Attorney General Becerra and District Attorney Lacey: Car Donation Charity Agrees to Injunction to Stop Charity Fraud
SACRAMENTO -- A Los Angeles-based car donation charity accused of soliciting vehicle donations using false and misleading advertising entered a stipulated final judgment ordering its dissolution and other provisions, California Attorney General Xavier Becerra and Los Angeles District Attorney Jackie Lacey announced.
In December 2015, the California Attorney General and Los Angeles District Attorney filed a lawsuit against the People’s Choice Charities. At the time of the filing, the lawsuit alleged the organization promised 100 percent of the proceeds from the sale of cars would be given to charities selected by donors. However, an estimated 97 percent of funds were purportedly used toward administrative costs, including advertising, towing and car repairs.
“Any time charities lie to consumers, they breach the public's trust,” said Attorney General Becerra. “I won’t stand for that. As the chief law enforcement officer of California, I will vigorously investigate and prosecute any charity that deceives and exploits the good will of generous Americans.”
“This settlement should serve as a warning to any other organization that takes advantage of the kindness of consumers,” said District Attorney Lacey. “Donations generated through deceptive advertising take valuable resources away from legitimate charities.”
The stipulated final judgment places a permanent injunction on Gary Stone, the nonprofit’s president, barring him from serving as a director, officer, trustee or employee of any California charitable organization. Moreover, Stone is permanently enjoined from doing contract work with charities, holding any management or supervisory position, or engaging in fundraising activities. People’s Choice Charities will also be dissolved.
The settlement provides for a monetary judgment of $900,000, $30,000 of which will be paid to the California Community Foundation for the benefit of children. The payment of the remaining judgment is stayed but may be enforced if Stone violates the permanent injunction against him.
The case was prosecuted by Deputy District Attorney Duke Chau of the Los Angeles District Attorney’s Consumer Protection Division and California Department of Justice’s Deputy Attorney General Sandra I. Barrientos.
A copy of the final judgment is attached to the electronic version of this release at oag.ca.gov/news.