3 Charities Continue to Seek Donations Despite State Suit

Three Orange County charities continued to solicit money Friday, despite being sued by state authorities the day before for allegedly funneling more than 95% of their contributions into organizers’ hands.

“It was business as usual,” said Mitchell D. Gold, owner of Orange County Charitable Services, the principle fund-raiser for the charities and the main defendant in the state attorney general’s civil suit.

“People have been very receptive to our side of the story,” said Gold, who denies that the charity organizers took an unfair share of the contributions.

Gold, 35, of Irvine said he plans to file a countersuit next week, charging the state attorney general with harassment.

“I’m outraged at what they did,” Gold said. “They spent six months auditing us and the best they come up with is a civil suit. These aren’t criminal charges.”

Deputy Atty. Gen. H. Chester Horn, who is handling the case, said Friday he is attempting to shut the charities down. But, he said, he may not be able to do so until January.

“I’m going to try and get a preliminary injunction against them and freeze their accounts,” Horn said. But before he can go to court on the matter, he said he needs to “get a few depositions from some key witnesses” to bolster his case.

In the meantime, Horn said he will refer his evidence to the U.S. attorney’s office in Los Angeles and the Orange County district attorney’s office and request that a criminal investigation be launched.

“I believe there were some criminal violations,” Horn said.

According to the attorney general’s complaint, Gold and his associates set up the United Citizens Against Drugs, American Veterans Assistance Corp. and Stop the Pain as fronts for an illegal fund-raising scheme.

Out of $8.6 million in contributions collected, more than 95% of that money went to the organizers, according to the complaint.

The suit, filed Thursday in Orange County Superior Court, lists as defendants the three charities and their officers, was well as 50 firms and individuals that Gold’s company hired to solicit money.

Gold acknowledged that he makes a modest profit from his fund-raising operation, but he denied that he misled anyone about the distribution of the donations.

He said his company--Orange County Charitable Services--was separate from the three charities. Furthermore, he said the charities were explicitly told that they would get 10% of what his company collected.

Although there is no state statute that specifies what portion of charitable donations must go toward the charity, Horn said it is unlawful to misrepresent the figure.

Horn said telephone fund-raising pitches falsely claimed that more than 75% of the donations went directly to the charities.