LOS ANGELES (CN) - The Children's Burn Foundation claims that a "questionably charitable" New York corporation used its name and trademark "to deceive the public into making supposedly charitable contributions to a sham charity."
The Burn Foundation claims the defendant American Foundation For Disabled Children "conspired with professional fundraisers to steal the potential donors and goodwill associated with legitimate charity CBF," and funneled as much as 94 percent of the donations they got to the commercial fundraisers.
And, the Burn Foundation says, as it tried to make the defendant stop abusing its name, the defendant had the brass to send "the California Department of Justice a check for $3,314.00 supposedly for donations made in California using CBF's name, in a belated attempt to stave off any sort of action that may be brought against it by the California Attorney General."
The Children's Burn Foundation (CBF), a nonprofit founded in 1985, claims the defendants American Foundation For Disabled Children (AFDC) and fund-raiser Courtesy Call "purposefully used CBF's name and mark in order to create the impression to willing donors that they are, in fact, CBF in order to further its 'fundraising' efforts."
Doug Mancino, Chairman of CBF's Board of Trustees told Courthouse News in an interview that "the bulk of the money" donated to AFDC "stayed in the hands of professional fundraisers."
"We registered our service mark 'Children's Burn Foundation' with the United States Patent and Trademark Office in 2010. They decided to use our name because their name is tarnished in the eye of public opinion," Mancino said. He said the Burn Foundation filed suit because "it was clear to me these guys weren't going to quit."
According to the federal complaint: "AFDC is a sham charity that has diverted approximately half, and perhaps as much as 91 percent of the funds it raised in the last fiscal year to professional fundraisers. These professional fundraisers, such as Courtesy Call, have had numerous run-ins with state charities regulators that have publicly stated that it has used 'dishonest and distasteful' tactics and retained excessive percentages of monies raised."
Also named as defendants are Newport Creative Communications, of Duxbury, Mass.; Community Support, of Milwaukee; AFDC president Joseph Fuller; AFDC treasurer John Cryan; AFDC vice president John Battista; and AFDC secretary John Lionna, all of Staten Island.
The complaint adds: "From at least June of 2011, defendant telemarketers Courtesy Call, Newport Creative, and Community Support acted as agents of AFDC to fraudulently obtain funds from unsuspecting donors for AFDC, using CBF's Service Mark. ...
"On information and belief, from at least June 2011, defendants Fuller, Cryan, Battista, and Lionna violated their fiduciary duty to AFDC and each acted outside the bounds of their positions and the law by directing, overseeing, and knowingly allowing the agent telemarketers to attempt to and actually fraudulently obtain funds from unsuspecting donors using CBF's service mark."
Specifically, the charity claims, AFDC through its co-defendants mailed solicitations to potential donors using the CBF name and logo, and represented that AFDC and CBF were affiliated. It claims that Courtesy Call telemarketers referred to the Children's Burn Foundation when asking for contributions.
But CBF says it is "not associated with AFDC in any way," did not authorize the mailings and "does not employ telephone solicitations to request donations."
The CBF says that after it complained to AFDC, Cryan told it that his group would stop using the CDF name and would modify the logo on its mailings to: American Foundation For Children With Burns.
"However, the text, signature line, the address window, and the return address window all use the name 'The Children's Burn Foundation,'" according to the complaint.
"In the same mail solicitation, AFDC misrepresented that CBF retained defendant Courtesy Call to assist in the fundraising, when it did not and in fact CBF does not use mail or telephone solicitations.
"In the same mail solicitation, AFDC used CBF's name in soliciting charitable contributions without obtaining the consent of CBF to do so.
"In the aforementioned mail and telephone solicitations, AFDC misrepresented that contributions were to benefit CBF, when in fact approximately 94 percent of funds solicited were used to pay commercial fundraisers such as Courtesy Call, Newport Creative, and Community Support.
"On information and belief, as a further admission of its wrongdoing, on or about September 26, 2011, AFDC sent the California Department of Justice a check for $3,314.00 supposedly for donations made in California using CBF's name, in a belated attempt to stave off any sort of action that may be brought against it by the California Attorney General."
CBF says it has asked AFDC to cease and desist but AFDC "failed and refused to comply with CBF's demand in this regard."
"Quite simply, AFDC conspired with professional fundraisers to steal the potential donors and goodwill associated with legitimate charity CBF to entice unsuspecting patrons to part with their money to fund an organization that is questionably charitable at best, and most certainly is not the organization these generous people believed they were helping," the complaint states.
CBF is represented by Douglas Mancino of Los Angeles. It seeks an injunction and damages for trademark infringement, false designation of origin and unfair competition.
AFDC did not immediately respond to a request for an interview.
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