‘Homeless’ Scam Enriches Borderline Charities

“Won’t you please help the homeless?”

The request, repeated thousands of times a day at shopping centers throughout the Southland, sounds innocent enough.

And the public’s concern over the plight of the homeless is so great that as much as $200 a day can drop into a beggar’s bucket at the right location.

But these shopping center solicitors--who are often street people dressed in cleric’s collars--are typically helping a network of maverick ministers and themselves more than any mission for the homeless they claim to represent, according to city officials.

Mail-order ministers throughout Los Angeles County are running these profitable but apparently illegal charity operations that aggressively seek donations at area supermarkets, airports and other public places in the name of helping the hungry and homeless. The money collected, former solicitors say, is just split by the solicitors and the organizers.

City investigators estimate that at least 12 organized bands are working the Los Angeles area. Some of these organizations had as many as 30 canvassers working for them during the recent holiday season.

The solicitors are typically homeless street people, recruited with the promise of a warm place to sleep. But they must agree to hit the streets and beg for donations in return for continued housing--and a cut of the take.

Established Charities Affected

The growth of these operations is having an impact on established homeless charities and on the shopping habits of Southlanders who are fed up with the constant soliciting.

The city’s Social Service Department, which licenses charities in Los Angeles, hopes to begin prosecuting the worst of the offenders within the next several months and use those cases to scare the rest out of town, said George Delianedis, assistant general manager of the department.

But thus far enforcement of charitable registration laws has been difficult because of broad Supreme Court rulings that protect a solicitors’ right to work in public access areas and other rulings that protect religious organizations from having to register as charities.

Prosecution is also difficult because of the mobile nature of these bands, which can easily move their activities from one end of the county to the other.

With all this in their favor, the number and size of these organizations is growing.

Their numbers had been slowly building for the past several years but exploded during the past six months, said Bonnie Lewis, a spokeswoman for the Safeway Stores Inc. chain.

“We are inundated by individuals and organizations that want to use the front of our stores to solicit,” said Jim McLaughlin, Los Angeles regional vice president for operations at Vons.

“It’s irritating to customers,” said McLaughlin. Some solicitors have begun meeting shoppers at their cars and following them to the store as they arrive and following them to their cars as they leave.

The practice is becoming costly to the supermarkets, said McLaughlin. “Many (customers) feel intimidated. And if they see (solicitors) out front, they will just continue on to another supermarket.”

And established charities say they too are paying a price.

“When people get burned, it hurts legitimate missions,” said John Dickson, director of development at the Union Rescue Mission, one of the oldest Skid Row missions in Los Angeles. “People become leery. They say to themselves, ‘I don’t know who to trust.’ ”

But for the time being, the business of raising money under the banner of fighting hunger and homelessness is booming.

“It’s minimum work for maximum return,” said Delianedis. “These guys came off the street and they’re not dummies. They saw a way to really make a buck.”

Scope Estimated

McLaughlin estimated that these organizations are regularly working at about half of Vons’ 180 Southern California stores. An official at Ralphs Grocery Co. said that on any given day solicitors are working at about 50 of the company’s 129 Southland locations.

Some locations, such as the Safeway at Melrose and Vine or the Ralphs at 3rd and La Brea, will sometimes have two or three solicitors from different groups all working the store at the same time, Delianedis said.

The supermarkets are virtually powerless to stop the solicitations.

A 1980 U.S. Supreme Court ruling, in the case of Prune Yard Vs. Robbins, said that the areas around the entrances of such facilities are “public access” ways and solicitors, petitioners and others exercising their First Amendment rights cannot be stopped. The ruling followed similar rulings in the 1960s and 1970s that opened up airports to similar use.

Still, officials at established area missions, such as the Union Rescue Mission and the Los Angeles Mission, say that no legitimate organizations solicit funds in this manner.

“They are all fakes,” said Dickson of the Union Rescue Mission about the groups seen at shopping centers.

Gene Boutilier, an official with the United Way, said that with the exception of the Salvation Army at Christmas time, he knows of no “legitimate” organization that solicits funds at shopping centers and the airport.

Use Direct Mail

Most of the established missions in Los Angeles solicit funds through direct mail campaigns or from foundations and umbrella organizations such as the United Way or the Greater Los Angeles Partnership for the Homeless.

The Union Rescue Mission runs a warning in its various publications that donors should “be aware of solicitors” who may be masquerading as representatives of the mission. The mission used to get about one such one complaint a week. It now receives about one a day, Dickson said.

The Rev. Mark Holsinger of the Los Angeles Mission said he found out about one phony solicitor and went to a Hollywood supermarket to confront him.

“I said, ‘You’re with the Los Angeles Mission, huh?’ He said ‘Yup.’ I said, ‘It’s a worthy organization?’ And he said, ‘Yes it is.’ ”

And then realizing who Holsinger was, the solicitor fled on a city bus leaving his props behind, including a bucket with the L.A. Mission’s newspaper ad taped to it. “We called the cops,” said Holsinger. But they won’t do anything.”

A Los Angeles police spokesman said bogus solicitors have often fled by the time police arrive and identification of suspects can be difficult. In addition, said Officer Joe Mariani, there is little the police can do if the solicitor has proper credentials.

