Charity made false statements, failed to keep true financial records, solicited without being registered with the state
RICHMOND (February 28, 2012) – Attorney General Ken Cuccinelli announced today that a settlement has been reached with the Journey for the Cure Foundation and its chairman, Tareq Salahi, for allegedly making false statements and submitting inaccurate financial statements to the commonwealth’s overseer of charities, among other offenses.
Journey for the Cure Foundation (JCF) is a Fauquier County-based fundraising organization that was formed to support individuals struggling with diseases such as multiple sclerosis, muscular dystrophy, leukemia, and lymphoma. JCF would conduct fund raisers to raise money for charities that helped individuals afflicted with those diseases.
According to the attorney general’s complaint filed with the settlement, JCF allegedly violated the Virginia Solicitation of Contributions (VSOC) law by:
• using misleading statements in connection with solicitations for charitable donations. Specifically, JCF claimed on its Internet web site that “[p]roudly, 100% of our financing goes directly to find the cure and we have no paid staff.” Based on bank records obtained through the Virginia Office of Consumer Affairs’ (OCA) investigation, the attorney general alleged that only 33% of JCF’s expenditures in 2007, and 0.6% of its expenditures in 2008 went directly to disease prevention-related charities. Significant amounts were instead spent on fund raising overhead;
• knowingly making false statements in a registration statement filed with the OCA, among other things, submitting inaccurate financial statements to OCA as part of its registration statement;
• soliciting charitable contributions from the general public from 2004 to 2009 without first being registered with OCA;
• failing to keep true fiscal records in accordance with the VSOC law; and
• failing to provide OCA with required financial statements when it ceased soliciting charitable contributions in the commonwealth in 2010.
The attorney general further alleged that Salahi himself violated the VSOC law by:
• certifying in a solicitation notice filed with OCA that JCF was registered with the state office when it was not;
• falsely certifying on JCF’s 2008 registration statement that JCF had no financial history; and
• certifying inaccurate numbers for charitable contributions on JCF’s 2009 registration statement.
The settlement includes the following key terms:
(1) The commonwealth is granted a permanent injunction prohibiting JCF and Salahi from engaging in any further violations of the VSOC law;
(2) The commonwealth is granted a monetary judgment against JCF in the amount of $25,000 for civil penalties for JCF’s violations of the VSOC law;
(3) The commonwealth is granted a monetary judgment against Salahi in the amount of $2,500 for civil penalties for Salahi’s alleged violations of the VSOC law; and
(4) The commonwealth is granted a monetary judgment against JCF in the amount of $7,500 to compensate the commonwealth for its attorneys’ fees and costs.
The attorney general was able to obtain injunctive relief directly against Salahi, not just the charity. If Salahi were to form another charitable organization and then commit similar violations, the injunction could make him subject to civil or criminal contempt of court charges, in addition to further civil penalties.
In December 2009, the OCA announced an investigation into the practices of JCF. In May 2011, OCA referred its investigative findings to the attorney general for potential enforcement action.
The settlement, which is in the form of a consent judgment, has been filed for approval with the Fauquier County Circuit Court.
A copy of this news release may be found on the attorney general’s web site here: http://goo.gl/UP9nr
Join the conversation about this on Google+ here: http://goo.gl/ftOBw
Great. One more judgement that Terd Salahi will never pay back. Good luck collecting dime one of that proposed settlement. Guess Gov. Bob McDonnell wanted to put this all in the past to avoid the tarbrush of the Salahi name! Stories like this malfeasance might surface and torpedo his VP hopeful candidacy.
Ken “the Cooch” Cuccinelli wants to get this as far out of the picture as possible. More on Journey For The Cash http://www.youtube.com/watch?v=HfM4D7QglLw
I’m moving to VA to start my charity!
What a joke! Cooch knows that Salahi filed bankruptcy on this charity in 2010 so this judgement, like so many of Salahi’s lawsuits, won’t be paid. This is one of four instances under investigation by the State where Tareq and Michaele Salahi aledgedly screwed the public and Virginia Taxpayers out of money. In addition, there’s the investigation into the $100,000 grant the Ag Dept. gave Salahi to write a report on the Virginia wine industry, the State suspects was a copy/rehash of someone else’s report. The bad check the Salahi’s gave to the State in the amount of $21,000 that Salahi’s were sued for rather than prosecuted…they have yet to pay the judgement. And finally, there is the State investigation of Salahi’s Virginia Wine Country tours. An investigation was launched after several victims filed criminal complaints. Word has it that the AG’s office is ready to sweep this under the carpet, alledging this is just a civil matter even though the Salahi’s entice victims to book phantom vehicles offered on their web site that don’t exist and don’t show up on the day of booking due to mechanical problems, but Salahi’s refuse to return the victims’ money. A civil matter? Sounds like deliberate criminal fraud to me.