RIVERHEAD, N.Y. (CN) – The Coalition Against Breast Cancer is “a sham charity that has diverted nearly all of the millions of dollars raised in the name of breast cancer to its officers, directors and fund raisers,” the New York attorney general says.
The bogus charity “squandered and misused virtually all of the $9.1 million it raised in the name of breast cancer” in the past 5 years, the prosecutor says.
Attorney General Eric Schneiderman says defendants Andrew Smith and Garrett Morgan launched the scam in 1995, “to exploit the breast cancer movement for their personal financial benefit, at a time when both were in need of cash.”
The distressing, 42-page complaint, virtually scorches the paper it is written on: “Falsely claiming research affiliations with hospitals such as Memorial Sloan-Kettering and using other lies and exaggerations, defendants deceive donors into believing that their donations will help eradicate breast cancer through research, mammogram screening and other programs. In reality, CABC spends none of its funds on eradicating cancer, nor does CABC have any research affiliation whatsoever with Memorial Sloan-Kettering or any other hospital, nor does it conduct or fund any research on breast cancer or any other cancer. Nor does CABC perform any mammograms or any other breast cancer screening nor is it affiliated with any mammography facilities and, as its own records show, CABC spends virtually nothing on breast cancer prevention.
“Instead, in the last five years alone – a period that has witnessed 200,000 women die from breast cancer and millions more fighting to survive it – CABC has squandered and misused virtually all of the $9.1 million it raised in the name of breast cancer. By its own records, during this period, CABC spent less than 4 percent of the donations it received on any purported charitable programs, and almost none of the donations – less than one-half of one percent – went for charitable purposed authorized under its certificate of incorporation. In 2008, a year in which CABC raised over $1.4 million from the public, it spent a mere $374 for mammograms. In the last three years, despite raising over $4 million, CABC funded mammograms for only 11 women.”
When Smith and Morgan, “longtime friends and business associates,” started their scam, the attorney general says, “Smith was emerging from personal bankruptcy and Morgan was being investigated for his role in a fraudulent meals-on-wheels charity, which was later ordered permanently shut down.”
The prosecutor says Morgan, Smith and their cohorts had “no connection to the breast cancer cause. From its inception, CABC has served as a cash machine for Morgan, Smith and other insiders.”
The operation is simple, the attorney general says: “pick a sympathetic cause; lie and mislead donors about how donations will be used; provide a veneer of legitimacy by creating a website to exaggerate the organization’s mission; spend a token amount on charitable programming; divert nearly all of the funds raised to the founders and others insiders; and ensure that there is no board oversight.”
Schneiderman says Smith “handpicked the board,” which included his former wife, “his girlfriend, Debra Koppelman, and her friend Patricia Scott,” both of whom are named as defendants, and neither of who have any experience in the breast cancer cause, or nonprofit management, “much less the capacity to fulfill their fiduciary responsibilities as directors.”
The state also sued Morgan’s “for-profit telemarketing company, the Campaign Center.
Morgan, Smith, Koppelman, Scott and the two corporations are the defendants.
CABC is based in St. James, N.Y.
Smith lives in Aquebogue, N.Y.
Koppelman lives in St. James, “in a home owned by Smith.”
Scott lives on the Upper East Side.
Morgan lives in West Islip, N.Y. He founded, owns and is president of the Campaign Center, which is based in Lindenhurst.
The complaint was filed in Suffolk County Court.
The attorney general seeks dissolution of the corporations, an injunction and penalties for 15 causes of action, including deceptive trade, breach of fiduciary duties, “persistent fraud,” false filings, and scheming to defraud.