FTC

Details on FTC enforcement action against four cancer charities – 1

The news coverage has died down about enforcement action taken against four charities by the FTC and every state attorney general. I’ve not seen anything that dives a deep into the accusations. This post is the start of a series of discussions on the case.

Why go into detail?

After having read through the accusation, it is obvious this case contains most of the problematic issues we have seen over the last few years in nonprofit accounting and fundraising. Off the top of my head, I don’t recall any issues under discussion in the charity world that are not present in this case. That makes this set of allegations a good case study.

The complaint can be found here. That is a public document. I claim journalist status, so will quote the document at length.

Here is the opening of the complaint, with a few comments added: (more…)

Jim Ulvog

More followup on FTC action against 4 cancer charities

There is a lot more to say on the FTC and all AGs going after four charities that were way out of line.

5/19 – William P. Barrett at Forbes – Cancer Charities Agree to Dissolve Amid Fraud Claims – Article summarizes the case by the FTC. Two of the four charities have agreed to close their doors. Three of the named individuals have agreed they will not have future involvement with charity management or even fundraising.

We did nothing wrong and we agree not to break the law again

Article points out the irony we seen these kinds of settlements. Even though the three individuals agreed to not be involved in the charity sector again during their lifetime and two of the charities agreed to be taken over by receivers and then liquidated, the charities and individuals involved denied doing anything wrong.

It is as if it’s a normal and everyday thing that individuals agree to be legally barred from involvement in their economic sector and charities agree to corporate suicide when they have done nothing wrong.

But that’s the legal dance that is necessary. Denying wrongdoing is necessary to prevent the consent degree from becoming proof to anyone who later tried to sue the charities or individuals.  Even though I understand the reason, it seems silly to those looking in from the outside.

Contested claims

(more…)

Jim Ulvog

First glance at court filings in the FTC enforcement case

One cool thing I have learned while blogging is that lots of records for federal court proceedings are available in the federal Public Access to Court Electronic Records (PACER) system. After following the case of Scott London for a while, I’ve learned my way around PACER.

I have taken a quick look at the documents available in PACER for the enforcement action by the FTC and all state AGs against four cancer charities.

(more…)

Jim Ulvog

Survey of first day reporting on major FTC enforcement action

Here is a collection of the articles I found the day the FTC and all state Attorneys General took enforcement action against a group of four charities:

Update: A quote in the Chronicle of Philanthropy article provides a massive warning to the nonprofit community:

Hugh Jones, a charity regulator in Hawaii, said to his knowledge “this is the first time state charity regulators have aggressively pursued the deceptive use of gifts in kind.”

While this case looks to be extraordinarily extreme, there are a variety of issues that the FTC and every AG has now declared to be the fraud category. Anyone who has been paying attention knows the issues under discussion are not limited to these four charities. 

It isn’t too late to clean up policies, valuations, and modify some past filings.

Let those with ears to hear, hear.

FTC litigation

FTC press release which lists the names of the charities and key executives: (more…)

Jim Ulvog

First hint about the FTC enforcement actions to be announced later today

Last evening Mr. William P. Barrett (@WilliamPBarrett) tweeted:

FTC fundraising fraud lawsuit filed in Arizona federal court against #CancerFundOfAmerica and Cancer Support Services, but no individuals

Tweet has no link to articles but does point to the discussion of Cancer Fund of America at the America’s Worst Charities website. They are #2 on the list. Cancer Support Services isn’t on that list. After a cursory search, I can’t find any other discussion of the FTC’s action.

If that is a correct description of the targets of the enforcement action, you can start your reading by following that link.

The FTC announcement of a press conference is here.

I will be in a continuing education class all day so will follow any news sporadically. Haven’t decided if I’m going to step out of the class so I can listen in to the press conference. (I claim to be part of the media for this issue!) The scheduled time is in the middle of one of the most important classes.

If you have been reading this blog, you may want to pay attention to the coverage that seems likely to develop today.

Jim Ulvog

Major announcement from Federal Trade Commission on Tuesday

On 5/19 the FTC and State Attorneys General to Announce Action on a Major Consumer Fraud Case

I think there will be some major news tomorrow. This may be related to the work various AGs have been doing on GIKs. If my guess is correct there will be plenty of coverage tomorrow.

link: https://www.ftc.gov/news-events/press-releases/2015/05/ftc-state-attorneys-general-announce-action-major-consumer-fraud

 

Jim Ulvog