Most of us have the gift of human compassion. Whether it is the victim of September 11th or the little orphan across the street we are glad to help out. Unfortunately, thieves know that and take it to their advantage. Before you give anything to a charity, perform your due diligence before you contribute.
Many scam operations were popping up when hurricanes were roaming through the lands of America and the tsunami disaster that swept across the Indian Ocean, striking coastal regions of Sri Lanka, India, Indonesia, Thailand, Bangladesh, Burma and Malaysia. Be wary of fake donations during a crisis. Sadly, but low life scammers turn disasters into their own money making opportunities. Setting up a phony charity is pretty easy, so below are some tips to avoid charity scams and fake charities.
TIPS
- Never give payment information to anyone calling YOU
- Carefully check the name of the company! Charity scams use similar to original names to cause confusion and obtain your donations. Example: National Cancer Society (SCAM) instead of American Cancer Society (REAL)
- Avoid all charities that use a “pitch” filled with a significant amount of emotional words and or images
- Ask the charity to send you printed material via mail. If the material does not contain details on exactly how the money is used and the percent of donations which actually reach the given cause, do not contribute. If some informations are not written and you still would like to know the details, call them. Legitimate charities withstand secrecy and never hesitate to prove who they are, what they do and how they do it
- Check the company with the Better Business Bureau
- Don’t give in to pressure or hard sell tactics and if the charity representative pressures you to give money immediately or as soon as possible, get even more suspicious
- Be careful if the “charity” accepts an online payment processor like paypal and a PO Box as their only payment options. All charities should support the wire transfer also as a PO BOX is anonymous and we know how easy it is to open up a fake paypal account. Reputable charities have a street address and a phone number
- If you received a charity request by email check the email address. Is it from a free provider like hotmail or gmail? A charity sending out emails should also have a top level domain like .org, .com, .net and the email should come from this domain. The email to which the payments should go should also be a real domain and be part of their website. Something like donations@charityname.com or similar. However, as a general rule reputable charities don’t spam and you won’t receive an email from them directly without your prior inquiry
Before contributing also use these following resources to help you on your way. Even a single dollar is a dollar too much if it comes into the scammers wallet.
January 15th, 2008 at 12:00 pm
Web page: http://www.maine.gov/tools/whatsnew/index.php?topic=SEC-LegalDocs&id=27515&v=Default
State of Maine
Office of Securities
21 State House Station
Augusta, Maine 04333-0121
IN RE: NOTICE OF INTENT
06-073
JAMES L. CLIFFORD
ALLEGATIONS
1. James L. Clifford (“Clifford”) (CRD # 1419478) is an individual who has been licensed in Maine as a sales representative or agent since at least 1985. His last known address is 955 Eastern Avenue, Holden, Maine 04429.
2. From December 4, 1997, to the present, Clifford has worked as a sales representative or agent at the Brewer, Maine, branch office of Investors Capital Corp. (“ICC”).
3. Pearl P. Schoppe (“Ms. Schoppe”) was a life-long resident of Orono, Maine, and the valedictorian of the 1936 graduating class of Husson College in Bangor, Maine.
4. In May of 1996 Ms. Schoppe established a living trust (the “Schoppe Trust”) with herself as trustee and with two of her relatives designated as trustees upon her death. The original trust document directed that upon Ms. Schoppe’s death, after payment of any of Ms. Schoppe’s debts, expenses and taxes, and certain distributions, the remainder of the trust property was to be held in trust for Husson College with income distributions to fund a scholarship program.
5. Ms. Schoppe was conservative with her investments. She essentially bought only certificates of deposits and fixed annuities.
6. In October of 1998, Ms. Schoppe, then age 80, amended the trust document to, among other things, change the trustee upon her death to Clifford. The amendment also changed the provision regarding the distribution of the remainder of her trust property. As amended, instead of the property being held in trust for Husson, the trust instrument dictated that the property was to be “distributed to the National Heritage Foundation F.B.O. Pearl P. Schoppe Foundation.”
7. The charitable purpose stated by Ms. Schoppe on the National Heritage Foundation application was “Assist students of the Greater Bangor/Brewer, Orono/Old Town, ME area who need financial aid to attend Husson College. To be paid out interest only 80% of interest to go to students, 20% of the interest to go back into the Foundation so foundation will continue to grow.”
