I-Team 10 investigation: Fundraising fraud

Posted at: 01/20/2010 9:22 AM | Updated at: 01/21/2010 9:42 AM
By: Brett Davidsen | WHEC.com

They call themselves champions for charity but today, the state attorney general filed suit against Marketing Squad Incorporated, located on Brooks Avenue and another telefundraiser in Rochester, Caring People Enterprises, accusing the two professional fund raising firms of fraud.

The lawsuit says the companies lie, manipulate and deceive to get people to donate.

Attorney General Andrew Cuomo said, “They'll come up with lists of activities the not for profits do which sound very important except that the not for profit doesn't do them."

The attorney general's office went undercover at the two companies. An investigator posed as an employee and recorded conversations with managers as well as phone solicitations made by other staff members.

According to the lawsuits, the companies deliberately disguised their roles in the fund raising campaigns, leading donors to believe they were speaking directly to the charities.

The attorney general's suit aims to shut down the companies, gain restitution to donors and levy fines.

I-Team 10 went to Caring People Enterprises on Dewey Avenue to get their side of the story but no one would answer the door when we knocked.

Many charities turn to professionals to handle their capital campaigns, the telefundraisers sometimes keeping more than three-quarters of the money raised. But the law requires they be up front in their scripted solicitations about the fact that they are paid professionals.

AG Cuomo said, “So you have companies that are using fraudulent tactics to deceive consumers to raise money and the money doesn't even go to the not-for-profit. Seventy-six cents on the dollar goes to the telemarketer."

I-Team 10 investigator Brett Davidsen had a long phone conversation with the owner of Marketing Squad, Scott Dean. He says he is puzzled by the allegations and says the company has a long tradition of doing the right thing. He says they don't strong-arm donors and if any of his people were ever overzealous in their pitches, they would be fired. He says he's concerned the negative publicity will hurt the charities they service.