The charity, Kars-R-Us.com, and its operators, Lisa Frank and Michael Irwin, allegedly solicited donations on behalf of the United Breast Cancer Foundation (UBCF), which claimed to help individuals suffering from cancer, according to the statement.
“Kars solicited vehicle donations through national and local TV, radio and online ads in English and Spanish, claiming the donations would allow UBCF to ‘save lives’ by providing free and low-cost breast cancer screenings,” the statement reads.
“But, in reality, only $126,815 or 0.28 percent of the more than $45 million that Kars raised was used to provide breast cancer screenings.”
Kars arranges the transportation and sale of all donated vehicles, claiming that 75 percent to 80 percent of the gross collections from each auto donation go to charity, according to the complaint.
“In truth, most of the proceeds from each vehicle donation do not go to charities,” it reads. “Defendants retain typically 80–90 percent of the gross amount fundraised to pay themselves and their vendors while the amount to the charity is 10–20 percent of the gross proceeds.”
In this specific case related to donations collected on behalf of UBCF, Kars allegedly raised more than $45.5 million for the charity between 2017 and 2022, with more than 84,000 people donating their vehicles.
“[Out of the more than $45.5 million,] $34.9 million of those raised funds went to pay Kars, its operators, and its vendors,” the FTC stated.
“Of the fraction of funds left to UBCF, most were largely used for other purposes, including generous compensation to UBCF’s CEO.”
Kars, Frank, and Irwin also faced a fine of more than $3.8 million, which was partially suspended based on the assessment that the parties are financially unable to pay the full amount, the agency stated.
“If Kars, Frank, and Irwin are found to have lied to the FTC and state partners about their financial status, the full judgment will be immediately payable,” the FTC statement reads.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said the case should send a “strong message” to fundraising groups that the agency will take strict action if they “misrepresent the truth and exploit the kindness of generous donors for their own gain.”
The Epoch Times reached out to Kars for comment but did not receive a response by publication time.
“Scammers prey on the generous by creating bogus charities or misrepresenting real charities,“ the statement reads. ”Pleas for money may come door-to-door, through emails and texts, on the phone, or even at grocery stores and other places with donation buckets.
“In addition to lining their own pockets with your generous donation, scammers may also be after your personal and financial information.”
The agencies advised Americans to donate to charities they know and trust, verify the legitimacy of any donor solicitation, and make any contributions to a charity directly rather than relying on third parties to make contributions on their behalf.
They recommended donating via credit card or writing a check directly to a charity rather than to any individuals.
“Avoid charities that ask for you to pay by cash, gift card, virtual currency, or wire transfer,” the statement reads.
“By reporting fraud, you can help the FTC’s investigators identify the scammers and stop them before they can get someone’s hard-earned money,“ the agency stated. ”It really makes a difference.”
