Fund-Raising Firm Charged in Fraud Case : Courts: Judge bars Burbank company from soliciting charity donations until a July 20 hearing on the state charges.

Alleging “an enormous fraud,” state officials have filed charges against a charitable fund-raising business, accusing it of illegally soliciting donations for charities that do not exist or which never received the money.

A civil complaint filed in Los Angeles Superior Court alleges that Valley Fundraisers and its president, Thomas Galambos, defrauded the public in a telemarketing operation that has reported raising $2.6 million over the past four years.

In declarations filed with the complaint, Deputy Atty. Gen. James M. Cordi alleged that the Burbank-based firm failed to report donations it received fraudulently.

Cordi said Galambos has declined to turn over his financial records, invoking his Fifth Amendment right against self-incrimination.

At Cordi’s request, a judge on Wednesday froze the firm’s bank accounts and barred it from soliciting charity donations until a July 20 hearing on the state’s charges.

In an unusual procedure, Los Angeles Superior Court Judge Diane Wayne issued the temporary restraining order without requiring notification of the defendants.

In asking for the order, Cordi argued Galambos may try to remove funds from his accounts.

The state inquiry followed a Times investigation which disclosed that Valley Fundraisers cashed checks for charities that don’t exist and real charities that it did not represent.

The firm, one of 121 commercial fund-raising firms in California, is licensed by the Attorney General’s Registry of Charitable Trusts to solicit donations for three IRS-registered charities.

The Times found checks made out to more than 30 different names had been deposited into Valley Fundraisers’ bank accounts.

Galambos, in an interview, acknowledged that mistakes had been made, but said he corrected every one that came to his attention by refunding the donor’s money.

Exhibits filed by the attorney general on Wednesday included checks made out by four alleged victims to 31 different names. Cordi said that 21 of those are not registered with the California attorney general as charitable organizations.

Further, he said, the firm failed to report contributions on behalf of any organizations other than those it was licensed to represent.

“The court may. . .infer that such donations were not given to any charitable organization,” the statement said. “If these solicitations prove to be typical of those conducted generally by Valley Fundraisers, it will have perpetrated an enormous pattern of fraud, indeed.”

One of the alleged victims, Frederick J. Schroeder, was quoted in Cordi’s statement as saying the telephone solicitor told him that she was an unpaid volunteer calling on behalf of her sister who was a nurse at Childrens Cancer Foundation.

The civil complaint seeks fines under seven sections of the Government Code and Business and Professions Code. They include failure to report charitable contributions to the state, false and misleading advertising, unfair competition, violating a fiduciary trust to the public and converting charitable funds to private use.

Cordi is seeking fines of $2,500 for each violation. He said each fraudulent check represents a separate violation.

In earlier actions prompted by The Times’ article, the Los Angeles Social Service Department last month stripped Valley Fundraisers of its license to conduct charitable solicitations within the city.

Both the state and the Los Angeles city attorney are continuing criminal investigations in the case.