8. Ms. Schoppe died on January 19, 2000.
9. On March 7, 2000, in Singer Island, Florida, Clifford and John T.”Dock” Houck, II, CEO of National Heritage Foundation, (“NHF”) completed the paperwork for “National Heritage Foundation Inc. FBO Pearl Schoppe FNDTN” to purchase a $150,000 variable annuity from Conseco Variable Annuity Insurance Company through ICC, using funds from the Schoppe Trust.
10. On May 11, 2000, Clifford sent an additional $50,000 from the Schoppe Trust’s checking account to Conseco to add to the variable annuity.
11. The subaccounts chosen by Clifford and Houck were largely more-risky growth funds, when Ms. Schoppe’s stated intent and investment history dictated the use of more conservative income-producing investments.
12. The variable annuity sold by Clifford to the foundation was unsuitable for the charitable purposes expressed by Ms. Schoppe. There was no tax benefit and no value to having a death benefit on the life of Mr. Houck to offset the higher costs and reduced liquidity of the investment.
13. Clifford received $12,600 in commissions on these transactions. In addition, Clifford has paid himself trustee fees exceeding $42,000.00 from the trust assets despite the fact that he appears to have provided little if any valuable services to the trust.
14. Since the purchase of the variable annuity in March of 2000, Husson College has received no scholarship money from the Pearl P. Schoppe Foundation.
15. Under federal law, variable annuities are securities and the offer and sale of variable annuities is regulated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933 and Securities Exchange Act of 1934.
16. The NASD is a national securities association registered with the SEC under §15A and in accordance with the provision of §19(a) of the Securities Exchange Act of 1934.
17. NASD Rules are filed with the SEC and promulgated under §19(b) of the Securities Exchange Act of 1934. NASD rules apply to “all members and persons associated with a member. Persons associated with a member shall have the same duties and obligations as a member” under the association’s rules. NASD Rule 0115.
18. ICC is a member of NASD and Clifford is a person associated with ICC.
19. NASD Rule 2310 requires that a member have reasonable grounds for believing that a recommended purchase is suitable for a customer based on the facts disclosed by the customer including the customer’s investment objectives.
20. By virtue of his training and experience, Clifford knew the requirements of NASD Rule 2310. Through his customer relationship with Ms. Schoppe, Clifford knew her investment objectives and the charitable purpose for which she established the Pearl P. Schoppe Foundation. Thus, Clifford intentionally or knowingly failed to comply with NASD Rule 2310. 32 M.R.S.A. §10313(1)(B).
21. By using funds of the Schoppe Trust to purchase an unsuitable investment, Clifford engaged in unlawful or unethical conduct in the securities business. 32 M.R.S.A. §10313(1)(G).
22. Pursuant to 32 M.R.S.A. §§10313 and 16702, the Securities Administrator may, after notice and opportunity for hearing, issue an order to revoke the license of a licensee or impose a bar on a licensee if the Securities Administrator finds that the order is in the public interest and that the licensee: (1) has engaged in unlawful, unethical or dishonest conduct in the securities business; or (2) has intentionally or knowingly violated or failed to comply with a rule under the Securities Exchange Act of 1934.
NOTICE
Notice is hereby given that the Securities Administrator intends to issue an Order to Revoke Clifford’s Agent License and Censure Him or Bar Him from Association under 32 M.R.S.A. §§10313(1) and 16702(1).
If Clifford wants to request a hearing in this matter, he must do so in writing within thirty (30) calendar days of the date of this Notice of Intent. 32 M.R.S.A. §§10708, 16702(1).
Date: November 28, 2006 /s/ Michael J. Colleran
` Michael J. Collera
Securities Administrator
Date: November 28, 2006 /s/ Bonnie E. Russell
Bonnie E. Russell
Assistant Securities Administrator
Date: November 28, 2006 /s/ Willis P. Smedberg
Willis P. Smedberg
Investigator/Examiner
Last Updated: December 20, 2006 4:42 PM
Posted by: Eduardo Alarcon
19319 Inverness Dr.
Spicewood, TX 78669
(512) 217-6655
Eduardo.alarcon@sbcglobal.net
May 6th, 2008 at 5:51 pm
The National Heritage Foundation/Congressional District Programs and their salesmen are under investigation by Federal and State agencies.
If you have any questions please feel free to contact the owner of the NHF, JOHN HOUK, at (561) 301-3891 or dock@nhf.org.
Posted by:
Eduardo Alarcon
19319 Inverness Dr.
Spicewood, TX 78669
(512) 217-6655
eduardo.alarcon@sbcglobal.net