Thursday, June 30, 2011

The "Contemporaneous Written Acknowledgment" Trap Costs Taxpayers a $2 Million Charitable Contribution Deduction

In a memorandum opinion issued yesterday, Tax Court Judge David Laro ruled that taxpayers were not entitled to a charitable contribution deduction relating to the donation of a conservation easment because taxpayers failed to comply with IRC 170(f)(8) and Treasury Regulation 1.170A-13(c)(2).  The statute and regulation require "contemporaneous, written acknowledgement" among other things.  It would appear from the opinion that the disallowance of the deduction resulted from a monumental -- $2,000,000 -- tax planning blunder. 

First, it's actually questionable whether there even was a "donation" since the agreement to forego development of the land (the "conservation easement) was made as part of the settlement of litigation between the taxpayer and the county government.  Here is the short version.  Taxpayer sued County over certain warranties associated with the transfer of land.  The parties settle with County agreeing to transfer land, taxpayer agreeing not to develop the land.  According to the settlement agreement, dated August 27, 2004, the "county agreed to provide written acknowledgment, in form and substance acceptable to [Mr.] DiDonato, of a donation to the county of [Mr.]DiDonato’s development rights in the parcel.”  In other words, the parties agreed to settle litigation by calling the taxpayer/plaintiff's part of the agreement a "donation" of a conservation easement and the county agreed to provide acknowledgment suitable to the taxpayer at some later date.  The County would convey land to taxpayer, but retain development rights.  Taxpayer's agreement to forego development rights constituted the grant of a conservation easement.  That the agreement called for acknowlegement is indication that counsel was aware of the contemporaneous written acknowledgement requirement but, according to the court, simply got it wrong.  In any event, assume there was a valid contribution of a charitable conservation easement.  Ok, so taxpayers file their 2004 return in 2005, claiming a $1.8 million charitable contribution deduction and attaching the settlement and an appraisal of the granted easement.  The whole land transfer, though, was subject to a public hearing required by law (because the land involved was conservation land, basically).  The public hearing approving the deal did not occur until December 12, 2005. The court ruled that the settlement agreement could not be a contemporaneous acknowledgement because the deal was subject to a condition subsequent (the public hearing) which had not yet occurred.  Alright then.  According to the opinion, "on or about December 22, 2006, [after taxpayers filed their 2004 return claiming the deduction] the county sent to Mr. DiDonato a letter acknowledging and thanking him for his “donation” of the development rights to the Schaafsma parcel. That letter advised Mr. DiDonato that the county did not independently appraise the donated property and that it was Mr. DiDonato’s responsibility to determine the value of the donated property for “income tax deductibility” purposes." The opinion leaves us to conclude that taxpayer's counsel considered the letter acceptable.  Que the music from Jaws!  Finally, on March 19, 2007, taxpayer's executed a deed of restriction agreeing not to further development the property.   According to the Court, contemporaneous would have been either on December 12, 2005 (the date of the hearing approving the deal) or March 17, 2007 (the date the taxpayer executed the deed restriction).  The County's December 22, 2006 letter does not comply with Treasury Regulation 1.170A-13(c)(2) because it doesn't contain the magic language.  The settlement agreement was not contemporaneous because the transfer could not take place until after the public hearing, according to the court.  Ergo there was no "contemporaneous written acknowledgement" at all! Nor can there ever be one now because "contemporaneous" means on or before the date of the return for the year in which the contribution was made (either 2005 or 2007). The County's letter was on or before the 2007 date, but it did not contain the language required by the statute and regulation.   

What to do?!!!!!  Should taxpayer amend the 2007 return claiming the deduction for tax year 2007?  Its almost 2012, so a proper acknoweldgement now would hardly be contemporaneous, would it?  See, Treas. Reg. 1.170A-13(f)(3).  Boy, this seems a trap for the unwary to me. 



June 30, 2011 | Permalink | Comments (1) | TrackBack (0)

UPDATE: Lady Gaga Denies Japan Fundraising Allegations

Previously I posted that Laday Gaga and various companies with which she is affiliated had been hit with a federal RICO suit alleging improper retention of funds collected through the "Lady Gaga Japan Earthquake Relief Wristband" effort.  She, or rather her publicist, have now responded by denying all of the allegations in "[t]his misguided lawsuit" that "is without merit" according to a Washington Post article.  For additional coverage, see Rolling Stone (which also mentions other pop star charity efforts that run into trouble).

