Leader of massive charity scam run out of NJ owes millions — AG
A sprawling network of fake charities based in New Jersey that scammed donors out of millions of dollars over a number of years has been shut down, state Attorney General Gurbir Grewal announced Wednesday.
Mark Gelvan, a former Montville resident who now lives in a Florida, controlled multiple companies accused of deceptive fundraising activities in a lawsuit filed by New Jersey, the Federal Trade Commission and the state attorneys general of New York, Minnesota and Virginia.
According to the complaint and individual settlement agreements filed in federal court, Gelvan’s various sham fundraising campaigns claimed to help homeless veterans, retired and disabled law enforcement officers, breast cancer survivors and others in need, when almost none of the donations made it to those avowed causes.
Thomas Berkenbush, of Wanaque; William English, of Belvidere; and Damian Muziani, of the Erial section of Gloucester Township in Camden County, were also named as defendants in the lawsuit, alongside Gelvan, as well as several companies named.
According to the complaint, Gelvan and his associates kept as much as 90% of the money they raised for phony charities as payment for their "fundraising services," which operated mainly from office space in both Montville and Reno, Nevada.
Little of the money raised – sometimes less than 2% – went to the so-called charitable missions.
The complaint also said Gelvan and his co-defendants had operated their deceptive fundraising scheme since at least 2010, bilking “tens of millions of dollars” from well-meaning American donors persuaded to give to such sham charities as the following:
- National Vietnam Veterans Foundation, Inc.
- Breast Cancer Survivors Foundation, Inc.
- Reserve Police Officers Association
- Disabled Police and Sheriff’s Foundation, Inc.
- Center for American Homeless Veterans, Inc
- Crisis Relief Network
According to the federal complaint, Gelvan and his associates used telemarketing and mailings to solicit donors to “support worthy causes” such as care packages to Vietnam veterans in need, transitional facilities for homeless veterans and grants to the family members of fallen officers.
As reported in 2017 by the Center for Public Integrity, one of the companies Gelvan was associated with, Outreach Calling, raised more than $118 million on behalf of about two dozen charities from 2011 to 2015 alone.
An analysis of records by the report found the company kept $106 million of that amount.
In reality, the complaint said, the defendants “fundraised for sham charities, several of which have been shut down through state and federal law enforcement actions.”
The same complaint also said the operators of the sham charities for whom Gelvan and his associates raised funds typically spent the majority of the remaining funds “to pay themselves and family members, and for administrative costs.”
Gelvan — while on the hook for $56 million alongside Outreach Calling, Outsource 3000 and Production Consulting, according to his settlement — will be required to surrender $800,000.
He also must surrender the net proceeds from the sale of two New Jersey properties in Montville and Wayne.
Based on property records, the Montville mansion owned by Gelvan's wife, Lina, at 1A Masar Road sold for $2.68 million in June. The six-bedroom, "10.1 bathroom" home was shot for a video listing posted to Youtube by a Century 21 realtor. The video tour includes the sprawling entrance way and kitchen, an indoor pool and sauna and sizable movie theater screening room, encompassed on a 12-acre property.
As reported by the Center for Public Integrity, the Gelvans bought the property together in 2001, but Lina Gelvan became sole owner in 2002, shortly after a complaint was filed against Mark Gelvan by the New York Attorney General’s office.
Berkenbush has been determined to owe over a $1 million, as partially suspended due to his inability to pay. He will be required to surrender $5,000.
English has been determined to owe more than $873,000, but will be required to surrender $30,000.
Muziani must surrender over $12,000 as part of his owed $484,000, also partially suspended due to his inability to pay, according to his settlement.
Should any of the defendants fail to pay what they owe or be found to have lied about their ability to pay, the full amount of their judgments will be due immediately, according to the terms of the settlements.
“It’s disgraceful that the defendants in this case persuaded people to donate their money to help cancer survivors, disabled law enforcement officers and homeless veterans, only to keep most of that money for personal use,” Grewal said in a written release.
The attorney general continued “It’s intolerable that so much of this nationwide scam was perpetrated from New Jersey. We thank the Federal Trade Commission and our partners in other States for working with us to put an end to the defendants’ scheme and to redirect their ill-gotten funds to real charities that do great work for those in need.”
Andrew Smith, Director of the FTC’s Bureau of Consumer Protection said in the same written press release “If you’re giving to charity and want to make sure your donations count, start at ftc.gov/charity to learn how to spot the scams.”
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