New York state Attorney General Eric Schneiderman has leveied a $700,000 fine against Thrift Land USA of Yonkers after an investigation revealed the company used phony donation bins to get free inventory for its stores, WMTW reports.
According to a state investigation, Thrift Land USA paid around $100 to $200 to license the logos of two charities, I Love Our Youth and Big Brothers Big Sisters of Rockland County, which Thrift Land USA then used on over 1,300 donation bins in New York and Connecticut. The bins led people to believe their donated clothes would be used to help the needy; instead, the Attorney General's office alleges, the company made in excess of $10 million through the ruse.
"Duping members of the public into thinking that they are making a charitable donation, when in fact they are enriching a for-profit corporation, is both deceptive and illegal," Schneiderman said in a statement. "When a for-profit company masquerades as a charity, my office will hold it and its owners accountable."
Schneiderman also brought the hammer down on I Love Our Youth after finding the organization's tax exempt status had been revoked because its chairman had used charitable funds for personal expenses. Hosea James Givan II was ordered to pay $50,000 in fines and shut down the organization.
"As an organization we were negligent in not documenting every receipt, but it didn't mean that we were doing anything illegal or unethical," Givan said to WMTW. "Honestly, man, we were victims too in this situation. We didn't make any money. No one in our organization was living lavishly from this. I'm in debt. I'm fairly highly regarded in my circles, and this is embarrassing for me."
Schneiderman said that Thrift Land USA's settlement includes a $50,000 penalty and a mandated $650,000 donation to two charities, "to fulfill the charitable intent" of people who were tricked by the fake donation bins.
In 2014, the New York Times reported on the growing problem of companies illegally placing donation bins throughout the city and becoming magnets for graffiti and litter.
“They have become the bane of our existence,” Kathryn Garcia, the city’s sanitation commissioner, said at the time.
New York City law forbids bins like these being placed on public sidewalks and other areas. In response to the for-profit bins appearing, Goodwill resumed its practice of placing bins in the city. (Legally, of course.)
You can read Schneiderman's full statement here.
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