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State Cracks Down on Bogus Charity

CHARLOTTE, N.C. (CN) - A North Carolina woman set up bogus "charitable" businesses, falsely claiming that sales from candy machines would be used to find missing children, the state attorney general says. In fact, the vendors took all the money from candy, and she took all the money from selling the vending machines, the state says.

Defendant Marilyn Broerman, of Charlotte, set up her three defendant companies - Creative Marketing Solutions, The Beacon Project and Universal Placement Services - and falsely advertised that vendors could make $3,000 a week by buying her plastic candy dispensers and setting them next to the cash registers at businesses, according to the complaint in Wake County Court.

She charged vendors $8,000 to $50,000, depending on how many dispensers they bought, the complaint states, and charged them again if they asked for help on how and where to place the gizmos.

Broerman never registered her businesses and the claims of earnings with which she lured vendors were exaggerated and unsupported by evidence, the attorney general says.

"Defendants also instructed their vendors to represent that the money placed in the dispensers would be used for the charitable purpose of locating missing children when, in fact, all of the money from the sale of candy went to the vendors and all the money from the sale of the dispensers went to defendants," the attorney general says.

That ain't a charity, the attorney general adds.

The state seeks an injunction and civil penalties of $5,000 per violation of the state's Unfair Trade Practice Act and $10,000 per violation of the Charitable Solicitations Act.

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