Nonprofit Newswire | NY AG Nixes Sham Charity

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June 25, 2010; Source: New York Daily News | Which of Dante’s circles of hell should be reserved for the charlatans who steal charitable donations meant for the homeless? The fourth for avarice, the eighth for fraud, the ninth for betrayal, or all nine? The only circle that New York attorney general Andrew Cuomo could design for the rip-off artists who scammed money under the camouflage of the United Homeless Organization is the one which permanently bars them—Stephen Riley and Myra Walker—from running nonprofits in New York State in the future.

Anyone who ever traversed New York City thoroughfares outside of transportation hubs like Penn Station, Times Square, Port Authority, Union Square, or Grand Central has encountered people with the clear bluish United Homeless Organization jugs on folding tables. If you asked how the money would be used to help the homeless, you were assured that UHO was a legitimate organization with real programs, albeit no documentation to back that up.

It was about an obvious a scamola as you could find, but Riley and Walker operated the UHO since 1987 apparently with no license, no program, no nothing except an ability to set up the fundraising tables and to pay themselves. The way the scheme operated was that Riley and Walker would lease the tables, jugs, and UHO banners to people for $15 a day. The table workers would be able to keep whatever they would be able to raise after paying the $15. According to the court and the AG, Riley and Walker took about $9,000 a week from the program in addition to paying for personal expenses out of UHO accounts.

The New York Times notes that $173,000 disappeared from UHO accounts between January 2005 and August 2009. By the time of the court proceedings brought by the AG, the United Homeless Organization didn’t have any money to pay for counsel. Riley contends that he is a victim, that the people who were collecting and pocketing the table money were homeless, therefore the UHO really was a homeless assistance program. What a bunch of malarkey!

It’s our feeling that the numbers don’t make sense. Riley and Walker must have been making more than what was reported. The only penalty is that they’re barred from running other nonprofits in New York? Expect two follows: some new organization will begin using the United Homeless Organization fundraising technique to scam money from well-meaning donors in New York, and Riley and Walker will pop up in the news again, in New York or someplace else. When it comes to some charity scams, we’re running around in concentric circles of hell.—Rick Cohen