MINNEAPOLIS (CN) – A Minnesota man dupes consumers into buying household items at “grossly inflated prices” by falsely claiming the profits go to the disabled workers who created or packaged the products, Attorney General Lori Swanson claims in Hennepin County Court. She says the so-called charity “is designed to generate profit” for the owner, “and does very little to help individuals with disabilities.”
“Defendants are perpetuating a fraud on Minnesotans by deceptively exploiting Minnesotans’ charitable goodwill for their own financial gain,” Swanson claims.
James Bushinski, president of the Florida-based Northern Handicapped Products and the now-defunct Northern Handicapped Assembled Products, falsely claims his companies employ more than 30 physically and developmentally disabled workers, according to the complaint.
Bushinski allegedly suckers consumers into buying everyday items such as garbage bags, light bulbs and greeting cards at significantly inflated prices by claiming that his disabled workers created or packaged the merchandise.
“What the defendants do not disclose to consumers is that the only person with disabilities who counts, packages and assembles these products is Bushinski himself,” Swanson claims. “This is especially misleading in light of numerous representations made by defendants companies that they benefit many workers.”
Swanson says Bushinski buys some of his merchandise from state-run and nonprofit organizations that employ workers with disabilities, but he never donates the proceeds of his sales to charities. And much of his product line comes from retail stores like Wal-Mart and Sam’s Club, Swanson says.
“Defendants create the impression that the money from the sales will go toward supporting the individuals with disabilities they ’employ’ and who purportedly created or packaged the products being purchased,” the complaint states. “In fact, defendant companies are for-profit entities that do not directly employ third-party workers with disabilities.”
The nonprofits that sell some products to Bushinski’s companies have reported that “defendants’ purchases are not of a sufficient volume to improve or otherwise affect the lives of workers with disabilities who work at the state or nonprofit facilities,” according to the complaint.
If Bushinski stopped ordering products from these companies, no disabled worker would lose his job or earn less money, Swanson says.
Swanson says Bushinski sells primarily to Minnesotans, but has also defrauded consumers in Pennsylvania, Wisconsin, Florida, Illinois and Michigan.
In addition to the “inherently deceptive” names and logos of Bushinski’s companies, his telemarketers allegedly use a sales pitch that implies that profits from sales will directly benefit the disabled workers the companies claim to employ.
One line from the script tells consumers: “The more you can take and use, the more work you will be providing for our disabled workers,” according to the complaint.
“Defendants’ scripts also direct defendant companies’ sales representatives to refer to the merchandise as a ‘gift,’ which implies that the consumer is not actually purchasing a product but receiving the product in appreciation for giving money to a charitable cause,” the lawsuit states.
Bushinski sells his merchandise for up to 800 percent of their retail value, Swanson claims. For example, he allegedly buys 24 light bulbs for $26.95 and resells a dozen for $99.
Swanson says the business “is designed to generate profit for Bushinski and does very little to help individuals with disabilities.”
She says Bushinski uses the profits he earns to pay for dining out, groceries, liquor, hair salon visits, musical instruments and his children’s school fees.
The attorney general’s office investigated a Bushinski company for operating a telemarketing scam in 1996, and Bushinski settled the matter by agreeing, among other things, “not to engage in charitable solicitation fraud,” according to the complaint.
Swanson seeks restitution and civil penalties, alleging charitable solicitation fraud, consumer fraud, deceptive business practices and false advertising.