Having reviewed the complaint, I think it is a stretch but not frivolous and probably sufficiently well pleaded to avoid a motion to dismiss.  Assuming that is correct, the key question will then be what will the discovery process reveal.


June 30, 2011 in Federal – Judicial, In the News | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 29, 2011

NY Attorney General Sues Coalition Against Breast Cancer Alleging Massive Fundraising Fraud

In an absolutely explosive case harkening back to United Cancer Council, the NY Attorney General filed suit against the Coalition Against Breast Cancer, Inc. and several insiders alleging that the exempt organization is "a sham charity that has diverted nearly all of the millions of dollars raised in the name of breast cancer to its officers, directors and fundraisers. Get the full complaint here.  For media reports click LATimes, Reuters, and USA Today.  The complaint's first twelve paragraphs are set out below and, if true, the insiders have a lot more to worry about than just a state law action. 


1. CABC is a sham charity that has diverted nearly all of the millions of dollars raised in the name of breast cancer to its officers, directors and fundraisers. Falsely claiming research affiliations with hospitals such as Memorial Sloan-Kettering and using other lies and exaggerations, Defendants deceive donors into believing that their donations will help eradicate breast cancer through research, mammogram screening and other programs. In reality, CABC spends none of its funds on eradicating breast cancer, nor does CABC have any research affiliation whatsoever with Memorial Sloan-Kettering or any other hospital nor does it conduct or fund any research on breast cancer or any other cancer. Nor does CABC perform any mamograms or other breast cancer screening nor is it affiliated with any mammography screening facilities and, as its own records show, CABC spends virtually nothing on breast cancer prevention.


2. Instead, in the last five years alone-a period that has witnessed 200,000 women die from breast cancer and millions more fighting to survive it-CABC has squandered and misused virtually all of the $9.1 million it raised in the name of breast cancer. By its own records, during this period, CABC spent less than 4 percent of the donations it received on any purported charitable programs, and almost none of the donations - less than one-half of one percent - went for charitable purposes authorized under its certificate of incorporation. In 2008, a year in which CABC raised over $1.4 million from the public, it spent a mere $374 for mammograms. In the last three years, despite raising over $4 million, CABC funded mammograms for only 11 women.


3. In short, Defendants have misused and wasted millions of charitable dollars that could have been used to treat and potentially save an untold number of breast cancer victims across this state and country. 


4. Andrew Smith and Garrett Morgan, longtime friends and business associates, launched the CABC fundraising operation in 1995 to exploit the breast cancer nlovement for their personal financial benefit, at a time when both were in need of cash. Smith was emerging from personal bankruptcy and Morgan was being investigated for his role in a fraudulent meals-on-wheels charity, which was later ordered permanently shut down.


5. Smith and Morgan launched CABC despite having no connection to the breast cancer cause. From its inception, CABC has served as a cash machine for Morgan, Smith and other insiders. Defendant Snlith best summarized CABC's raison d'etre in a February 2010 email he sent to Morgan following a sharply critical press article that questioned CABC's legitimacy:


We are in a bad place. You need the money and so do I.


6. The CABC business model is straightforward: pick a sympathetic cause; lie and mislead donors about how donations will be used; provide a veneer of legitimacy by creating a website to exaggerate the organization's mission; spend a token amount on charitable programming; divert nearly all of the funds raised to the founders and other insiders; and ensure that there is no board oversight.


7. From CABC's inception, Smith has handpicked the board, appointing his family and friends, including his former wife, Lori Smith, and then later, his girlfriend, Debra Koppelman, and her friend Patricia Scott, none of whom had any experience in the breast cancer cause or non-profit management, much less the capacity to fulfill their fiduciary responsibilities as directors. As a result, CABC has operated without any financial oversight and without any controls preventing self-dealing and conflicts of interests, allowing it to run as a convenient piggy bank for CABC's directors and Morgan.


8. Were CABC a bona fide charity and were its board providing even the most basic oversight, it would have been apparent that CABC's mission was not being carried out, given that even after 15 years of operation, virtually none of the money raised in CABC's name went to legitimate charitable purposes. But CABC has no functioning board, with directors serving in nanle only. They perform no oversight, exercise no fiduciary responsibilities, and are simply content to continue the CABC fundraising operation led by Morgan, so long as they are paid their unjustified salaries and benefits.


