A.G. Schneiderman Announces Penalty Against Telemarketer For Soliciting Funds In New York Despite Lifetime Ban
Mark Gelvan Violated Court Order Aimed At Protecting New York Donors From Fraudulent Fundraising Claims
Schneiderman: We Will Pursue Those Who Violate The Law
NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has reached a $50,000 settlement with Mark Gelvan, a telemarketer whose New Jersey-based companies solicit charitable donations, for violating an order that barred him from raising money for charity in New York State. The Attorney General’s Charities Bureau re-opened the case after receiving a tip that Gelvan was again operating in New York, despite a permanent ban on fundraising in the state. The 2004 ban was part of a settlement arising from a lawsuit filed against Gelvan and one of his telemarketing companies for making fraudulent claims to potential contributors, including stating that donations would be used to benefit families and widows of New York State Troopers and to sponsor drug and alcohol prevention programs.
“After he was banned from raising charitable dollars in New York State, this telemarketer did an end-run around the court's order and again started to raise money from generous and unsuspecting New Yorkers. This time, Mr. Gelvan raised this money by acting as a third party broker,” Attorney General Schneiderman said. “Settlements with this office will be enforced, and those who try to avoid or skirt their obligations will be found out and held accountable.”
Today’s settlement grows out of an earlier investigation of Gelvan’s conduct in connection with New York charitable solicitations. That 2004 investigation resulted in an agreement under which Gelvan signed a court order that prohibited him from conducting telemarketing activities in New York, directly or indirectly, including provisions that barred him from brokering any agreements between charities and professional fundraisers for the solicitation of donations from New York residents.
The Charities Bureau’s recent investigation determined that, beginning in 2010, Gelvan, 46, of Montville, N.J., violated the terms of the earlier settlement. That year, a company wholly owned by Gelvan, Raising Money Inc. (“RMI”), brokered agreements for the fundraiser Midwest Publishing-DN, Inc., (“Midwest”) with the Women to Women Breast Cancer Foundation, in Florida, and a second agreement between Midwest and the National Vietnam Veterans Foundation, which is in Virginia.
In return, Midwest, based in Arizona, agreed to give Gelvan and RMI a portion of the charitable donations that Midwest raised for the groups. The Charities Bureau determined that Gelvan received $37,720.24 from New Yorkers’ charitable donations to Midwest and the two groups. Under today’s settlement agreement, Gelvan and RMI must pay $50,000, representing disgorgement of his ill-gotten gains plus a penalty for his actions. Gelvan remains barred from conducting or receiving any benefits from the solicitation of charitable donations in New York.
A copy of today’s agreement can be read here.
A copy of the Attorney General’s 2004 Order can be read here.
As detailed in the Attorney General’s most recent “Pennies for Charity” report, for-profit telemarketers often retain a very high percentage of the charitable donations they raise from the public. In 2012, an average of only 37.5% of funds raised by telemarketers were retained by the charities. In 50.3% of the campaigns, the charities retained less than 30% of the funds raised, or the expenses exceeded contributions. The most recent filings submitted by the Women to Women Breast Cancer Foundation and the National Vietnam Veterans Foundation showed that the organizations retained less than 10 % and 11%, respectively, of the total donations they received from Midwest’s telemarketing services in 2012.
The investigation of this matter was conducted by Assistant Attorney General Elizabeth Ann Fitzwater of the Charities Bureau and Senior Enforcement Counsel David Nachman. The Charities Bureau is led by Bureau Chief James Sheehan, and the Division of Social Justice is headed by Executive Deputy Attorney General Alvin Bragg.