Founder of Defunct Charity Indicted - Attorney General Martha Coakley -...

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MARTHA COAKLEY
ATTORNEY GENERAL

For Immediate release - March 25, 2011

Contact
Harry Pierre (617) 727-2543

Founder of Defunct Charity Touched by Angels Indicted for Allegedly Stealing Tens of Thousands of Dollars in Donations Intended for Families
Defendant Promised To Provide Financial Assistance To Families Who Had Lost Loved Ones Or Were Dealing With Serious Medical Conditions, Then Allegedly Stole Money For Herself BARNSTABLE - The founder of a Cape Cod charity that was organized to provide financial assistance for families who had lost loved ones or were dealing with serious medical situations has been indicted for allegedly stealing tens of thousands of dollars for herself, according to indictments returned today by Attorney General Martha Coakley. The defendant and organization were also charged with fair labor violations and for operating an illegal lottery scheme. Gina Clark, age 40, of Marstons Mills, was indicted by a Barnstable County Grand Jury on charges of: Larceny by Embezzlement over $250 (15 counts) Larceny by Embezzlement under $250 Gross Fraud Illegal Lottery Scheme Minimum Wage Violations (10 counts) Overtime Law Violations (2 counts) Failure to Provide Proper Paystub Independent Contractor violations Her charitable organization and corporation, Touched By Angels (TBA), was indicted for the same labor violations plus 14 counts of Larceny by Embezzlement over $250, one count of Larceny by Embezzlement under $250, and gross fraud. "These families were targeted by this defendant and sought her help after going through truly traumatic circumstances, either losing a family member or dealing with serious medical conditions," AG Coakley said. "We allege that this defendant took advantage of their vulnerable situation to victimize them again for her own personal gain. By promising these victims financial support and then keeping the money for herself, we allege that this defendant stole tens of thousands of dollars from families in need." From October 2007 through August 2010, Clark operated Touched By Angels, a non-profit charity and corporation which raised funds to help local families in financial need due to a tragedy or illness. Clark promised to raise funds on behalf of deserving families, selected by TBA usually for a one month period each. The financial stresses that the sponsored families were dealing with arose either from the recent death of a family member (a parent or a child),

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Founder of Defunct Charity Indicted - Attorney General Martha Coakley -...

http://www.mass.gov/ago/news-and-updates/press-releases/2011/founder...

or from costs associated from serious medical conditions. Clark promised to pay out a percentage of the proceeds TBA raised to help the sponsored families with necessary medical and funeral costs and other living expenses. Investigators from both the AG's Criminal Bureau and Fair Labor Division began an investigation after being contacted by two former employees who alleged that Clark was not giving the designated amount of proceeds to these families. Investigators discovered that TBA would solicit funds for these families by: setting up tables in front of local businesses; holding fundraisers; selling merchandise; or offering numerous prizes through auctions and raffles. Clark and the families would then agree on what percentage of the proceeds would go to the family or the organization after a particular fundraising campaign was completed. Although TBA used a variety of fundraising techniques that resulted in thousands of dollars in donations from local businesses and members of the public, investigation has revealed that families only received a small portion of the proceeds raised on their behalf. In some cases families received as little as $50-$200. Investigators discovered that she defrauded over a dozen families out of tens of thousands of dollars, claiming that that under TBA's agreements with the families, they would only be entitled to receive proceeds from checks or online donations that specifically referenced the particular family - all other donations would become the property of TBA. Further investigation revealed that Clark's fundraising techniques also included operating and promoting an illegal lottery scheme, in which she and TBA staff solicited local businesses to donate items, such as merchandise, gift cards, and gift certificates. Clark and TBA staff informed these business owners that the items would be raffled off and the proceeds used to help the sponsored families. However, none of the proceeds raised through these unauthorized raffles went to help any of the sponsored families. Authorities also learned that Clark and TBA committed numerous wage and hour violations by misclassifying employees as independent contractors. Clark allegedly classified and paid all of TBA's workers as if they were independent contractors, even though they operated under TBA's direction and control, the services they performed for the organization were within the usual course of TBA's business, and the workers were not engaged in any similar independently established businesses. Many of these workers were allegedly not paid wages for all of the hours they worked, and in some cases Clark did not pay them the required overtime. In August 2010, the AG's Non-Profits and Charities Division did not renew TBA's application to solicit funds. Today, a Barnstable County Grand Jury returned indictments against both Clark and her organization. Her arraignment date has not yet been scheduled. In August 2010, the Attorney General's Not for Profit Organizations/Public Charities Division notified Clark and TBA that the organization's certificate to solicit funds would not be renewed and that it must cease all solicitation activities because of multiple complaints regarding the misuse use of funds and solicitation methods. The case is being prosecuted by Assistant Attorney General Steve Adams, with the Criminal Bureau and by Assistant Attorney General Karla Zarbo, with the Fair Labor Division. The investigation was conducted by Fair Labor Inspectors Paul Gordon, Liz Valadao, Celina Pendexter, Mario Paiva and Chief of Investigations Amy Goyer, and Criminal Bureau Investigators Jen Chaves, Jack D'Isidoro, and Director of Financial Investigations Paul Stewart, along with assistance from, Victim Witness Advocate Nikki Antonucci, Patricia Tapper, and state troopers assigned to the Attorney General's office. Barnstable Police Detective Edward Scipione and the Massachusetts Insurance Fraud Bureau also provided support. #########

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Founder of Defunct Charity Indicted - Attorney General Martha Coakley -...

http://www.mass.gov/ago/news-and-updates/press-releases/2011/founder...

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