NEWARK, N.J. (Legal Newsline) - New Jersey Attorney General Jeffrey Chiesa announced a lawsuit on Thursday against the operators of a Superstorm Sandy charity that allegedly unlawfully misled the public by violating state charity registration and consumer protection laws.
The Hurricane Sandy Relief Foundation and its operators, Christina Terraccino and John Sandberg, allegedly diverted donation funds into personal accounts, misled donors with false claims about how donations would be used, falsely claimed that donations were tax-deductible and otherwise deceived the public. As of January, the organization had raised more than $631,000 in monetary donations from at least 1,999 people for the charity, while allegedly disbursing less than one percent of the money to Sandy-related causes.
"New Jersey's law keeps charities honest, by requiring them to register with the state and provide clear, truthful information when soliciting donations from the public," Chiesa said. "This organization told the state it does not pay its executives, but our investigators found a paper trail reflecting thousands of dollars being transferred into the individual defendants' personal bank accounts. Meanwhile, less than one percent of the money they raised, has allegedly been paid out to help victims of Sandy. New Jersey and the attorney general's office have fought hard against alleged scammers in the wake of Sandy, and we will not permit profiteers to deceive the public with deceptive appeals for charitable donations."
The lawsuit alleges that the defendants engaged in multiple violations of the New Jersey's Nonprofit Corporation Act, the Consumer Fraud Act, the Charities Regulations, and the Charitable Registration and Investigation Act.
Chiesa's lawsuit requests that the court order the defendants to stop soliciting donations, disgorge and repay all property and funds acquired unlawfully, shut down their website, and pay full civil penalties for every violation, among other relief.
Under the Consumer Fraud Act and CRI Act, a first violation is subject to a civil penalty of up to $10,000. Subsequent violations are subject to penalties of up to $20,000. Each solicitation of donations made while HSRF was not registered or through misleading statements would be considered a separate violation.