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Charity Con Man Gets 15 Years for Bilking 'Most Vulnerable'

Telemarketers hired by unregistered charitable groups in Costa Mesa fraudulently raised $7 million in donations. An appeal is planned.

March 09, 2004|David Reyes | Times Staff Writer

The founder of a sham charitable organization that scammed more than $7 million under the guise of helping veterans and disabled children was sentenced Monday in federal court to 15 years in prison and fined $25,000.

Gabriel Bernardo Sanchez, 37, declined to make any statements about his conviction before U.S. District Judge David O. Carter in Santa Ana.

William J. Kopeny, Sanchez's attorney, said he plans to appeal.

Sanchez and childhood friend Timothy James Lyons, 35, of Costa Mesa used telemarketers to solicit donations from thousands of people, including "the most vulnerable," such as the elderly, the judge said.

Sanchez founded the First Church of Life in Costa Mesa 10 years ago and used it as an umbrella organization to operate several unregistered charitable groups, including American Veterans Help Fund and Americans Against Drugs, according to a 22-page indictment.

During the hearing, Carter repeatedly described the church as "a company" or "purported charity."

"I believe you first used [the umbrella organization] as a shield, then it became a crutch," Carter said. "You took advantage of many good-hearted Americans."

The two men used 80% of the money to pay the telemarketers.

They kept the rest, nearly $1.4 million, for rent, vehicles and other personal expenses.

In addition to the fine, Sanchez was ordered to pay $4,400 in restitution.

Carter rejected Kopeny's argument for a shorter sentence, giving Sanchez one similar to Lyons, who was sentenced last month.

Sanchez ran an extensive criminal organization that enhanced collections, the judge said, because they "reloaded" numerous victims -- calling the same donors again and again.

Carter also emphatically rejected allowing Sanchez to perform 500 hours of community service as part of his three years' probation after prison.

"I do not want Mr. Sanchez participating in any community service. He is untrustworthy and unreliable," the judge said.

Calling it a legitimate charity when distributing only a few thousand dollars to reputable charities after millions were raised "is ludicrous," Carter said.

Lyons' company, North American Acquisitions, hired telemarketers to call potential donors, then sent couriers to people's homes to collect the money.

During his trial, Sanchez testified that $4,800 of the funds collected went to various charities, said Assistant U.S. Atty. Ellyn Lindsay, who prosecuted the case.

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