Press Release

NEWARK - Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs have filed suit against a North Jersey telemarketing company that allegedly solicited unsuspecting New Jersey residents on behalf of charities that are not registered in New Jersey; and that failed to keep financial records, required by law, to ensure that solicited donations actually are provided to charities and used for charitable causes.

According to the State's seven-count civil complaint filed in Essex County, Paul J. Grossi, of Towaco, is the owner and operator of PJG Enterprises, LLC, with business addresses in Fairfield and Towaco. Grossi and PJG allegedly function as a paid fundraiser for charities even though, in violation of New Jersey's Charities Registration Act and Charities Regulations, they are not registered with the State and have not provided financial records or other documents required to ensure the integrity and transparency of charities and their paid fundraisers.

Using a "boiler room" setting, Grossi and PJG employ teenage telemarketers to solicit consumers in New Jersey and elsewhere, according to the complaint. In their phone calls to consumers, the telemarketers claim they represent charities with missions to help cancer patients, missing children, American veterans, or police officers.

Grossi also maintains post office boxes in New Jersey, in several charities' names; and Grossi and PJG have access to funds donated to charities, the State alleges. However, like Grossi and PJG, none of the purported charities are registered in New Jersey as required by law. New Jersey consumers therefore have no way of verifying whether donations made through PJG actually reach the charities, or of verifying how the charities spend any money they do receive.

"When consumers open their hearts and wallets to what they think is a good cause, especially in difficult economic times, they need to know exactly how their money will be used, and how much of their donation will actually help people in need," Attorney General Chiesa said. "When so-called charities and their fundraisers violate our transparency laws, they violate the trust of donors."

The complaint notes that the State's initial report about Grossi and PJG came from the parent of a 17-year-old female employee, who was concerned about the "salacious dress code" Grossi demanded of his young female telemarketers. When Consumer Affairs investigators inspected PJG's business premises in Fairfield, they noted that all of the telemarketers appeared to be teenage girls.

Paid fundraising companies, like the charities they represent, are required to register with the Division of Consumer Affairs and provide detailed, annual records of their fundraising activities. Additionally, they must file annual registration records for each individual employee who works as a paid fundraiser; and must provide copies of all contracts with the charities for whom they raise funds. If a fundraising company has custody of, or access to, funds raised on behalf of a charity, it must post a bond with the Attorney General's Office.

Grossi and PJG are accused of violating each of these requirements. PJG has not been registered with the Division since June 30, 2009. Grossi and PJG failed and refused to provide any of the required records to the Division of Consumer Affairs or its investigators, even when required by subpoena.

"We urge consumers to 'Investigate Before You Donate,'" Sharon Joyce, Acting Director of the New Jersey Division of Consumer Affairs, said. "Telemarketers who ask for your money to help sick children or American veterans are not always telling the truth. Even if the person is calling from an organization that has duly registered with the State, you should always ask how much of your donation will go toward real charitable programs, and how much will go into the pockets of a fundraiser. Call the Division of Consumer Affairs; we can help you make better-informed decisions about charitable giving."

According to the complaint, Grossi and PJG solicited funds on behalf of purported charities called "American Breast Cancer Federation," "American Veterans Foundation," "Association for Police Officers," "Breast Cancer Assistance Network," "Children's Cancer Assistance Network," "Operation Lookout for Missing Children," and "Our American Veterans." None of these supposed charities is registered with the Division of Consumer Affairs, and there is no exemption from registration that would apply to them.

The State alleges that telemarketers working for Grossi and PJG were given a script that read, in part: "This is the American Breast Cancer Federation. … We are having an annual fund drive to help provide free mammograms and life-saving diagnostic tests to women who can't afford them. Our top levels are the Gold $200, the Silver $100, and the Bronze $75. Can you help provide free mammograms to women who can't afford them with one of our top levels?" If the potential donor refused, the script called upon the telemarketer to continue: "I understand our boosters are more popular; they are just $55, $45, or $35. Can you help provide life-saving diagnostic tests to women who can't afford them with one of our boosters?"

According to the complaint, Grossi maintains post office boxes in the names of various charities, and collects the mail at those boxes. He maintains two post office boxes in Pompton Lakes, in the name of "American Breast Cancer Federation" and "Donor Response Center," and two in Lincoln Park in the name of the "American Federation of Police Officers" and "Children's Cancer Assistance Network."

The Complaint notes that American Breast Cancer Federation is owned by an Ohio resident, who has a contract with Grossi and PJG – but the contract limits PJG's solicitation to the State of Nevada. Nevertheless, Grossi and PJG have solicited funds in New Jersey. The phones used by telemarketers were programmed each day to call potential donors in different states, including New Jersey. A substantial number of pledge cards filled out by telemarketers, and maintained by PJG, include the names and addresses of New Jersey residents who agreed to make donations.

The State's lawsuit seeks full restitution to any consumers who made donations in response to Grossi's and PJG's solicitations, as well as civil monetary penalties. The lawsuit also asks the Court to freeze Grossi's and PJG's assets, and authorize the Division to seize and impound all documents, files, records, computers, and other items relating to PJG's business affairs.

The State Division of Consumer Affairs encourages New Jersey consumers to "Investigate Before You Donate" and learn about charities before making a donation. For example:

• Find out whether the charity is registered in New Jersey, or is exempt from having to register. (Certain religious and educational organizations, and charities whose annual income includes less than $10,000 in public contributions and fundraising, are exempt from having to register with the State).
• Find out how much the charity spent during recent fiscal years on program costs, management costs, and fundraising.
• Learn about the charity's stated mission.
• Consumers may obtain information about a charity in several ways. They can ask the charity itself (reputable charities encourage you to do so); visit the charity's website; visit the New Jersey Division of Consumer Affairs' Charities Registration page; or call the Division's Charities Hotline at 973-504-6215 during regular business hours.

Consumers who suspect a charity or business has violated New Jersey's consumer protection laws can file a complaint with the State Division of Consumer Affairs by visiting its website or by calling 800-242-5846 (toll free within New Jersey) or 973-504-6200.

Deputy Attorney General Anna Lascurain is representing the State in this matter. Chief Investigator Lawrence J. Biondo and Investigator Raquel L. Williams, of the Division of Consumer Affairs' Office of Consumer Protection, Charities Enforcement Unit, conducted the investigation.

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