N.Y. AG announces court decision to shut down allegedly fraudulent fundraiser

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a court decision Friday that will shut down one of the state's largest professional fundraising firms, which allegedly defrauded the public out of millions.

New York Supreme Court Justice Emily Pines issued the decision on Thursday, which requires that Campaign Center Inc. and Garrett Morgan, the company's owner, pay restitution to thousands of donors who allegedly made charitable contributions based on false representations. Campaign Center allegedly deceived donors into making contributions to the sham charity, Coalition Against Breast Cancer, which raised close to $10 million but did not engage in research or carry out any public education.

CABC allegedly spent only four percent of its total donations on any charitable programs.

"Sham charities and professional fundraisers who line their pockets by tricking New Yorkers into thinking they are donating their hard earned money to fund breast cancer research and other charitable causes have no business operating in our state, and we will take action to shut them down," Schneiderman said. "This important decision reaffirms my office's determination to use the powers available under New York law to ensure honesty and integrity in the field of charitable fundraising, and to protect New Yorkers."

The decision bars both Campaign Center and Morgan from future charitable fundraising in the state and requires that Campaign Center be dissolved. On May 20, the court will hold a hearing to determine how much in restitution Campaign Center and Morgan will be required to pay.

Schneiderman sued Campaign Center, Morgan, CABC and CABC's directors in June 2011, alleging that they engaged in violations of state not-for-profit and charitable fundraising laws.

In April, Schneiderman's office reached a settlement with the now-shuttered CABC to prohibit its directors from ever running a New York charity in the future. The directors were ordered to pay a monetary judgment of $1,555,000 in restitution.