9. Indeed, CABC's directors-Smith, Koppelman and Scott-have completely abdicated their fiduciary oversight responsibilities by ceding control over CABC's fundraising operations and strategy to Morgan and his for-profit telemarketing company, the Campaign Center. With no oversight, Campaign Center has gone unchecked and engaged in fraudulent fundraising tactics on CABC's behalf, including lying or grossly exaggerating the scope of CABC's charitable activities and mailing phony pledge invoices.


10. Smith, Koppelman and Scott have failed to exercise any diligence concerning whether the amount paid to Canlpaign Center is reasonable. Year after year, they renew the Campaign Center's contract without ever attempting to negotiate more favorable terms with the Campaign Center, or reaching out to other fundraisers not connected to Morgan to obtain a better deal for CABC. Instead, last year, CABC actually increased Campaign Center's cut from 80% to 85% even though there had been no change or inlprovement in the services provided. They even gave Campaign Center the exclusive right as "broker" to select other fundraisers for CABC.


11. Smith, Koppelman and Scott, who are all employed elsewhere, have used the charitable funds raised by Morgan to inlproperly pay themselves salaries, retirement benefits, dental, medical and other benefits-even free BlackBerry phones-despite providing no services' warranting these benefits.


12. Smith and Koppelman have also engaged in substantial insider transactions in violation of the Not-for-Profit Corporation Law, including $105,000 in loans to Smith, a $50,000 loan to Koppelman, and a risky stock sale by Smith to CABC.



June 29, 2011 in State – Executive | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 28, 2011

Massachusettes Senate Passes Law Requiring State Approval of Nonprofit Officer and Board Member Compensation

Big brother has taken the first step towards taking over the nonprofit sector in Massachusettes.  No kidding!  In a first of its kind law, Massachusettes requires public charities to obtain state approval before compensating nonprofit board members.  The events leading to this incredible result began when the Boston Globe published several articles questioning the compensation paid to nonprofit health care executives.  One such article explained:

The issue of paying nonprofit board members came to the forefront in March after the state’s largest health insurer, Blue Cross Blue Shield of Massachusetts, disclosed that it gave former chief executive Cleve L. Killingsworth an $11 million payout. The Blue Cross board members who approved the package earned annual salaries that ranged from $56,200 to $84,463. Attorney General Martha Coakley’s office said health insurers were not justified in paying directors because they do about the same amount of work as volunteer board members at other nonprofits.  “We’re concerned where board members of any charity are paid, including foundations,’’ said Brad Puffer, a Coakley spokesman.  Following a public uproar over the health insurers’ board compensation, Blue Cross and Fallon Community Health Plan suspended the payments. Harvard Pilgrim Health Care, and Tufts Health Plan — the state’s other two major insurers — said they will continue to pay directors.  Two weeks ago, the state Senate approved a budget amendment that would bar all charitable organizations — not just health insurers — from paying directors without state approval. The Senate amendment has not faced significant opposition, but lawmakers still must reconcile the Senate bill with a House version in coming weeks. It could be modified or cut from the budget.

When the Attorney General got wind of the public outcry, she began an investigation that culminated in a letter to several of the largest nonprofit health care organizations.  The letter, with very dubious authority, rejected all the justifications offered in support of nonprofit board member compensation, stating the following:

The rarity of director compensation within the non-profit industry is entirely consistent with the purpose and structure of non-profit charitable organizations. In the for-profit world, organizations operate for the exclusive benefit of their owners (shareholders) and directors are entirely justified in requiring compensation for serving those private interests.  In contrast,  nonprofit charitable organizations operate for the exclusive benefit of the public and the vast majority of directors view voluntary service as a primary means of giving back to the greater community the value of their skils and experience. Compensating directors is contrary to this spirit and diverts resources otherwise focused on achieving the charitable mission of the organization. Moreover, the authority of directors in the for-profit world to establish and set their compensation is subject to the ultimate authority of the shareholders.  Those who are entitled to the benefits of non-profit charitable organizations (the public) have no such authority.