Lucrative Practice

Even with these professional hazards, the act of simply standing around with a bucket, bowl or basket, piping the rehearsed patter--”Please help the homeless . . . have a nice day”--can be lucrative.

Solicitors can regularly pull in anywhere from $35 to $200 a day when working the better locations, such as the international terminals at the airport where they prey on foreign tourists, Delianedis said.

The amount collected depends not only on the location, but the day of the week. Saturday afternoons are most profitable at supermarkets--where traffic can rise by 50% over the average weekday. Holidays are best at the airport and weekend nights in Westwood, solicitors said.

Depending of the daily haul, a solicitor can keep as much as 50% of what he collects--turning over the remainder to the organizers who provide uniforms, baskets, rides to the collection sites and rooms at flop houses and cheap hotels, according to city officials and solicitors who were interviewed.

One group had an elaborate system of financial incentives for its crew.

According to one solicitor, the sliding scale worked like this: Solicitors could keep 30% of the money if they raised up to $66 a day and 40% if they raised more then $66. They got 50% of the take if they worked on Sundays, regardless of how much they brought in.

Additional Bonus

If they broke their own high mark in any given day, they earned a $5 bonus. The solicitor who brought in the most in a given week would get a $25 bonus.

And if the whole crew topped $8,000 in a week, the high man would get a $100 bonus.

But if a solicitor at just about any of the organizations brings home too little--because of bad luck, laziness or by putting too much of the take in his own pocket--he can end up back on the street.

LeRoy, a homeless cook from Minnesota who arrived in Los Angeles with his family in search of work last month, said he was recruited by the Angels of Mercy Mission Church when he checked into a Skid Row hotel.

“They said, ‘We’ll help you if you help us,’ ” said LeRoy, who asked that his last name not be used. “They paid our rent that night.”

The next morning, LeRoy and his wife were driven to Hollywood area supermarkets, given a basket and told to ask shoppers, “Help the Angel of Mercy Mission Church feed the homeless.”

During the following 10 days, LeRoy said, he raised between $700 and $800 dollars and was allowed to keep 30% to 50% of his daily take. Then when he came back with just $37.50 one day, he was told, “We don’t need you to do this anymore,” LeRoy said. “(The organizer) must have thought I didn’t turn it all over.”

Edgar Ary Head

Angel of Mercy is headed by Edgar Ary, who identified himself to city officials as minister and founder of the church, according to Delianedis. Ary has been ordered by the Department of Social Service to stop soliciting in Los Angeles city limits unless he applies for a charitable permit.

Ary, in a phone interview, said his organization has stopped all solicitations as of Feb. 9. He said he had no other comment on the nature of his church’s activities or the allegations made by former solicitors “until this whole thing gets straightened out.”

Miles Curry, who heads the Christian Rescue Center of Lynwood, said his 15-man crew of solicitors no longer works in Los Angeles City limits because of the scrutiny by Delianedis.

Curry, whose ministry is based in an American Motor Inn, said he only pays his solicitors a small living allowance. The rest, he said, is given away through donations to other charities and gifts of food to the poor and homeless.

Delianedis said the city cannot stop purely religious organizations from soliciting funds because they are exempt from having to register as charities.

And designation by the Internal Revenue Service as a religious organization is not difficult to obtain.

Universal Life Ministers

To illustrate just how easy it is, Delianedis said that he and his boss, Social Service general manager Robert Burns, are both card-carrying ministers in the Universal Life Church. “If I spent another $10, I could have been a bishop,” said Delianedis about the mail-order doctor of divinity degrees available.

But once the fund-raising appeal broadens away from the strictly religious, the city has grounds to begin regulating them.

“Once they say they are feeding the homeless; we say ‘What homeless?’. . . that’s the question they have to answer,” said Delianedis.”

If they cannot back up their claims that they feed, house or clothe the homeless, they can be prosecuted criminally and sued civilly for fraud, Delianedis said.

Some operators make a case for their activity.

Eric Wagner II, founder of Gospel Mission of America, operates one of the older such groups working in the Los Angeles area.

Gospel Mission has rented an aging, two-story house on the 100 block of South Rampart Street for about 4 1/2 years. It provides beds for 10 single men, Wagner said.

Ordained by Holy Ghost

Wagner, who said he was ordained by the Holy Ghost, said “some of the people who come in are given the opportunity to go out (soliciting) and keep a part of it. That’s one way to help some people,” he said.

“At most we have five to six people out there,” who each collect about $40 to $50 a day,” Wagner said. “That’s not much when we have to provide a place to stay and food.” The proceeds also support Wagner who lives in West Covina.

The amount the solicitors keep for themselves, Wagner said, is intended to help them get back on their feet. The average client stays about two to three months and some as long as six months, he said.

But homeless are not required to solicit funds as a condition of staying at Gospel Misson’s Rampart Street location, Wagner said.

That distinction, some charitable experts said, is what separates the legitimate charities from scams.

Boutilier said United Way has rejected some organizations for funding because they required people in their programs to panhandle.

Whether the courts will use the same criteria is not clear. Delianedis said he plans to build the strongest case he can against one group to get a clear ruling from the city attorney and the courts. Then he plans go after the rest.

But, Boutilier of the United Way said the problem won’t be solved “until people stop giving money to people in front of grocery stores.”