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Ohio Attorney General Charitable Enforcement Actions

2/27/2020
I Have A Dream Rescue Organization – A former volunteer alleged that Misti Martin-Fuller, the founder, President and principle operator of I Have A Dream Rescue Organization, spent the organization’s money on various non-charitable purchases and misused funds solicited for dogs’ surgeries and medical needs. In August 2019, Martin-Fuller and I Have A Dream Rescue Organization entered into separate Assurances of Discontinuance. Martin-Fuller was required to be removed from all of the organization’s financial accounts—including credit cards, debit cards, and bank accounts—and prohibited in the future from having any involvement or responsibility concerning charitable trust money of any other charitable organization in Ohio. Martin-Fuller was not required to resign from her position with the organization. Separately, I Have A Dream Rescue Organization must require its board members to attend board governance training and maintain a three-person membership.
 
PayPal Charitable Giving Fund – PayPal Charitable Giving Fund, Inc. (PPGF) is the charitable arm of PayPal, Inc. PPGF is a 501(c)3 nonprofit corporation that allows donors to contribute funds electronically to PPGF and select a charity that will ultimately receive the benefit of their contribution. Donors’ contributions are aggregated and distributed to the donors’ chosen charities. PPGF does not collect fees from donors or charities for this service; however, a charity receives contributions more quickly if the charity maintains a PayPal account, a fact that had not been adequately disclosed to donors. In some instances, PPGF redirected donors’ contributions from the charity selected by the donor to other organizations with similar purposes without informing donors. Charities regulators nationwide joined the effort to investigate PPGF’s fundraising activities, including its disclosures, vetting practices, and treatment of charitable contributions. To address the states’ concerns, PPGF agreed in September 2019 to adopt reforms to its disclosures to ensure that donors know that they are contributing to PPGF, the timeframe in which a selected charity may receive funds from PPGF, the implication of being an enrolled rather than an unenrolled charity on the PPGF platform. PPGF also agreed to notify donors when it redirects a donor’s charitable contribution to an organization other than the one selected by the donor. PPGF will provide regulators with future campaign data to ensure the organization is complying with its obligations under the agreement. Finally, PPGF agreed to make a payment of $200,000 to the National Association of Attorneys General for deposit into the NAAG Charities Enforcement and Training Fund. This Fund has been established to defray costs associated with the investigation and the litigation of cases brought by state charities regulators and to provide training and education to those regulators.  
 
Orthodox Catholic Church of North and South America – The Orthodox Catholic Church of North and South America (“Orthodox Catholic”) is an Ohio nonprofit corporation that was formed in 1976 and based in Barberton Ohio. The Church was initially formed and operated under the Eastern Rite Orthodox and Western Rite Orthodox traditions. In 2018, the office received a complaint from an individual alleging improper conduct by Orthodox Catholic’s board members.  Based on its investigation, the office determined that Orthodox Catholic’s last clergy leader died in 2005, that the organization had operated in violation of its constitution and by-laws since that time, that the organization was no longer regularly holding religious services, and that the organization was incapable of advancing its religious purpose. In October 2019, the office finalized an Assurance of Discontinuance with Orthodox Catholic. Under the terms of the AOD, Orthodox Catholic agreed to dissolve as an Ohio nonprofit corporation and take all steps necessary to wind-down the organization’s financial affairs within twelve months. As part of the wind-down process, Orthodox Catholic is to make best efforts to distribute all net proceeds, assets, or religious artifacts to an active church of the same or similar denomination in Ohio. Separately, the organization agreed to liquidate and pay to the office funds contained in an investment account, with those funds to be redistributed by the attorney general in support of other charitable purposes in Ohio.
 
Friends of Dater Montessori School – Friends of Dater Montessori School (FODM) is an unincorporated nonprofit association that was organized to “support and promote the welfare of the children and staff of Dater Montessori School, a Cincinnati Public School.” The attorney general’s office received a complaint alleging that FODM’s funds were inappropriately used by FODM’s former treasurer, Beth Clevenger. As a result of the complaint, the office opened an investigation into FODM. In November 2019, the office finalized an Assurance of Discontinuance (“AOD”) with Ms. Clevenger. Ms. Clevenger served as FODM’s treasurer from 2015 to 2018 and had access to FODM’s financial assets, including the organization’s bank accounts. As part of the AOD, Ms. Clevenger agreed to be permanently enjoined from: soliciting in Ohio for charitable purposes, serving on the board of directors of any non-profit organization in Ohio, incorporating an Ohio nonprofit organization, and directly overseeing or managing charitable assets. The AOD requires Ms. Clevenger to pay a civil fine in the amount of $5,000.
 
Hoopology – Ron and Arnika Edwards organized a golf tournament at NCR Country Club to raise charitable funds to benefit the Hoopology charitable organization. Hoopology is a charitable organization in Ohio that was designed to host an academic and athletic camp for underprivileged children. The event was well-attended and raised approximately $143,000. Ron and Arnika Edwards maintained possession and control of the funds, and allegedly failed to use the funds as intended, including but not limited to paying vendors who provided goods and services for the golf tournament and failing to pay proceeds from the golf event to Hoopology. Eventually NCR Country Club filed a lawsuit against Ron and Arnika Edwards, as NCR alleged they were never paid for accommodating the golf event. The attorney general’s office joined that lawsuit.  As part of a mediated settlement in the case, Ron and Arnika Edwards entered into an Assurance of Discontinuance in December 2019 and agreed to pay the attorney general’s office $30,000 as restitution and to never engage in a nonprofit activity or with a nonprofit entity.
 
Great Lakes Summer Collegiate Baseball Foundation –The Ohio Attorney General’s Office entered into an assurance of discontinuance (AOD) in January 2020 with David Palmer, founder of the Athens-based Copperheads baseball team and the Great Lakes Summer Collegiate Baseball Foundation. Following an investigation, the attorney general’s office concluded there was reason to believe that Palmer had breached his fiduciary duties of care, to properly manage accounts, to comply with the law, and to act in the best interests of the charities. The AOD requires Palmer to pay a civil penalty of $20,000 and prohibits him from forming new nonprofits or serving as a charitable board member or accepting other charitable positions that include financial oversight or fiduciary obligations.
 
Massillon Little League and Luther Copeland – Luther E. Copeland, president of the Massillon Little League, entered into an Assurance of Discontinuance with our office in February 2020. The agreement was part of a settlement reached in litigation following the court’s judgment that Copeland breached his fiduciary obligations to account for the charitable assets of the charitable organization. In the civil complaint, the attorney general alleged Mr. Copeland breached his fiduciary duties by misappropriating funds. The trial court found, “there are no genuine issues of material fact as to whether Defendant Copeland misused and/or misappropriated, or failed to properly account for” all of the charity’s funds. Copeland will pay $2,000, will cooperate in any accounting the court might order in the dissolution of Massillon Little League, and is prohibited from serving in a fiduciary capacity for any charitable organization.