NY AG shuts down company that solicited $110 million for fake charities

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FILE- In this Aug. 6, 2020 file photo, New York State Attorney General Letitia James takes a question at a news conference in New York. (AP Photo/Kathy Willens, File)

NEW YORK — Associated Community Services, a company that the state of New York and the Federal Trade Commission called “a massive telefunding operation that bombarded 67 million consumers with deceptive charitable fundraising calls,” was shut down Thursday, Attorney General Letitia James announced.

According to the state, ACS made the robocalls, most of which were illegal, to solicit cash for what were ultimately fake charities. They were able to squeeze $110 million out of the operation by falsely claiming the money would go to veterans, children and firefighter-related charities.

The attorney general’s office and the FTA got the defendants to agree on settling charges that they tricked people into donating to the fake charities. The complaint names ACS and its sister companies Central Processing Services and Community Services Appeal; their owners, Dick Cole, Bill Burland, Barbara Cole, and Amy Burland; and ACS senior managers Nikole Gilstorf, Tony Lia, John Lucidi, and Scot Stepek. In addition, the complaint names two fundraising companies allegedly operated by Gilstorf and Lia as spin-offs of ACS, Directele and The Dale Corporation.

“These telemarketers illegally solicited contributions from New Yorkers and inundated them with millions of harassing phone calls,” said James. “There is no tolerance for this type of unlawful and predatory behavior. We will continue to work aggressively with partners around the country to stop deceptive fundraising tactics that cheat hardworking New Yorkers.”

The complaint says the the defendants knew the charities were fake and that in some cases, as little as .01% was spent on those causes. It also said the calls were of a harassing nature, as they called more than 1.3 million numbers 10 times in a single week and 7.8 million more than twice an hour. Some numbers were called over 5,000 times.

The ACS defendants were the subject of 20 prior law enforcement actions for their fundraising practices. The ACS defendants stopped operating in September 2019.

As part of the settlement, each defendant has been banned from conducting or consulting on any fundraising activities or telemarketing work. They also are banned from using existing donor lists, as well as from making any misrepresentation of a product or service. Several of them have been fined over $110,000 each.

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