create a name that sounds very close to that of a well-known charity. While some charities are completely bogus, even properly established charitable organizations spend varying amounts of donations on the actual programs they support. Consumers should also be careful when responding to ads or posts they see on social media or crowdfunding sites, as these are not always legitimate – even if they have been shared or liked by your friends. It is very important to take your time to review an organization thoroughly before you give someone your money.
Before you donate:
- Consider donating only to charities you know and trust.
- The following websites can help you determine whether an organization is reputable and how likely it is to use your money effectively and efficiently:
- Find out whether the charity plans to share your contact information with other charitable organizations or marketing companies. This commonly occurs, which is why people often receive solicitations from other charities after making a donation. You can review a charitable organization’s donor privacy policies by visiting Charity Navigator and BBB Wise Giving Alliance.
- Never give out your credit card or bank account information in response to an unsolicited phone call, email or text. Instead, ask the person to mail you information.
Red flags that may indicate a scam:
- High-pressure sales tactics or excessively emotional appeals.
- Unsolicited emails – especially from someone claiming to be a victim – asking for your credit card or bank account information.
- Insistence that you pay via cash, wire transfer or gift cards.
- Charities that pop up quickly following a tragedy or natural disaster.
- Organizations that refuse to provide detailed information about their identity, mission, costs, how the donation will be used or proof that contributions are tax-deductible.
- Organizations that use a name that closely resembles that of a better-known, reputable organization.