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CONTACT: Bill Brauch, Director
Consumer Protection Division
515-281-8772,
bill.brauch@iowa.gov
FOR IMMEDIATE RELEASE, June 15, 2011

Judge Imposes Ten-Year Fundraising Ban on Florida Charity

 

(DES MOINES, Iowa)  A Polk County judge Wednesday banned a Florida-based charity from fundraising in Iowa for at least ten years. 

The ban order was part of a consent judgment against the Defeat Diabetes Foundation, Inc., its president, Andrew P. Mandell, and its treasurer, Jerald Y. Mandell, formally resolving a consumer fraud lawsuit that was also filed Wednesday by Attorney General Tom Miller.

Defeat Diabetes Foundation, Inc. is based in Madiera Beach, Florida, according to its fundraising contract.  Defendants Andrew and Jerald Mandell are brothers. As part of the settlement, the defendants denied any wrongdoing.   

“We alleged that numerous deceptive fundraising calls were made on behalf of Defeat Diabetes Foundation by Lino’s, Inc., a Des Moines-area professional fundraiser that the Foundation hired to solicit donations,” Miller said.  “After arranging for the telemarketer to call for contributions in the charity’s name, the Foundation made little or no effort to ensure that money was being solicited fairly and honestly.  In fact, the Foundation even gave its approval to misleading telemarketing scripts.”

Miller said that the terms of the consent judgment were negotiated over the last few weeks, after Miller made known his intent to file a consumer fraud lawsuit and gave the charity the opportunity to resolve it without sustained litigation.  In addition to the ten-year total ban, the consent judgment provides that the Foundation can resume fundraising after 2021 only if it first notifies the Attorney General, answers the Attorney General’s questions about its activities, and pays the State of Iowa $10,000.00 to reflect the costs associated with monitoring the Foundation’s activities.  The Consent Judgment also required an immediate payment of $2,500.00 for the administration and implementation of Iowa’s Consumer Fraud Act.

“We believe that a charity can’t look the other way when it knows or should know it is benefiting financially from misleading fundraising conducted in its name,” Miller said.  “This consent judgment includes a permanent injunction requiring Defeat Diabetes to take the steps reasonably necessary to ensure that the solicitations carried out in its name comply with the law.”

The Consumer Protection Division’s undercover phone line recorded several Defeat Diabetes solicitation calls, and Miller’s lawsuit alleged that they were uniformly deceptive.  The solicitors were misleading about who was calling, how much of the donated funds would go to the charitable mission, whether contributions would be devoted to Iowa relief, and whether the caller was a volunteer instead of a paid telemarketer, according to the lawsuit.

Lino’s, the West Des Moines telemarketer that made the calls for Defeat Diabetes, shut down last fall after the Attorney General’s office executed a search warrant on the operation.

Defeat Diabetes’ fundraising contract with the telemarketer provided that 80 cents of every dollar raised would go to the for-profit telemarketer, and only 20 cents to the charity.  The lawsuit alleged that this disparity was part of the reason organizations that rate charities have given the Defeat Diabetes Foundation failing grades. 

“When so little of each donation actually goes to a charitable purpose, it’s vital that solicitations are not misleading, and that consumers are told the truth when they ask probing questions,” Miller said.  “Truth was definitely a casualty in these Defeat Diabetes fundraising calls.”

Donor Beware!  Miller has the following tips for avoiding charity fraud and making the most of your donations:

  • Ask questions.  Be wary of claims that the caller is a charity worker or volunteer, that most of your donation goes to the cause, or that your donation will be used locally.

  • Don’t let a sympathetic charity name fool you – some fundraisers exaggerate or fabricate their support for veterans or military families, law enforcement, fire fighters, victims of disease, and children’s causes.

  • Ask phone solicitors to send written information.  Be suspicious if they insist on a pledge before they’ll send you information.  Check them out at the national Better Business Bureau “wise giving” site – www.give.org.

  • Don't give your credit card or checking account numbers over the phone to someone you don't know.

  • Give directly to a known charity of your choice.

  • Bottom line: Keep giving generously, but give wisely!  Giving to a known charity you’re confident about is often the best option.

 

If you think you have been cheated by a fundraising scheme, contact the Attorney General's Consumer Protection Division, Hoover Building, Des Moines, Iowa 50319. Call 515-281-5926, or 888-777-4590 toll free. Web site: www.IowaAttorneyGeneral.gov.

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