Car donation charities under investigation
New York Attorney General Andrew M. Cuomo launched an industrywide investigation into car donation charities, suing one non-profit and issuing subpoenas demanding information from 15 others.
The organization that incurred the bulk of Cuomo's wrath so far is Feed the Hungry, Inc. The charity and its director, Nicholas Cascone, Jr., allegedly misappropriated and diverted hundreds of thousands of dollars meant to help the homeless, according to the lawsuit filed by Cuomo's office. The lawsuit says that of the more than $430,000 worth of donations between 2002 and 2009, Feed the Hungry received less than $7,900, or 1.8%, for charitable purposes.
In order to attract a steady stream of donations, Cascone and FTH allegedly made false and misleading statements to trick consumers into donating their used cars so the group could sell them. Before its web site, www.feedthehungryinc.org, was taken down (it was taken down when the non-profit learned it was being investigated), FTH boasted that it had funded more than 83,000 meals in 2008, working with New York City Rescue Mission, the oldest institution of its sort in the U.S. But the mission's records show donations totaling only $1,400 from FTH that year. With meals priced at $1.99 each, the non-profit could not have funded more than 1% of the food it said it paid for, according to the complaint.
In addition, although Feed The Hungry stated that "Your vehicle donation can provide meals for the less fortunate," the organization made no charitable donations at all in 2005, 2006, and 2007.
The lawsuit also accuses Cascone of failing to provide even the most basic corporate and financial oversight, such as having a functioning board of directors. When asked fundamental questions about the charity's directors, board meetings, number of employees, basic operations, and where the proceeds from the donations were spent, Cascone invoked the fifth amendment more than 150 times, Cuomo's office said.
Cuomo's lawsuit seeks to freeze the group's assets, bar further solicitations, hold Cascone liable for restitution and damages, prevent him from serving as an officer or director of any non-profit in the future, and dissolve Feed The Homeless and rededicate its assets to real charitable uses.
"We remain concerned that similar practices may prevail in other organizations and will diligently work to root out any other sham charities," Cuomo said in a statement.
As part of its sweeping probe of the car-donation fund raising industry, Cuomo's office also sent subpoenas to 15 other charities, fundraisers and individuals that solicit used cars and sell them, purportedly to help fund causes such as breast cancer research, helping disabled kids and the blind.
Among them is Kars4Kids, whose jingle can be heard on radio stations from coast-to-coast. The charity reached a $65,000 settlement with the Pennsylvania Attorney General's office over accusations that it misled potential donors by not disclosing that only Jewish children benefited from the proceeds. Oregon's attorney general also took legal action against the group and its parent charity.