A Michigan Crackdown On Charity Fraud

by Gary Snyder

Remember when Nonprofit Imperative told you about the Michigan Attorney General charging a man that created fake veteran charities and tricking people into donating through telemarketing. The man was later sentenced to a year and a half to 10 years in prison and ordered to pay restitution. 

Bill Schuette is at it again---to his credit. He now ordered Southfield Michigan based professional fundraiser Associated Community Services to cease and desist its use of 'misleading telemarketing tactics.'

The AG investigation identified 230 alleged ACS violations, including telemarketers' response to the people who expressed reluctant to donate to charities by using a credit card over the phone. The ACS telemarketers then said, according to a script: "For that very reason, we are on file with the state Attorney General's Office."

According to the release by the AG's office, the "rebuttal" misled donors into thinking the ACS could be trusted with credit card information because ACS was "licensed" by the state. Being on file with the Attorney General's Office, however, means only that the company is licensed to fundraise on behalf of charities in Michigan, and does not endorse the company's ability to protect credit card information of donors.

Schuette plans to bring a civil action suit with fines up to $10,000 for each of ACS's alleged violations "unless ACS satisfactorily responds to this notice within 21 days," according to the news release.

It looks as though Schuette is on a path to clean up Michigan charity corruption similar to the efforts of New York AG Schneiderman.

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 (2006) Silence: The Impending Threat to the Charitable Sector (2011)