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3 LI charities, fundraiser, accountant settle case for $500,000

The exterior of the home in Farmingville, seen

The exterior of the home in Farmingville, seen on Feb. 3, 2014, where Lynne Speciale's charity, Bi-County Helpline for Abuse Against Women and Children, is registered. The charity was one of three Long Island charities that reached a settlement with the New York attorney general. Credit: Joseph D. Sullivan

Three Long Island charities were shuttered and agreed with a fundraising company and accountant to a $500,000 settlement after state officials said they purported to solicit funds for domestic violence victims, the hungry and breast cancer research but only doled out a fraction of the money to their causes.

Bi-County Helpline for Abuse Against Women and Children; Long Island Responds; and Breast Cancer Funds for Research "conducted virtually no charitable activities," according to papers filed Monday in state Supreme Court in Manhattan by New York Attorney General Eric T. Schneiderman.

The charities neither maintained accurate financial records nor had functioning boards, officials said. More than 80 percent of $2.2 million solicited between 2007 and 2012 by Mure Associates went to Mure.

Mure and the charities also "falsely described" the groups' missions to prospective donors, the attorney general said.

"Operators of sham charities like these prey on the generosity of New Yorkers and must be held accountable," Schneiderman said.

The agreement pending court approval, mandates that Mure, the charities and their accounting firm, Portfolio Planners, pay their share of the $500,000. Mure is a fundraising company co-founded by a deceased relative of the heads of two of the charities.

Attorneys said the charities were small groups run by well-intentioned elderly women living on fixed incomes.

Peter Stein said client Yvonne Caraftis, 66, a retired bus driver from Port Jefferson who ran Long Island Responds, which claimed to provide information resources to the hungry, "took pride in trying to help charities."

"My client was not advised by a good accountant, nor a lawyer, as to the proper formalities needed to be observed in setting up a charity," he said.

Caraftis took over the charity from her elderly mother, Stein said.

"They weren't doing this to make money," said Stein, who also represents Maryann Hanovic, 63, of Selden, head of Breast Cancer Funds.

Manhattan attorney Allen Green, who represents Richard Thomas, the sole principal of Portfolio, who state authorities said is not a licensed CPA, could not be reached. Thomas, who was prohibited from conducting audits and reviews because he's not a CPA, prepared documents that contained "material misstatements," officials said.

He is now barred from providing accounting services to New York registered not-for-profit corporations.

Schneiderman said the bureau "will continue to pursue" groups that violate the state's non-profit laws and their "fundraisers and advisors."

In 2013, Schneiderman obtained a nearly $3.1 million award against fundraiser Campaign Center Inc., and its principal Garrett Morgan over a "sham charity," Coalition Against Breast Cancer.

The attorney general's office's Charities Bureau initiated the latest investigation after a December 2012 bureau report showed that a tiny fraction of donations went to charitable causes.

The bureau revoked their registrations last spring.

Court papers say about $53,000 of the $2.2 million raised was directed at "legitimate charitable purposes."

Daniel Kurtz of Manhattan, attorney for Mure's owner Harriet Waldbaum, 67, of Centereach, said he is pleased she can "resume her work in supporting efforts of charitable organizations."

Waldbaum is allowed to continue working with charities, with certain restrictions.

Lynne Speciale, 66, of Farmingville, director of Bi-County Helpline, is also allowed to engage in restricted charity work. State authorities said Speciale claimed to provide a crisis helpline, but it was just a phone number that rang into her home.

She used donations to pay her cable and telephone bills and Macy's credit card bills, the attorney general said.

Manhattan defense attorney Shveta Kakar said Speciale did nothing "nefarious." "The help line has been around for a while and it kind of organically grew," she said.

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