Together, Reducing Fraud Worldwide


'Tis the Season to be Wary


Fraudsters Take Advantage of Charitable Spirit During Holidays

 





The holiday season “it's a time for giving thanks and wishing good will toward all men, but it s also a perfect time for con artists to prey on the charitable spirit of others for their own financial gain. 

Last February a federal grand jury in Nova Scotia indicted George Campbell of Halifax for running a telemarketing scam that solicited donations for numerous fake charities, including a "wish foundation" for dying war veterans. In actuality, not a penny of the proceeds was given to charitable causes. All of Campbell s ill-gotten gains either went into his own pockets or were used to further the telemarketing scam. Campbell s scam was one of literally hundreds of telemarketing frauds busted due to "Operation Double Barrel," the code name for the 2 ½-year collaborative investigation involving the FBI, 35 state attorneys general, and federal prosecutors, which largely relied on taped telephone conversations between fraudulent telemarketers and undercover agents posing as gullible victims.

In another case, Marvin Cherna of Dallas, Texas, was charged with 13 counts of mail fraud in March 1998 for embezzling nearly $10 million from donors by organizing fraudulent fund-raisers that supposedly benefited sick children and war veterans in need. Cherna claimed the proceeds bought medical equipment for hospitalized children, as well as for disabled veterans in the communities where the fund-raisers were held. According to court records, Cherna deposited the majority of these proceeds into his personal bank accounts and divided the rest among his hired fund-raising staff.

Inspector and national public information officer Robert Bethel of the Washington, D.C., office of the U.S. Postal Inspection Service said his agency investigated 11 cases of suspected fraudulent charity mailings during fiscal year 1998, which resulted in one arrest and one conviction. One of the investigations focused on an organization in Tampa, Fla., called The Police Association, which solicited money that supposedly benefited local police departments and community anti-drug programs. The association hooked most of their donors by mailing out official-looking invoices that demanded amounts due even if no prior contact had been made with the individuals. The investigation revealed that only a small amount of the donations actually went to community programs. An injunction was filed against the organization and the case is still pending.

What Can Fraud Examiners Do?

As part of the consumer community, fraud examiners can reduce the incidence of charity fraud and abuse by informing their family members, friends, and business associates of the red flags associated with fraudulent solicitations for donations. Con artists can t make any money unless they find victims. By speaking publicly about charity fraud awareness, fraud examiners can help people to avoid becoming victims of these schemes. Some consumer advisory tips include:


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