Although our office is troubled that Harvard Pilgrm and Tufts have continued to compensate board members while health care costs continue to rise, compensation of independent directors is not merely an issue of cost. Compensation has the potential to impair board independence.s For example, the Guide notes that "individuals who have a personal financial interest in the affairs of a charitable organization may not be as likely to question the decisions of those who determine their compensation or fees or to give unbiased consideration to changes in management or program activities." P.23. Likewise, compensation of directors creates an unavoidable conflct of interest inherent in the unchecked ability to self-elect compensation with charitable funds, and is clearly contrary to this volunteer tradition that characterizes our charitable boards.  Moreoever, compensation of independent directors cannot be viewed in isolation from broader concerns about mission drift in certain sectors of our charitable community. Particularly in the health care arena, where non-profits organizations (both providers and insurers) often operate side-by-side with for-profit entities, are subject to the same market dynamics and regulatory requirements, provide similar community benefits and yet are granted far more favorable tax treatment, the traditional justification for granting charitable status is increasingly subject to scrutiny. Compensating independent directors contributes to this trend and further blurs the line between charitable and for-profit entities.

Because compensating independent directors departs from the charitable industry and judicially recognized norm and creates unavoidable conflicts of interest, public charities that undertake this practice should do so only if they have a sound and convincing rationale. 

Thereafter, the Attorney General convinced several legislators to introduce the bill passed by the Senate on June 20, 2011.  The meat of the bill states:

(b) No Massachusetts based public charity required to be registered under section 8E and to file annual reports under section 8F, shall provide compensation to any independent officer, director or trustee for service as such independent officer, director or trustee except with the approval of the Director in accordance with the provisions of this section.

Any such public charity intending to provide compensation to any independent officer, director or trustee shall file an application with the Division, on such forms and with such supporting information and documentation as the Director shall from time to time prescribe, requesting the approval of the Director to provide compensation.

The Director may adopt and promulgate guidelines, rules or regulations to carry out the provisions of this section including, but not limited to, the criteria for granting approval and the time period during which such approval shall be effective. Such criteria shall recognize that service as an independent officer, director or trustee of a public charity is recognized as a voluntary contribution of time and expertise to benefit the community served by the public charity and that any departure from the voluntary nature of such service requires a clear and convincing showing that compensation is necessary to enable the public charity to attract and retain experienced and competent individuals to serve as independent officers, directors or trustees.

If the Director approves an application for compensation, amounts paid as said compensation shall be limited to the amount the Massachusetts based public charity reasonably determines are necessary to accomplish the purposes for which compensation is paid. The Director may rescind the approval for compensation if he finds that any compensation paid under this section is in excess of that reasonably necessary to accomplish the purposes for which compensation is approved and paid.

Subsequent media reports suggests that the real purpose of this law is to altogether prohibit nonprofit board member compensation: 

Senator Mark Montigny, the New Bedford Democrat who sponsored the legislation, said people who serve on nonprofit boards should not collect paychecks. The money would be better spent supporting the organizations’ charitable missions, he said.  “I think the game is over for a lot of these folks,’’ Montigny said. “Unless there is an extraordinary case, we need to look at completely stopping paying volunteer board members.’’

So here is where the editorializing starts.  Nonprofit health care has for too long been allowed to serve as the caricature representative of the entire charitable sector.  Not only that, there have been complaints about compensation practices in the college, university and nonprofit health care industry for years. For the most part, the charitable sector has not heeded those complaints.  The Massachusettes law is a foreseeable result of that failure to heed.  The charitable sector is also referred to as the "Independent Sector" because it is deemed trustworthy enough to engage in responsible self-policing.  The Massachusettes law challenges, in none too subtle ways, that trustworthiness.  Indeed, it sounds a serious warning that should be heeded.  If the charitable sector does not clean up its own act, others will do so for it, typically in ways that are as destructive as the Massachusettes law. 


June 28, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, June 27, 2011

Corporate Sponsorship in the NonProfit World: Everybody has a Price!

The blogosphere is abuzz about GLAAD and other tax exempt organizations' sudden, and apparently well coordinated support of a proposed merger between AT&T and T-Mobile.  Anybody with half a brain knows that corporate sponsorships, as defined in IRC 513(i), constitute gross legal fictions.  The fiction is that the tax exempt organization that is being "sponsored" is not engaged in the sale of advertising and thus subject to the unrelated business income tax.  IRC 513(i) perpetuates that fiction so that college football and basketball can make billions of tax free dollars while at the same time absolutely vilifying poor but talented athletes for daring to sell their memorabilia for pizza and beer money.  But I digress.  According to the Boston Globe and other media outlets, GLAAD and several other "liberal" exempt organizations received substantial donations from AT&T, ($50,000 in the case of GLAAD), and sometime thereafter GLAAD sent this letter in support of AT&T's proposed merger with T-Mobile.  Over the weekend, and after the blogosphere began asking what the heck the proposed merger has to do with gay rights, Jarrett Barrios and several GLAAD board members resigned, according to this report

Wireless phone service has about as much to do with gay rights as zebras have to do with waterskiing. So gay bloggers were justified in hounding Jarrett Barrios, who until this past weekend was president of the Gay & Lesbian Alliance Against Defamation, after he wrote the federal government on behalf of AT&T, a corporation that had donated $50,000 to Barrios’s watchdog group.

