Florida charity earns 10-year ban on Iowa calls

A Polk County telemarketer has ceased operating and the Florida charity that hired it to raise funds in Iowa has been banned from calling Iowans for at least 10 years, Attorney General Tom Miller announced Wednesday.

Miller accused Defeat Diabetes Foundation Inc., of approving misleading telemarketing scripts used by Lino's Inc., a professional fundraiser based in West Des Moines. Lino's shut down last fall after the Attorney General's Office executed a search warrant, Miller said in a news release.

District Judge Richard G. Blane ordered Defeat Diabetes Foundation Inc. to pay $10,000 to cover the costs of the investigation and $2,500 to support administration of Iowa's Consumer Fraud Act.

The charity's contract with Lino's provided for the telemarketer to keep 80 cents of each dollar raised.

Miller said the callers disproportionately targeted elderly residents in calls made between September 2007 and November 2010. At least 15 calls were recorded by employees of the Attorney General's Office. Transcripts of several calls were included as evidence in the lawsuit Miller filed Wednesday.

Callers identifying themselves as Johnny, Gary, Chris, Eric, Charles, Bill, Tim, Chuck and Jim falsely claimed they were volunteers for the charity, the charity was based in Iowa, donations would stay in Iowa, calls were part of an annual drive and most of the money raised would be used to fight the causes of diabetes.

“After arranging for the telemarketer to call for contributions in the charity's name, the foundation made little or no effort to ensure that money was being solicited fairly and honestly,” Miller said in a news release. “In fact, the foundation even gave its approval to misleading telemarketing scripts.”

Defeat Diabetes Foundation Inc., is based in Madiera Beach, Fla. Its president, Andrew P. Mandell, and its treasurer, Jerald Y. Mandell, signed a consent judgment last week agreeing to the operational ban and financial penalties. The Mandells denied any wrongdoing.

“We believe that a charity can't look the other way when it knows or should know it is benefiting financially from misleading fundraising conducted in its name,” Miller said.