Group Agrees to Stop Seeking Donated Funds

Organizers of a Glendale fund-raising group agreed Monday to permanently cease solicitations and to turn over its remaining assets to the American Veterans Committee, whose name it had used illegally since 1986.

A settlement approved in Los Angeles Superior Court ends state and civil action against Glendale accountant Frank E. Burford and his associates, who were accused in a civil lawsuit of using illegal fund-raising tactics.

Judge F. Ray Bennett also approved an agreement by the Glendale group to pay $7,000 to the American Veterans Committee, a New York corporation founded in 1943 that raises funds nationally. The settlement halts a trial that was to have begun Monday.

A lawsuit filed by the veterans committee in August, 1990, alleged that the Glendale group illegally used the organization’s name to operate a telephone “boiler room” in Bellflower to raise hundreds of thousands of dollars. It argued that the money raised should be turned over to the national group.

In a separate lawsuit heard at the same time, state attorney general’s officials alleged that Burford improperly moved donations into his personal account and withdrew excessive expense money. Another Superior Court judge in February, 1991, ordered the group to shut down operations after state investigators found that annual financial reports had not been filed as required and that donors were falsely told that their gifts were tax deductible.

Burford two years ago was ordered to stop using the name, but an investigation by the state attorney general found that almost all of the money raised had been depleted.

Although Burford said funds were donated to various groups that aid veterans, blind children and battered women, state records of charitable donations and costs indicate that less than 5% of the funds raised in 1989, for instance, were actually given to charities. The rest was used to cover costs, records show.

The percentage given was far below the average among Los Angeles fund-raisers, but the U.S. Supreme Court has ruled that states and cities cannot mandate how much a fund-raiser must donate to charity.

The group later changed its name to Southern California Assn. of Charities, even though it is a single fund-raising organization.

The court-approved settlement bans any further solicitations by Burford and his organizers, Deputy Atty. Gen. H. Chester Horn Jr. said.

Florice Hoffman, an attorney for the veterans committee, said the group was somewhat unhappy with the settlement “because there was no restitution to the actual victims, which were the people who gave more than $1.5 million” to Burford’s organization.

Burford could be reached for comment. His attorney, Kenneth I. Gross, said, “We believe all of the parties are satisfied and that is the end of it.”