St. Louis, Mo., July 23, 2010 - A Missouri deputy sheriff’s group that collected more than $800,000 in donations between 2006 and 2009 has partnered recently with two fundraising companies accused of breaking laws by state and federal authorities.
The BBB suggests that consumers exercise caution before donating to the Missouri Deputy Sheriff’s Association, a nonprofit fraternal group that claims to represent more than 1,100 law enforcement officers in the state.
Recently, the association has contracted with professional fundraisers Civic Development Group and Xentel, Inc. Civic Development Group was forced out of the fundraising business earlier this year and required to pay nearly $18.8 million in fines following federal allegations that it repeatedly deceived the public. Xentel has been the focus of lawsuits by attorneys general in several states, including Missouri.
Michelle L. Corey, BBB president and CEO, said that while the Missouri Deputy Sheriff’s Association’s goals appear laudable, the association’s close ties with the two fundraising companies raise serious questions.
“For a group of law enforcement professionals to enter into financial relationships with companies that have been accused of misleading consumers does not do much to earn the public’s trust,” Corey said. “On top of that, they have been giving 80 percent of their donations to those fundraisers. This organization should know better.”
The association did not respond to several requests for information from the BBB. The BBB sent e-mails to 10 association board members whose contact information was listed on its website. None responded.
The Missouri Deputy Sheriff’s Association lists an address at 508 Mulberry St. in Jefferson City, Mo. On its website, the association said it was organized in 1988 to represent the interests of sheriffs and deputies across Missouri.
“The association is primarily interested in improving professionalism in law enforcement and enhancing working conditions for sheriffs and deputies,” the website says. The site lists the association’s president as Greg Thomas of St. Louis. Chairman of its fundraising committee is listed as Mike Venable of Crawford County, Mo.
Records filed by the association with the Internal Revenue Service and the Missouri Attorney General for 2006-2009 show that the deputies’ group raised about $827,000 in that period, mostly through telemarketing solicitations. The association paid about $670,000 in professional fundraising fees, or slightly more than 80 percent of the money raised, the records show.
In 2008, IRS records show that New Jersey-based Civic Development raised nearly $94,000 on behalf of the association, paying about $19,000 of that to the sheriff’s group. In 2009, Civic Development and its subcontractor Xentel raised about $277,000 for the association, with 80 percent of that money going to pay fundraising costs and the remaining 20 percent going to the association, Missouri records show.
Both Civic Development and Xentel have long histories with law enforcement.
More than a decade ago, the Federal Trade Commission charged that Civic Development’s corporate predecessors and its top two officials had violated the law by misrepresenting that donations to the American Deputy Sheriff’s Association were going to law enforcement officers in the donor’s locality, that donations were being used to buy bullet-proof vests for local law enforcement officers and that donations were being used to pay death benefits to the survivors of law enforcement officers. The FTC issued a cease and desist order in June 1998.
In September 2007, the U.S. Attorney General’s office sued Civic Development, alleging that the company was continuing to mislead the public and was misrepresenting its fundraising role, in violation of federal telemarketing law.
“Consumers throughout the United States have suffered and continue to suffer substantial monetary loss,” as a result of Civic Development’s actions, the suit said. The company and its officials “have been unjustly enriched as a result of their unlawful practices,” said the suit.
In March, the FTC entered into an agreement with Civic Development and owners Scott Pasch and David Keezer which permanently bans the fundraisers from charitable solicitation work. The agreement also forced the liquidation of millions of dollars in personal property owned by the men, with proceeds going to pay the $18.8 million fine. The personal property included two homes valued at $2 million each, $1.4 million in artwork, more than $270,000 in rare wines and a vintage guitar collection valued at $800,000.
A recent fundraising mailing notes that the Missouri Deputy Sheriff’s Association now uses Xentel, Inc., for its fundraising. The company’s headquarters are in Fort Lauderdale, Fla. At least five states, including Missouri, have taken legal action against Xentel.
Three years ago, the Ohio Attorney General filed suit against Xentel, claiming that the company had violated the state’s Charitable Solicitation Act since at least 2002 by defrauding seven charities, including the Ohio Association of Chiefs of Police, the Ohio Patrolmen’s Benevolent Association and the Ohio Narcotics Officers’ Association.
Two years later, two Trumbull County, Ohio, sheriff’s deputies who ran the Ohio Narcotic Officers’ Association were sentenced to jail for using the charity for personal gain. According to a newspaper account, an investigative report compiled by the Ohio Bureau of Criminal Identification and Investigation said the men used charity money to pay for personal cell phone bills, Christmas gifts for family members, cable TV bills and a $1,100 entrance fee to a poker tournament. The investigative report said the charity had paid Xentel nearly $600,000 for its fundraising work. Both the prosecutor and defense attorney in the case were openly critical of Xentel’s role in that case, according to the news report.
The Missouri Attorney General’s office first sued Xentel in 2003 “for violating Missouri consumer protection laws by using manipulative, high-pressure techniques to solicit donations, and by making repeated solicitation calls to Missourians on the state No-Call list.” At that time, the office obtained a court order requiring Xentel to pay $75,000 and comply with telemarketing laws. In February 2008, the office obtained another court order requiring Xentel to pay the state $80,000 for calling Missourians on the No-Call list.
“Hopefully, this company will get the message now,” then-Attorney General Jay Nixon said at the time.
In a phone conversation with a fundraiser, a telemarketer told a BBB investigator that contributions to the Missouri Deputy Sheriff’s Association would help pay for professional law enforcement training, a “Shop with a Deputy” program for children and death benefits for officers killed in the line of duty. When asked, the telemarketer said 10 to 40 percent of the contribution would go to the association and the remaining would pay overhead expenses.
A follow-up mailing included a 2010 “Active Supporter” decal with the association’s logo. The back of the mailing notes that any contribution is not tax deductible.
The BBB offers the following tips for dealing with telemarketers raising money for police and fire organizations:
- Ask whether the caller is employed by a professional fundraising company, the name of the fundraising firm and how much of each contribution will actually go to the nonprofit organization.
- Ask how the organization intends to use your donation.
- Before donating, learn everything you can about where your money is going. Ask for a website for the organization, any printed materials that might be available and any other information you might find helpful in making your decision.
- Be cautious of names of charities or other groups that sound like well-known organizations.
- Ask whether your contribution is tax-deductible. Donations to many fraternal organizations and any group that lobbies elected officials on behalf of its members or constituents are not tax deductible.
- Check out an organization with the BBB before donating. Information may be obtained by going to www.bbb.org or by calling 314-645-3300.
Contacts: Michelle Corey, President & CEO, 314-645-3300, mcorey@stlouisbbb.org, or Bill Smith, Trade Practice Investigator, 314-645-3300, tpc1@stlouisbbb.org
The BBB is a non-profit organization that sets and upholds high standards for fair and honest business behavior. The BBB provides objective advice, free business Reliability Reports, dispute resolution service, charity wise-giving reports, and educational information on topics affecting marketplace trust. Please visit www.bbb.org for more information.