Increased Attorney General Charity Enforcement Continues

‘Tis the season for giving, and charitable organizations continue to find themselves on the receiving end of growing scrutiny from state attorneys general.

Ohio is the most recent state whose attorney general has sued a nonprofit charitable organization. Attorney General Mike DeWine sued Cops for Kids, its organizers Thomas Duffy and Charles Hitzel, and for-profit charitable solicitor Telecom Enterprises, alleging they used contractual language to pocket nearly all of the $4.2 million in donations received by Cops for Kids over a decade. The complaint claims the defendants spent only $73,840 on charitable purposes during that 10-year period, with Duffy and Hitzel receiving more than $600,000 in salaries.

The Ohio Attorney General called Cops for Kids a “sham” that “misled donors,” and asked the court to stop the defendants from soliciting in Ohio. DeWine seeks to redistribute the assets and donations accumulated by Cops for Kids. Though DeWine’s suit is the latest aggressive state enforcement action against a charity, the industry is also seeing more coordinated activity between states and federal agencies. Last year, fifty (50) state attorneys general joined forces with the Federal Trade Commission to sue a group of related charities and the individuals behind them.