March 4, 2021
placed more than 1.3 billion deceptive fundraising calls — most illegal
robocalls — claiming to support veterans, children, firefighters
City, NV – Nevada
Attorney General Aaron D. Ford, along with the Federal Trade Commission
and 46 agencies from 38 states and the District of Columbia, has stopped a
massive telefunding operation that bombarded 67 million consumers with 1.3
billion deceptive charitable fundraising calls, mostly illegal robocalls. The
defendants collected more than $110 million using their deceptive
Associated Community Services (ACS) and a
number of related defendants have agreed to settle charges by the FTC and state
agencies that they duped generous Americans into donating to charities that
failed to provide the services they promised.
“These illegal robocalls not only posed
an annoyance to consumers, but also tricked Nevadans into giving their money
over to what they thought was a charitable organization,” said AG Ford. “My
office is committed to shutting down these types of fraudulent robocallers who
prey on our residents for good.”
charitable fundraising can be big business for scammers, especially when they
use illegal robocalls,” said Daniel
Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “The FTC and our state partners are prepared
to hold fraudsters accountable when they target generous consumers with lies.”
The complaint alleges the defendants
violated provisions of the Nevada Deceptive Trade Practices Act, the FTC Act of
1914, the Telemarketing Sales Rule (TSR), and numerous other state and federal laws.
In addition to ACS, the complaint names as defendants its sister companies
Central Processing Services and Community Services Appeal; their owners, Dick
Cole, Bill Burland, Barbara Cole, and Amy Burland; and ACS senior managers
Nikole Gilstorf, Tony Lia, John Lucidi, and Scot Stepek. In addition, the
complaint names two fundraising companies allegedly operated by Gilstorf and
Lia as spin-offs of ACS, Directele, and The Dale Corporation.
According to the complaint, the
defendants knew that the organizations for which they were fundraising spent
little or no money on the charitable causes they claimed to support—in some
cases as little as one-tenth of one percent. The defendants, with knowledge and
failing to disclose, kept as much 90 cents of every dollar they solicited from
generous donors on behalf of the charities.
The complaint alleges that the defendants
made their deceptive pitches since at least 2008 on behalf of numerous
organizations that claimed to support homeless veterans, victims of house
fires, breast cancer patients, children with autism, and other causes that
well-meaning Americans were enticed to support through the defendants’
high-pressure tactics. ACS was also the major fundraiser for the sham Cancer Fund charities that were shut
down by the FTC and states in 2015.
In many instances, the complaint alleges,
ACS, and later Directele, knowingly violated the TSR by using soundboard
technology in telemarketing calls. With that technology, an operator plays
pre-recorded messages to consumers instead of speaking with them naturally. Use
of such pre-recorded messages in calls to first-time donors violates the TSR.
Use of the technology in calls to prior donors also violates the TSR unless
call recipients are affirmatively told about their ability to opt out of all
future calls and provided a mechanism to do so.
The complaint also charges ACS with
making harassing calls, noting that ACS called more than 1.3 million phone
numbers more than 10 times in a single week and 7.8 million numbers more than
twice in an hour. More than 500 phone numbers were even called 5,000 times or
Each of the Associated Community Services
defendants will be permanently prohibited from conducting or consulting on any
fundraising activities and from conducting telemarketing of any kind to sell
goods or services. In addition, they will be prohibited from using any existing
donor lists and from further violations of state charitable giving laws, as
well as from making any misrepresentation about a product or service.
The Directele and ACS senior manager
defendants will be permanently prohibited from any fundraising work or
consulting on behalf of any charitable organization or any nonprofit
organization that claims to work on behalf of causes similar to those outlined
in the complaint. They will also be prohibited from using robocalls for any form
of telemarketing, using abusive calling practices, or making any
misrepresentation about a product or service. In addition, the defendants will
be required to clearly and conspicuously disclose when a donation they are
requesting is not tax deductible. The two corporate defendants—Directele Inc.
and The Dale Corporation—will be required to cease operations and dissolve.
Several of the defendants will be subject to monetary
judgments that are fully or partially suspended due to inability to pay. The
surrendered funds will be paid to an escrow fund held by the State of Florida
and, following a motion by the participating states and approval by the court,
be contributed to one or more legitimate charities that support causes similar
to those for which the defendants solicited.
Other state agencies joining in the case with Nevada and
the FTC include the attorneys general of Alabama, California, Colorado,
Connecticut, Delaware, the District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana,
Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina,
Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia,
Washington, West Virginia, Wisconsin, and Wyoming; the secretaries of state of
Colorado, Georgia, Maryland, North Carolina, and Tennessee; and the Florida
Department of Agriculture and Consumer Services and the Utah Division of
The complaint and stipulations re orderswere filedin the U.S. District
Court for the Eastern District of Michigan.
FTC has more information for consumers about charitable giving, including tips
on how to spot sham charities at https://ftc.gov/charity. In addition,
consumers are encouraged to let the FTC know about charity fraud, robocalls,
and other consumer issues at https://reportfraud.ftc.gov. You may also file
a complaint with the Office of the Nevada Attorney General at ag.nv.gov.
complaint is attached.