Tuesday, May 1, 2012

Greg Mortenson/ 'Three Cups of Tea' Lawsuit Dismissed

by Gary Snyder

Greg Mortenson has finally caught a break. A federal judge in Montana dismissed a lawsuit filed by four readers who charged “Three Cups of Tea” author Greg Mortenson engaged in a massive fraud by claiming his bestselling books were works of nonfiction when some the events in the books are now alleged to be fabrications.

The suit said the author and others engaged in a pattern of racketeering to use fabricated or inflated claims in his books to help portray Mortenson as a hero to boost book sales and increase donations to the author’s nonprofit group, the Central Asia Institute.

The complaint said Mortenson and his co-defendants “continued to misrepresent that the contents of ‘Three Cups of Tea’ and ‘Stones Into Schools’ were true, nonfiction accounts of what really happened, when, in fact, the contents were false and the accounts did not happen.”

“The enterprise’s fraudulent scheme was to make Mortenson into a false hero, to sell books representing to contain true events, when they were false, to defraud millions of unsuspecting purchasers out of the purchase price of the books, and to raise millions of dollars in charitable donations for CAI,” the suit says.

Charges of fabrications in Mortenson’s books were raised last year by author and mountaineer Jon Krakauer and the CBS News program, “60 Minutes.”

Last month, Montana Attorney General Steve Bullock announced a settlement with Mortenson and CAI in which the author is required to pay $1 million in restitution to his own charity “for his past financial transgressions.”

According to the attorney general, under Mortenson, CAI made bulk purchases of his books at retail prices with charitable funds that were donated to build schools in southwest Asia. At the same time, Mortenson received and kept royalties from those sales.

CAI also used charitable funds to pay expensive advertising costs for the books. Mortenson also accepted travel fees from book event sponsors at the same time CAI was paying all his travel expenses using charitable funds donated to build schools.

The Montana attorney general did not examine the alleged fabrications in Mortenson’s books.

In dismissing the complaint, Judge Haddon said the plaintiffs had failed to offer enough evidence of a pattern of fraud to justify the legal action. 
“Plaintiffs assert they suffered concrete financial loss when they paid full price for a nonfiction book when it was fiction,” he said.

"The complaint does not state, nor is it possible to ascertain, whether plaintiffs would have purchased the books if: (1) the books were labeled or marketed as fiction; or (2) the readers knew portions of the books, as claimed, were fabricated,” he said.

“Plaintiffs’ overly broad statements that they paid approximately $15 for the books because they were represented as true does not suffice,” the judge said.  (link)

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)
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