ALBANY, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced an order on Friday permanently barring a Connecticut fundraising company and its owner from soliciting charitable donations in New York.
The Waterbury-based Stage Door Music Productions Inc. and its owner, Robert J. Donato of Middlebury, Conn., are permanently barred from soliciting charitable contributions from residents and businesses in the state of New York. Stage Door operated its main New York call center out of Albany.
Under the terms of the settlement, Stage Door must pay the state $1.2 million and Donato must pay $40,000. Stage Door, a corporate fundraiser registered since 1985, had raised more than $11 million in the state since 2005. Stage Door took part in fundraising activities in New York on behalf of multiple charities, chiefly public safety organizations such as firefighter associations and benevolent police associations. The company used telephone campaigns targeting New York businesses and residents.
"This fraudulent scheme involved fundraisers manipulating sympathetic donors in order to raise money, not for the greater good, but instead for their personal financial benefit," Schneiderman said. "My office will not tolerate the exploitation of generous New Yorkers and we will continue to put these operations out of business, while safeguarding the integrity of charitable giving throughout the state."
It is illegal to fundraise in the state of New York using misleading or deceptive practices. Anyone soliciting for charities in the state is required, among other things, to provide a clear description of the activities and programs for which donations are requested or state that such information is available from the charity.
In a 2010 lawsuit, Schneiderman's office sought a court order barring Stage Door from conducting fundraising in the state. According to the lawsuit, Stage Door allegedly carried out fraudulent telephone solicitations for more than 30 public safety organizations located throughout New York.
The lawsuit alleged that employees of Stage Door were trained to carry out fraudulent practices and that they made false statements to the public during phone solicitations. The lawsuit also alleged that the company's solicitors created the false impression that they were law enforcement officials to make it seem that donors were giving directly to the public safety organization and failed to disclose their professional status as required by law. The telemarketers also allegedly falsely claimed to be unpaid volunteers for the public safety organization, when, in reality, between 75 and 85 percent of all donations were retained by Stage Door and its telemarketers.
Earlier this year, Schneiderman obtained additional evidence that Stage Door's telemarketers allegedly continued to flout New York's fundraising laws. Schneiderman's office used this evidence to bring a contempt proceeding against Stage Door that led to the settlement announced Friday.