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FTC Shuts Down Massive Robocall Charity Scam

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A robocall operation that claimed it was raising money for charities, but actually pocketed millions for shaddy telemarketers, has been shut down, according to the FTC. 

On Thursday, the FTC and agencies from 38 states announced they had stopped the telefunding scheme, which bombarded 67 million consumers with deceptive fundraising phone calls.

The fake fundraising—which lasted over a decade and involved making over a billion calls—was also extremely lucrative. According to the FTC, the culprits behind the scheme collected over $110 million. 

“Defendants knowingly duped generous Americans into donating tens of millions of dollars to nonprofit organizations that they claimed helped breast cancer patients, the families of children with cancer, homeless veterans, fire victims, and more,” reads the complaint from the FTC. “In reality, almost no money went to the charitable purposes the Defendants described to donors.”

Federal officials say Associated Community Services (ACS), a Michigan-based company, was the primary party responsible behind the scheme. This included tricking US residents, oftentimes the elderly, into making donations to the sham and now-defunct charities known as Cancer Fund of America and the Breast Cancer Society of America. 

At least 90% of the 1.3 billion fundraising calls ACS made from 2016 to 2019 involved pre-recorded messages. The operators behind the fundraising calls would then listen “using three keyboards to select the audio clips to play in response to call recipients’ questions,” the complaint says.

“The complaint also charges ACS with making harassing calls, noting that ACS called more than 1.3 million phone numbers more than ten times in a single week and 7.8 million numbers more than twice in an hour. More than 500 phone numbers were even called 5,000 times or more,” the FTC said. 

The FTC and state agencies sued to dissolve Cancer Fund of America in 2016, and ACS shut down in September 2019. However, the FTC complaint claims a few of the people behind ACS continued the fake fundraising schemes through alleged spin-off companies—Directele Inc. and the Dale Corporation. 

To stop the fraud, the FTC announced it had reached settlements, pending court approval, to dissolve Directele and the Dale Corporation. The people behind the companies, including ACS, are also “permanently prohibited” from any fundraising work or from using robocalls for telemarketing, the FTC says. 

The commission also wants the scammers to pay back $110 million. However, the FTC says the penalty has largely been suspended, due to the defendants’ “inability to pay.” Nevertheless, the FTC points out the various people behind the fraud have been turning over what assets they do have, including the proceeds from the sale of a vacation home in Michigan and a ski boat.

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