 It should be noted that at least one AT&T executive sits on GLAAD's board of directors.  Corporations, of course, are theoretically incapable of altruism.  The law allows the charitable contribution to corporations but everyone knows that corporations make contributions to polish their image all for the purpose of selling goods or services.  Still, explicit quid pro quo is prohibited, except in the case of college athletics which is different right?  The quid pro quo in this instance -- what might also be referred to as prohibited private benefit which should (but probably doesn't) jeopardize the organizations' tax exemptions -- resulted in eight other GLAAD board members resigning.   For more on the story, see this report in  One of the board members is reported to have severely condemned GLAAD's apparent trading on its name:

But when former GLAAD board co-chairwoman Laurie Perper appeared on Michelangelo Signorile’s Sirius XM radio show earlier this month, she alleged that Barrios had traded favors with Coronado for his support and then backed the AT&T/T-Mobile deal in return.  GLAAD immediately condemned Perper’s comments during the show, calling them “factually inaccurate, uninformed and misleading.”  “We are saddened and shocked that Laurie Perper would distort the truth to this degree

GLAAD shot back with this press release denying any impropriety and suggesting that its interest in media matters arises from its efforts to eradicate gay slurs from public discourse and tying those efforts to its support of the AT&T/T-Mobile merger: 

Finally, GLAAD is accomplishing extraordinary results in its programmatic work. AT&T and Time Warner Cable pulled advertising after GLAAD and the National Hispanic Media Coalition (NHMC) asked advertisers to drop advertisements from Jose Luis Sin Censura, a Spanish-language talk show where the audience frequently chants the word f*ggot and violently assaults LGBT guests. This campaign is continuing. We are now working with the NBA, Major League Baseball and World Wrestling Entertainment to combat homophobia in sports and training announcers, coaches and players to be LGBT inclusive.

Much of GLAAD’s work does not make headlines such as our People of Color Media Institute where 30 LGBT people of color and allies were trained on ways to speak to Americans about LGBT issues and GLAAD’s hard-working and dedicated staff are now getting them national attention. And GLAAD is working with local organizations to amplify powerful stories of LGBT couples and allies in New York, Minnesota, Oregon and many states where our equality is being debated – these are the voices that Americans need to hear from and who are at the heart of GLAAD’s mission.

All of this comes under the dedicated and dynamic leadership of GLAAD President Jarrett Barrios, whom we wholeheartedly support. We are saddened and shocked that Laurie Perper would distort the truth to this degree. She is entitled to her opinion, but she cannot change the facts, including the fact that GLAAD is much healthier today than while she was at the helm.

There is not as much on the internet about other groups who seemed to suddenly pay interest to such mundane matters as corporate mergers but those groups also sent in letters of support after getting hefty donations from AT&T.  Here is the NAACP's letter and statment, the League of United Latin American Citizens (LULAC)'s statment, the Japanese Americans Citizens (JACL)'s letter and even the Sierra Club's letter!  A regular rainbow coalition, I'd say.

Now, I am willing to suspend normal brain functioning just like the next American (especially when it comes to political campaigns, Americans are very good at it then), but this whole mess is a stain on some otherwise reputable tax exempt organizations and ought to be condemned everywhere. I rather doubt much can be done about it though from a legal standpoint.  The problem is, the sale of the organization's support is not quite unrelated business income (since it presumably lacks the regularity necessary to impose UBIT), nor it is it private benefit enough for anybody to do anything about it, since the classic definition of private benefit compares the degree to which the organization has sold its soul with the degree to which it has faithfully pursued its charitable goal.  If the oranization is only an occasional sell-out, its ok, according to the private benefit doctrine.  But make no mistake, these organizations have sold thier proverbial souls and in doing so can no longer claim the indignant high ground against the slimy capitalists of the world!  Shame on all of you!


