Attorney General Cuomo Announces Arrest Of Wny Travel Operator For Preying On Non-profit Organizations
BUFFALO, N.Y. (November 25, 2008) – Attorney General Andrew M. Cuomo today announced the arrest of a Western New York travel company owner who allegedly sold more than $90,000 in cruise packages to non-profits and other organizations and then never booked their trips.
Joseph Ehrenreich, 40, of Oakwood Drive in Pendleton, owner of Destination Management Group of Buffalo, allegedly stole more than $90,000 in payments from more than 20 consumers, businesses and non-profits for cruises he never booked. He was arrested and charged with one count of Scheme to Defraud in the First Degree (E felony), 10 counts of Grand Larceny in the Third Degree (D felony) and 10 counts of Grand Larceny in the Fourth Degree (E felony). The top charge carries a maximum penalty of seven years in prison. Ehrenreich was arraigned before Town of Pendleton Court Judge Edmund P. Maziarz. Bail was set by Niagara County Court Judge Matthew J. Murphy at $10,000 cash or $20,000 bond.
Many of the victims of Ehrenreich’s alleged scam were volunteers, employees, and supporters of area non-profits, including the Hospice and Palliative Care Group of Niagara County, the Meals on Wheels Foundation of Western New York and the Beechwood/Blocher Foundation.
“Non-profit organizations that provide essential services to our communities have to scrape for every dollar – especially in these tough economic times,” said Attorney General Cuomo. “My office will not allow the besmirching of trusted charitable causes – especially in the midst of the holiday giving season. This individual allegedly preyed upon these organizations and their generous donors with fraudulent offers – any such conduct would be an affront to the unsparing manner in which kind-hearted individuals give to worthwhile causes every day.”
According to the felony complaint, Ehrenreich operated Destination Management Group from his home in Niagara County, offering businesses and other organizations a program where they could pay to have unlimited access to cruise vouchers. The client organizations – many of them cash-strapped non-profits – would then distribute the vouchers as fundraising tools, marketing incentives or employee rewards. Ehrenreich allegedly claimed he would handle all the travel arrangements for the vouchers, citing his extensive relationships with major cruise lines and his memberships with the International Airlines Travel Agents Network (IATAN) and the Cruise Lines International Association (CLIA). In fact, he was not affiliated with ether association. Popular cruise lines, including Royal Caribbean, Norwegian, Holland and Carnival, all deny having any relationship with DMG or Ehrenreich and indicated that the invoice confirmation numbers he used were fictitious. IATAN also confirmed that neither Ehrenreich nor DMG were accredited by them. He also allegedly used the cruise lines’ logos on his Website and vouchers without their permission.
According to the complaint, those who received the vouchers from the client organizations would contact and/or meet with Ehrenreich to discuss the logistics of the cruise of choice. He often convinced the consumers to upgrade their vouchers, costing thousands of dollars more in additional charges. Ehrenreich would then require consumers to make immediate payment by check or cash to “hold” the reservation – he would not accept credit card payments. After receiving payment, Ehrenreich would issue an invoice with phony cruise line confirmation and IATAN accreditation codes.
However, the complaint alleges that consumers who called the cruise lines to confirm their reservations or check the status of the cruises then found out that Ehrenreich never booked any of the cruises and kept the payments. Many learned that their cruises were never booked when Ehrenreich filed for bankruptcy. In some cases, when consumers became suspicious, Ehrenreich attempted to conceal his theft by obtaining their credit card information and then using it to purchase trips for which they had already paid.
According to the complaint:
- A volunteer from the Hospice and Palliative Care Group of Niagara County received a complementary cruise voucher at the group’s holiday party, spent thousands of dollars to upgrade the trip and later found out no cruise was booked when she contacted the cruise line. Upon contacting Ehrenreich about the discrepancy, he allegedly reassured her that the cruise line was mistaken and there was indeed a booking. She later learned that Ehrenreich obtained her credit card information and used it to pay for a cruise that was supposed to have been already paid for.
- Another consumer received a DMG cruise voucher at the Hospice and Palliative Care Group of Niagara County’s holiday party. The consumer, who wanted to bring her granddaughters on the cruise, paid $3,999.05 for the cruise, travel insurance and airfare. After repeated attempts to contact Ehrenreich, he finally assured her that her cruise had indeed been booked. However, when she contacted Carnival directly, she learned that the reservation was never made.
- A magazine, After 50 News, donated a voucher to a benefit being held for Police Officer Patricia Parete, who was seriously injured in the line of duty and to the Beechwood Continuing Care fundraiser. A consumer won the voucher and upgraded the cruise voucher for $3, 264.85. Months later, the consumer contacted the cruise line and was informed that a reservation was never made.
- Another consumer attended the 12th Annual Auction and Food Extravaganza Fundraiser for the Beechwood/Blocher Foundation and submitted a winning bid of $1,200 for a cruise voucher donated by After 50 News. When the consumer attempted to register his certificate with Ehrenreich, he learned that he had filed for bankruptcy. The Beechwood/Blocher Foundation reimbursed the consumer for the amount of his bid.
- Another consumer received a cruise voucher from After 50 News, which he planned to use to celebrate his daughter’s completion of cancer treatments. Ehrenreich claimed to book a 5-day cruise and demanded immediate payment. The consumer’s daughter delivered a check for $1,375. After several unsuccessful attempts to reach Ehrenreich after making the payment, the consumer contacted the cruise line and found out that the cruise was never booked and that the confirmation and IATAN numbers listed on the invoice were fraudulent.
- Two consumers purchased a cruise package for $1,400 at a fundraiser for the Meals on Wheels Foundation of Western New York and upgraded their cruise for $5,140.87, which included the cruise, airfare and trip insurance. After paying Ehrenreich, the consumers contacted Celebrity Cruise Line in early 2008 and learned that their cruise was never reserved.
After the Hospice and Palliative Care Group of Niagara County learned that the cruise vouchers it provided to volunteers, employees and donors were fraudulent, the organization took it upon itself to reimburse those individuals in the amount of $18,000.
Patricia Degan Director of Public Relations for the Hospice and Palliative Care Group of Niagara County, said, “I want to thank Attorney General Cuomo for working with the nonprofit community and Niagara Hospice to seek justice and ensure the utmost integrity of all our good names – especially in this giving season. While the work of our organization’s selfless supporters and volunteers transcends dollar amounts, I applaud the Attorney General for pursuing this matter and we shall continue to cooperate with his office in pursuit of justice.”
Benjamin A. Gair, III, Executive Director of the Meals on Wheels Foundation of Western New York, said, “For nearly 40 years, Meals on Wheels of Western New York has provided invaluable service to residents throughout the region. Our supporters go out of their way to help us continue to ensure that area residents can maintain their independence. Attorney General Cuomo recognizes that our efforts are vital to the community, and I thank his office for standing up to protect our organization and other area non-profits.”
Attorney General Cuomo urges any other organizations or individuals who believe they were defrauded by Ehrenreich or Destination Management Group to contact his office at 716-853-8400.
The Attorney General thanked the State Police for their assistance in the case. The case is being handled by Assistant Attorneys General Letizia Tagliafierro and Michael McCabe under the supervision of Assistant Attorney General-In-Charge of the Buffalo Regional Office Russell T. Ippolito and Deputy Bureau Chief Richard Ernst of the Criminal Prosecutions Bureau. The investigation was handled by OAG Investigator Shawn McCormick.
The charges are merely accusations and the defendant is presumed innocent unless and until proven guilty in court.