(TNS) —
Connecticut joined a federal settlement this week that is shutting down a major telemarketing operation that deceptively collected more than $110 million through high-pressure tactics and more than a billion phone calls, most of them illegal robocalls.
Associated Community Services and its sister companies were accused by the
Federal Trade Commission and dozens of state attorneys general of using their calls to dupe people into donating to charities that claimed to support homeless veterans, victims of house fires and children with autism but that actually kept the majority of the money raised.
In all, the company made 1.3 billion calls to 67 million customers across the country, officials said.
More than 34 million of those were made to
Connecticut phone numbers from
January 2016 through
August 2019, including multiple calls per hour to some families,
Connecticut Attorney General
William Tong
said Thursday.
As part of the settlement, several of the companies that participated in the scheme will be forced to close and several senior managers will be required to pay back hundreds of thousands of dollars — money that will be directed back to the states where donors were misled to support real nonprofit groups.
“These fake fundraisers bombarded millions of consumers with well over a billion deceptive robocalls — swindling generous families and robbing legitimate charities of support,” Tong said, in a statement. “Our enforcement action holds senior leadership personally accountable for this egregious fraud, and directs penalties collected into a fund for real nonprofits to provide the services ACS and their related entities falsely promised.
“Robocalls are more than just a nuisance, they are a real consumer protection and public safety threat. We are continuing to work closely with our partners in the telecom industry to develop and deploy technology to track and trace these calls and to bring scammers to justice.”
The complaint filed by the
FTC and 46 agencies from 38 states, including
Connecticut, accused
Associated Community Services and several partner companies of using robocalls and “deceptive pitches” to fundraise for would-be charities since at least 2008.
Senior managers at the companies knew the organizations they fundraised for spent little to no money on their supposed causes and kept for themselves “as much as 90 cents of every dollar they solicited from generous donors,” Tong said.
Associated Community Services had been subject to 20 previous law enforcement actions related to illegal fundraising, including when it was identified as the major fundraiser for the fake
Cancer Fund charities that were shut down in 2015 after a similar investigation discovered those groups scammed more than $187 million from would-be donors across the country.
Associated Community Services owners Dick and
Barbara Cole
and Bill and
Amy Burland
and several of their senior managers will be subject to a judgment of more than $110 million, but that full amount will be suspended due to their inability to pay, according to the agreement.
Several of the defendants will still be required to pay some money back, however, officials said.
Barbara Cole
will be required to turn over proceeds from the sale of a
Michigan vacation home and
Amy Burland
must turn over $450,000, per the settlement. Among the senior managers included in the settlement,
Scot Stepek
must sell a ski boat and return the net proceeds,
John Lucidi
must pay $25,000 and
Nikole Gilstorf
and
Tony Lia
must each pay $10,000.
All of those funds will be held in escrow by the state of
Florida to be dispersed to charities that genuinely support the causes for which the companies originally claimed they were fundraising.
Two of the involved corporations,
Directele Inc. and
The Dale Corporation, also will be required to shut down, per the agreement. All of the defendants and remaining companies involved also will be permanently barred from fundraising or consulting for similar charities or using robocalls for any form of telemarketing.
“Deceptive charitable fundraising can be big business for scammers, especially when they use illegal robocalls,” said
Daniel Kaufman
, acting director of the
FTC Bureau of Consumer Protection. “The FTC and our state partners are prepared to hold fraudsters accountable when they target generous consumers with lies.”
(c)2021 The Hartford Courant (Hartford, Conn.). Distributed by Tribune Content Agency, LLC.
