Charity in trouble in N.Y.

Nick Rees Dec. 15, 2009, 3:58pm


NEW YORK (Legal Newsline) - A New York City-based not-for-profit group has been order to shut down following an interim court order obtained by New York Attorney General Andrew Cuomo.

United Homeless Organization, Inc., is required by the court order to halt immediately all charitable solicitations from the public by any means. The order also freezes UHO's assets, including bank account and vehicles.

Cuomo filed a lawsuit against UHO, its founder and president Stephen Riley, and Myra Walker, its director. The lawsuit alleged that Riley and Walker duped the public into donating cash to fund service for the homeless, which was then instead used for personal expenses.

UHO, Riley and Walker are charged with engaging in a scheme to defraud and with violating New York State's not-for-profit and charitable solicitation laws.

"Today's court order prevents UHO from further exploiting the trust and good will of New Yorkers," Cuomo said. "But this organization's bad behavior shouldn't undermine the public's willingness to donate to legitimate charities. As my office continues to aggressively monitor the activities of UHO and other charities, New Yorkers should feel even more confident in giving this holiday season."

Cuomo's lawsuit, filed in New York Supreme Court, New York County, alleges that UHO used donations for personal expenses.

The lawsuit charges that UHO employees, called "table workers" or "members," paid Riley and Walker a fixed daily fee for the right to use UHO tables, jugs, aprons and other paraphernalia to solicit donations. After paying the fee, the workers would keep any donations they received.

Riley and Walker then used the fees collected from the workers for their own living and travel expenses, Cuomo said. The duo claimed in annual reports that they received no income from UHO, Cuomo said.

Walker, Riley and UHO are charged with violations of New York's Not-For-Profit Corporation Law for breaches of fiduciary duty in connection with UHO's governance as well as for wasting and misappropriated assets.

The lawsuit also charges Walker and Riley with failure to properly administer charitable assets, engaging in a scheme to defraud in connection with charitable solicitations and making false filings with the attorney general.

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