June 27, 2011 in Current Affairs | Permalink | Comments (0) | TrackBack (0)

Governor's Residence Foundation: There Oughta Be a Law!

I thought it was news but there are at least five tax exempt organizations designed to pay the housing costs of state chief executives, according to Guidestar.  The Los Angeles Times reports in its June 24, 2011 issue that the Governor's Residence Foundation of California exists and is tax exempt for the sole purpose of paying the California governor's rent.  At first, the story seems sensational -- that donors make tax deductible contributions to benefit a specific individual but I suppose it can be explained that the donor's are not exactly doing that.  Instead, they are making donations to assist the state in providing a residence for an executive officer. But apparently these sorts of organizations perpetuate themselves by people who want to support a particular state chief executive.  In other words, after Governor Jerry Brown's term, the organization's insiders will leave (assuming they do not support his successor in office) and will be replaced by insiders who support his successor.  This might all be consistent with 501(c)(3)'s purpose of relieving the burdens of government, but I gotta agree with the article's implicit assertion that it just doesn't smell right!

Gov. Jerry Brown will look to a group of private donors — presently refusing to reveal their identities — to pay his rent at the luxury loft in downtown Sacramento where Brown and his wife live while in town. Donors are contributing to a nonprofit formed specifically to cover the costs of Brown's $3,000-a-month, 1,450-square-foot apartment.  In the past, the practice of having private donors pay for the governor's residence has alarmed ethics watchdogs. Under former Gov. Arnold Schwarzenegger, those who funded his Sacramento hotel penthouse had business before the state. Critics of the practice say the contributions afford those interests undue access and influence.  California is one of only a handful of states that does not provide an official governor's residence.  Brown's office referred questions to George Kieffer, who is president of the nonprofit, known as the Governor's Residence Foundation.  Kieffer said his group would release the names of donors and the amount they have contributed in January 2012. He said the group was raising money to pay Brown's rent, as well as his utility bills.

"We're budgeting some additional money assuming that, from time to time, there'll be entertainment there of legislators and others, as you'd expect in connection with a governor's residence, that are government-related," Kieffer said.  That could push the annual sum raised by the foundation close to $50,000 — all money that Brown would not have to spend.  Kieffer, a lawyer at the law firm Manatt, Phelps & Phillips, was head of the same nonprofit when it paid for Schwarzenegger's stays in the 1,800-square-foot suite at the Hyatt hotel, across the street from the Capitol.  Ethics groups accused Schwarzenegger of using the nonprofits that paid for the residence and other expenses to make an end run around campaign finance laws intended to limit the amount of money corporations and individuals can donate to a candidate. One of Kieffer's fellow foundation directors then was Bob White, who runs a Sacramento consulting firm, California Strategies, that has substantial business before the state. Donors to the fund included Lewis Investment, one of the country's largest private developers; the Western Growers Assn., which represents big farms in California; and developer Tejon Ranch, also a White client.  Kieffer's law firm has a lobbying arm in Sacramento and represents blue-chip clients such as Intel Corp., AT&T Inc., Toyota Motor North America and Xerox Corp.  Kieffer said he saw no conflict raising money for the governor's capital city housing. "Almost every law firm in the state deals at some time with the government," he said.

Kieffer is one of three board members who will govern the residence foundation, he said. The others are John Protopappas, a developer who is president and chief executive of Madison Park Financial Corp. in Oakland, and Zack Wasserman, a lawyer with the firm Wendel, Rosen, Black & Dean, also in Oakland.  All three have long ties to Brown. Kieffer served as general counsel to Brown's 1976 presidential campaign. Protopappas served as treasurer when Brown ran for mayor of Oakland. Wasserman has served as Brown's attorney.



June 27, 2011 in In the News | Permalink | Comments (1) | TrackBack (0)

Lady Gaga Japan Relief Efforts Lead to Federal RICO Lawsuit

Lady Gaga (Stefani Germanotta) and various companies have been hit with a federal RICO lawsuit alleging that contrary to public representations they retained a portion of the donations collected through the "Lady Gaga Japan Earthquake Relief Wristband" effort.  The class action suit, filed in the U.S. District Court for the Eastern District of Michigan seeks a range of damages, including punitive and treble damages. No response from Lady Gaga yet, but presumably one will be forthcoming shortly.

Coverage:  International Business Times.


June 27, 2011 in Federal – Judicial, In the News, International | Permalink | Comments (0) | TrackBack (0)