Two men investigated by the Center for Public Integrity for a story about groups that fundraise for causes like childhood leukemia but keep virtually all the money have been charged in connection with “schemes to defraud donors,” according to the U.S. Attorney’s Office for the Southern District of New York.
Richard Zeitlin, 53, and Robert Piaro, 73, were both arrested and charged Thursday with wire fraud in connection with telemarketing.
Public Integrity reported in 2019 that Zeitlin, of Las Vegas, ran telemarketing businesses that helped fuel a trend of political action committees spending little on the causes they were supposedly benefiting. The pitches for donations came on behalf of groups that sounded like charities, playing on donors’ sympathies for ill children, struggling veterans and others in need.
“During the last four years,” reporters Sarah Kleiner and Chris Zubak-Skees wrote, “the U.S. saw a significant spike in the number of PACs that raise most of their money from small-dollar donors before plowing much of it back into salaries, administrative costs and raising more cash. … PACs that contract with Zeitlin account for about half of that spike.”
The indictment alleges that Zeitlin directed his employees to portray PACs as charities, then “made efforts to conceal” those actions.
Piaro, of Wisconsin, ran PACs such as Americans for the Cure of Breast Cancer. That group raised more than $2 million from 2018 through January 2020 but “made only a single charitable donation of approximately $10,000 to one breast cancer charity … and did not otherwise materially fulfill the representations made to donors,” the indictment alleges.
Both men “allegedly exploited these important causes and the good intentions of everyday citizens to steal millions of dollars in small donations,” Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement.
Neither man’s attorney could immediately be reached for comment. But Lance Maningo, Zeitlin’s lawyer, told the Las Vegas Review-Journal that his client had been cooperating with the U.S. Attorney’s Office for more than a year.
Public Integrity’s investigation into Zeitlin’s operation was cited in a class-action lawsuit filed against him in 2021. “Instead of putting the millions of dollars raised by the Zeitlin companies to work for these noble causes, the scam PACs and their complicit treasurers (who also profit from this massive scheme), funnel nearly all of the funds back to the Zeitlin companies through an array of bogus and inflated overhead expenditures,” the lawsuit stated.
Zeitlin denied the allegations in the suit, which is pending.