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Enforcement Action Brought Over Fraudulent Charitable Fund Raising By Commercial Fund-raiser and Sham Badge Organization
(SAN JOSE, Calif.) – The three alleged masterminds and 10 others accused of participating in a scheme to divert charitable donations and fraudulently raise contributions using the name of sheriff's and police groups were arraigned today in Santa Clara County Superior Court.
"It's wrong to fraudulently use law enforcement names in the title of an organization to trick donors into thinking they are giving their hard-earned cash to support a community police or sheriff's organization," said Lockyer, who is working with Santa Clara County District Attorney George W. Kennedy on the criminal prosecution.
A Santa Clara County grand jury earlier returned an indictment on 49 criminal counts against George and Matthew Kellner, Armand Tiano and 10 others. The Kellners from March 1993 to April 2000 conducted fundraising campaigns on behalf of the Santa Clara County Deputy Sheriffs' Athletic League (subsequently renamed Santa Clara County Police and Sheriffs' Athletic League). The Kellners owned and operated Stuart Bradley Productions, Inc., a commercial fundraiser for charitable purposes, which had been contracted by the Santa Clara County Deputy Sheriffs' Athletic League to raise charitable donations and produce public safety manuals. Tiano incorporated and was president of the Athletic League.
The 13 people are accused of grand theft between 1992 and 2000 stemming from the diversion of more than $2 million in charitable donations from the Santa Clara County Deputy Sheriffs' Athletic League, several other nonprofit law enforcement groups, and the donors who were allegedly illegally led to believe they were giving donations to law enforcement or government-related groups. The defendants also are accused of fraudulent charitable solicitation, conspiracy to commit a crime, filing false tax returns to evade tax, and money laundering.
According to the indictment, the defendants secretly diverted more than $2 million in charitable donations to personal use and created a new business, Family Entertainment Group of California, Inc., with different officers to conceal their involvement and continue fraudulent charitable solicitations, and escape legitimate judgment claims of creditors. The three men also were accused of forming groups with law enforcement-sounding names, such as the Police Benevolent Fund & Youth Foundation and Santa Clara County Deputy Sheriffs' Sports Association, in order to deceive donors into believing they were making contributions to a legitimate law enforcement group when in fact the organizations had not applied for tax-exempt status nor did they have any actual affiliation with any official law enforcement group.