A.G. Schneiderman Announces Multi-Million Dollar Fundraising Company Barred From NY For Charity Scam
Undercover Investigation Showed Telemarketers Routinely Lied to Donors During High-Pressure Calls
Schneiderman: My Office Will Not Tolerate the Exploitation of Generous New Yorkers
ALBANY - Attorney General Eric T. Schneiderman today announced that a Connecticut fundraising company and its owner have been permanently barred from soliciting charitable contributions in New York State. Under an order, signed in Supreme Court in Albany, Stage Door Music Productions, Inc. (Stage Door), with headquarters in Waterbury, Connecticut, and its owner, Robert J. Donato, 53, of Middlebury, Connecticut, are permanently barred from soliciting charitable contributions from New York State residents and businesses. Stage Door operated its main New York call center out of Albany, New York.
As a result of the Attorney General’s settlement, Stage Door was ordered to pay the state $1.2 million and Donato has been ordered to pay $40,000. Stage Door, a Connecticut fundraising corporation, had raised over $11 million in the State of New York since 2005. It had been registered to fundraise since 1985. Stage Door engaged in fundraising activities in New York on behalf of various charities, primarily public safety organizations such as police benevolent associations and firefighter associations. They used telephone campaigns that targeted New York residents and businesses.
“This fraudulent scheme involved fundraisers manipulating sympathetic donors in order to raise money, not for the greater good, but instead for their personal financial benefit,” said Attorney General Schneiderman. “My office will not tolerate the exploitation of generous New Yorkers and we will continue to put these operations out of business, while safeguarding the integrity of charitable giving throughout the state.”
It is illegal to fundraise in New York State using deceptive or misleading practices. Anyone soliciting for charities in New York must, among other things, provide a clear description of the programs and activities for which donations are requested or state that such information is available from the charity; disclose the name of the fundraising company; disclose the name of the individual telemarketer; and disclose the fact that the telemarketer is being paid. In addition, fundraisers are required to register and file reports with the Attorney General’s office.
In a 2010 lawsuit, the Office of the Attorney General sought a court order barring Stage Door from conducting fundraising in New York. According to the lawsuit, Stage Door carried out fraudulent telephone solicitations for over 30 public safety organizations located throughout New York State.
As part of the Attorney General’s investigation, an undercover investigator secured a job at Stage Door’s Albany Call Center where he was trained to carry out fraudulent practices and where he observed employees making false statements to the public during phone solicitations.
The investigation revealed that at times the telemarketers:
- Failed to disclose their professional status, as required by law, to make it seem that donors were giving directly to the public safety organization;
- Created the false impression that they were law enforcement officials; and
- Falsely claimed to be uncompensated volunteers for the public safety organization, when, in fact, between 75 and 85 percent of all donations were retained by Stage Door and its telemarketers.
Earlier this year, Attorney General Schneiderman obtained additional evidence that Stage Door’s telemarketers continued to flout New York’s fundraising laws. The Attorney General's office used this evidence to bring a contempt proceeding against Stage Door that led to the settlement announced today.
The Attorney General would like to recognize the cooperation and assistance of numerous individual and business donors who assisted in the investigation.
Donors who suspect they have been a victim of charitable solicitation fraud should contact the Attorney General’s office through his website: www.charitiesnys.com or by calling: (212) 416-8402.
The matter is being handled by Assistant Attorney General Nathan Courtney and Charities Enforcement Section Chief David Nachman under supervision of Bureau Chief Jason Lilien with the assistance of legal assistant Kelley Casper.