Allegedly Deceptive Newark "Youth Club" Charities Must Cease All Operations, Under Settlement with New Jersey Division of Consumer Affairs
NEWARK – New Jersey Youth Club, Inc. (NJYC) and a related organization, "New Jersey Youth Club of America A NJ Nonprofit Corporation" (NJYC of America), will cease operations, stop soliciting charitable contributions, and turn over their recently collected contributions to the New Jersey Division of Consumer Affairs, pursuant to a Final Consent Judgment.
"These organizations callously took advantage of the generosity of New Jerseyans by allegedly posing as charities and claiming to serve at-risk youths," said Acting Attorney General John J. Hoffman. "The reality, we allege, is that they were serving themselves by applying most of the donations they collected to a for-profit business. We have shut down this charade."
The Consent Judgment resolves the State's First Amended Complaint, which alleged that NJYC and NJYC of America violated New Jersey law by soliciting charitable contributions – purportedly for underprivileged youth – without being registered as charitable organizations, and without applying the vast majority of the funds to their stated charitable purpose.
The organizations represented on the NJYC website, and through youth members who conducted door-to-door solicitations throughout the State on their behalf, that contributions from the public would be applied to mentoring programs and positive recreational activities for at-risk youths. Instead, the Division alleged that most of the donated funds were transferred to Big Apple Confectionary, Inc., a New York-based for-profit business.
"New Jerseyans believe in helping those in need," Division of Consumer Affairs Acting Director Steve Lee said. "However, before making a donation, be sure to investigate whether a charity is legitimate and registered with the Division of Consumer Affairs, and isn't yet another scam preying on your good intentions and generosity."
Acting Director Lee noted that today's announcement follows the Division's
April 29, 2015 alert that New Jerseyans should "Investigate Before You Donate" and avoid charity scams when seeking to donate for victims of the devastating earthquake that struck Nepal.
NJYC and NJYC of America operated interchangeably, according to the State's Complaint. They solicited contributions by sending youth members door-to-door in various neighborhoods, where they sold cookies or other merchandise made by Big Apple Confectionary. Through their solicitation materials and the NJYC website, the organizations represented that these sales constituted charitable contributions. Of the approximately $191,171.38 donated in 2012 and 2013, however, the Division noted that the vast majority appeared to have been transferred to Big Apple Confectionary's bank account.
Under the Consent Judgment announced today, NJYC and NJYC of America agreed to, among other things, dissolve their operations, stop dispatching youth members to conduct door-to-door solicitations in New Jersey, and turn over to the Division all available contributions collected on the organizations' behalf – including $1,111.85 in check contributions. The Division will return these check contributions to the consumers.
The Consent Judgment also includes a settlement payment of $52,620.31 to reimburse the State's investigative and legal costs. However, given the defendants' representations as to their financial status and inability to pay, this amount will be suspended and vacated after two years so long as the defendants comply with the settlement terms.
Deputy Attorney General Natalie Serock, of the Consumer Fraud Prosecution Section within the Division of Law, represented the State in this action.
Division of Consumer Affairs Investigator Brian Morgenstern conducted this investigation.
The Nutley Police Department provided assistance to the Division during its investigation. The Division also received information from the police departments of Bloomfield, Bogota, Caldwell, Closter, Franklin Lakes, Freehold, Hackensack, Keansburg, Kenilworth, Lyndhurst, Maywood, Middletown, Morris Township, Oakland, Oradell, Point Pleasant, Ramsey, River Edge, Springfield, Teaneck, Toms River, Wall, West Caldwell, Westfield, and Wyckoff.
Advice for Consumers
The Division of Consumer Affairs encourages New Jersey consumers to learn as much as possible about any charity before deciding to make a donation. Consumers should:
- 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), or visit the charity's website.
Consumers can also obtain this information from the New Jersey Division of Consumer Affairs. Visit the Division's
Charities Registration page
; call the Division's Charities Hotline at 973-504-6215 during regular business hours; or use the Division's free "New Jersey Charity Search
" smartphone app.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an
online complaint form with the New Jersey Division of Consumer Affairs or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.