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Settlement Reached with Matawan-Based Charity Accused of Abusing Tax-Exempt Status

The defendants allegedly claimed the Tri County Charity Center was raising money for cancer research but instead they were using their tax-exempt status to buy and export luxury vehicles, Office of Attorney General says.

A settlement agreement was reached with three defendants accused of fraudulently using a Matawan-based charity's tax exempt status to purchase luxury cars without paying sales tax, according to Attorney General Jeffrey Chiesa and the New Jersey Division of Consumer Affairs.

"The defendants allegedly created an elaborate ruse, abusing the 501(c)(3) status of a purported charity in order to buy and export millions of dollars' worth of luxury vehicles," Attorney General Chiesa said in a press release. 

Tri County Charity Center allegedly purchased a total of 71 luxury and other motor vehicles from 2009 through 2011, a total expenditure of more than $2.3 million. The organization then allegedly exported many of the vehicles to destinations including Canada, China, Finland, Georgia, Germany, Lithuania, Russia, South Korea, and Sweden.

As per the settlement, New Jersey this week received $25,000 in certified checks from the defendants, toward a total required payment of $65,000, according to the Office of the Attorney General. The defendants have also agreed to pay $18,000 to the NYU Langone Medical Center, a concession the State demanded due to the charity’s claims that it would “supply needed funds to families or individuals battling cancer.”

“What is particularly galling is that, as alleged in our lawsuit, the defendants claimed to be raising money for cancer patients. Our settlement agreement fulfills that promise by requiring donations for a medical treatment and research center," Attorney General Chiesa said in a press release.

The State’s civil complaint was filed in Monmouth County by the Division of Law on behalf of the Division of Consumer Affairs, according to the Office of the Attorney General. The State alleged that Patrick J. Caffrey, of Keansburg, was the president of Matawan-based Tri County Charity Center, which allegedly conspired with Carl F. Monto and his wife Denise Monto, of Beachwood, and with I Buy Cars For You, LLC, to purchase cars in the name of the charity.

Using false identities and fraudulent driver’s licenses, Carl Monto allegedly purchased dozens of vehicles on behalf of Tri County, misusing the charity’s 501(c)(3) status to evade paying sales tax, with Caffrey’s knowledge and approval, according to the Office of the Attorney General. In exchange, Caffrey donated $100 per vehicle to Tri County.

Additionally, the State alleged that the Montos operated I Buy Cars For You out of their home as an unlicensed motor vehicle dealership. The State’s lawsuit charged Caffrey, the Montos, Tri County, and I Buy Cars For You with violations of New Jersey’s Consumer Fraud Act, Charities Registration and Investigation Act, and Charities Regulations in Oct. 2011, according to the Office of the Attorney General.

“Government provides legitimate charities with tax-exempt status as a way to help them perform the good works that are the purpose for the charity’s existence, not as a loophole for those who wish to help themselves to a profit at the government’s expense,” Eric Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said in a press release.

Caffrey paid the State $10,000 under the terms of the settlement, and has agreed to make a $3,000 donation to NYU Langone Medical Center, according to the Office of the Attorney General. He agreed to provide proof that Tri County Charity Center has been fully dissolved as a charitable organization and also agreed that he shall never again serve in any leadership position in a charity operating or soliciting in New Jersey.

Denise Monto paid $5,000 under the terms of the agreement, according to the Office of the Attorney General. An additional $5,000 penalty has been suspended, but will be assessed if she fails to comply with the agreement or engages in any deceptive practices or violations of law during the next year.

Carl Monto paid $2,500 to the State via a certified check, and will pay a total of $40,000 in installments, according to the Office of the Attorney General. An additional $60,000 penalty has been suspended. A total of $15,000 from his payment to the State will be given as a donation to the NYU Langone Medical Center.

In addition to the above payments, the defendants paid $7,500 to the State via a certified check from the assets of I Buy Cars For You, prior to dissolving the company, according to the Office of the Attorney General.

Denise and Carl Monto also agreed to provide proof that I Buy Cars For You has been dissolved and its website shut down; never to purchase a vehicle using the tax exemption certificate of any charitable organization; never to act as motor vehicle dealers without being granted the appropriate license from the State Motor Vehicle Commission; and never to serve in a leadership position in a charity operating or soliciting in New Jersey, according to the Office of the Attorney General. They also agreed that, in the event of personal bankruptcy, they will not object to the State’s petition to have any pending and suspended penalties deemed non-dischargeable.

The Division of Consumer Affairs' Office of Consumer Protection conducted the Tri County investigation. Deputy Attorney General Alina Wells of the Consumer Fraud Prosecution Section within the Division of Law represented the State in this action. Attorney General Chiesa thanked the New Jersey Motor Vehicle Commission for its role in alerting the Division to Tri County's alleged activities, and for its important assistance in the investigation, according to a press release issued by the Office of the Attorney General.

As part of its ongoing Investigate Before You Donate campaign, the New Jersey Division of Consumer Affairs encourages New Jersey consumers to learn as much as possible about any charity before making a donation. The Office of Attorney General encourages consumers to learn whether the charity is registered to solicit donations in New Jersey, or is exempt from the registration requirement, and should find out how the charity uses the money given by donors.

Consumers can also obtain this information from the New Jersey Division of Consumer Affairs. Visit the Division's Charities Registration page; call the Division's Charities Hotline at 973-504-6215 during regular business hours; or use the Division's free "New Jersey Charity Search" smartphone app.

Consumers who believe they have been cheated or scammed by a business or charity, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

bud September 18, 2012 at 04:35 PM
This heinous crime called for jail time. Certainly, larger fines. An example needs to be made of them. 3 jerks.

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