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Fund-Raiser Accused of Violating Court Restrictions

February 13, 1992|PHIL SNEIDERMAN | TIMES STAFF WRITER

GLENDALE — The head of a Glendale-based fund-raising group that was ordered to stop soliciting donations over the telephone last year has been taken to court again by state officials amid allegations of financial misconduct.

At a Los Angeles Superior Court hearing last Friday, state attorney general's officials alleged that fund-raiser Frank E. Burford improperly moved donations into his personal account and withdrew excessive expense money.

Judge Stephen O'Neil ordered Burford, who also runs a Glendale accounting business, to appear in court Feb. 28 to explain why he should not be held in contempt.

Burford was the administrator of American Veterans Committee, which employed telephone solicitors seeking donations for veterans, blind children and battered women.

Another Superior Court judge ordered the group to shut down operations in February, 1991, because it had engaged in illegal fund-raising tactics. Last year's preliminary injunction allowed the organization to pay $6,700 in outstanding debts but otherwise froze the group's accounts indefinitely.

Deputy Atty. Gen. William S. Abbey said a recent audit found that Burford had violated the restrictions imposed last year.

The group has spent $11,320 on outstanding debts, and Burford moved another undisclosed sum into his personal account, Abbey alleged. The state prosecutor also claimed that Burford improperly deposited into his personal account donations received after last year's court ruling.

"We find that they have not complied with the court's previous orders," Abbey said.

Burford is expected to respond to these allegations on Feb. 28. He and his attorney, Gerald McNally Jr., did not return calls from The Times.

If found in contempt, Burford could be fined up to $1,000 and ordered to serve up to five days in jail on each of four counts alleged by the state.

Abbey said he is also trying to determine whether American Veterans Committee, which recently changed its name to Southern California Assn. of Charities, has continued to seek donations, in violation of the court order.

"We've had some evidence that solicitation is still going on," the prosecutor said. "It raises questions."

State investigators obtained the injunction last year after finding that the group had not filed annual financial reports with the state's Registry of Charitable Trusts, as required by law.

In addition, state officials said, the Glendale group told donors their gifts were tax-deductible, even though the organization was denied a federal tax exemption in 1989 and lost its state exemption in May, 1990.

According to state records, the group raised more than $400,000 during the fiscal year ending Aug. 31, 1989, but gave less than 5% of this to programs that serve veterans, battered women and others. The remainder was used to cover fund-raising costs, the organization reported.

The percentage given to service programs was far below the average among Los Angeles fund-raisers, but the U.S. Supreme Court has ruled that states and cities cannot mandate how much a fund-raiser must donate to a charity.

The Glendale organization is the target of a lawsuit filed by a national organization, also called American Veterans Committee, which was founded in 1943 and has headquarters in Washington, D.C.

That suit, filed in August, 1990, alleges that the Glendale group illegally used the national committee's name to raise funds.

Florice Hoffman, an attorney for the Washington-based American Veterans Committee, said she recently received a letter from the Glendale group, stating it had changed its name. But Hoffman said the lawsuit will not be dropped.

"We want an accounting, and we want the money that people thought they were giving to this American Veterans Committee to be turned over to (the national) organization," she said.

The next court hearing on the lawsuit is scheduled for Aug. 11, Hoffman said.

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