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Tuesday, August 20, 2019

Fundraiser paying $35K in penalties in settlement with Cuccinelli

By Bryan Cohen | Feb 29, 2012


RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli announced a settlement on Tuesday with a fundraising organization and its chairman to resolve allegations of submitting inaccurate financial statements and making false statements.

Under the terms of the settlement, Journey for the Cure Foundation and its chairman, Tareq Salahi, must pay $35,000 worth of civil penalties and attorneys' fees and costs. The Fauquier County-based organization was formed to support individuals suffering from such diseases as lymphoma, leukemia, muscular dystrophy and multiple sclerosis.

The JCF conducted fundraisers to raise money for charities that aided individuals afflicted with the diseases. The organization allegedly engaged in multiple violations of the Virginia Solicitation of Contributions law.

The alleged violations include failing to provide the office of Consumer Affairs with necessary financial statements when it stopped soliciting charitable contributions in the state in 2010, failing to keep true fiscal records in keeping with the VSOC law, soliciting charitable contributions from Virginia residents between 2004 and 2009 without first being registered with the OCA, and knowingly making false statements in an OCA registration, including the submission of inaccurate financial statements to the OCA.

In addition, the organization allegedly used misleading statements, such as a statement that 100 percent of its financing goes directly to find a cure for the diseases with no paid staff. Bank records showed that only 33 percent of JCF's expenditures in 2007 and 0.6 percent of its expenditures in 2008 went directly to disease prevention-supporting charities. Much more money was allegedly spent on fundraising overhead.

Cuccinelli's office also alleged that Salahi himself violated the VSOC law by certifying in a solicitation notice filed with the OCA that JCF was registered with the state office when it had not been, certifying numbers that were inaccurate for charitable contributions on the organization's 2009 registration statement and falsely certifying on the organization's 2008 registration statement that JCF had no financial history.

Under the terms of the settlement, JCF and Salahi are barred from engaging in further violations of the VSOC law, JCF must pay $25,000 worth of civil penalties for allegedly violating the VSOC law, Salahi must pay $2,500 in civil penalties for his alleged violations of the VSOC law and JCF must pay $7,500 to the commonwealth for attorneys' fees and costs.

Cuccinelli was able to obtain injunctive relief from Salahi directly in addition to the charity. Salahi will be subject to civil or criminal contempt of court and further civil penalties if he were to form another charitable organization and commit similar violations.

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