The original lawsuit, filed in December 2017, includes Tracee Richardson, a Redmond woman, as a defendant. Photocopy of the court documents

The original lawsuit, filed in December 2017, includes Tracee Richardson, a Redmond woman, as a defendant. Photocopy of the court documents

Redmond woman tied to ‘sham’ charity scheme

The defendants gained more than $1 million and gave very little to those they claimed to be helping.

The state attorney general’s office announced last week that a King County Superior Court judge ruled the Haueter family deceived numerous people with four fraudulent charities.

Washington Attorney General Bob Ferguson filed a lawsuit in December 2017 accusing the Haueters of running “sham” charities and pocketing most of the donations. The family operation included Redmond resident Tracee Richardson, her parents, siblings and their spouses.

According to the lawsuit, the family used the charities in a scheme meant to solicit donations for seemingly worthy causes over the previous eight years. The defendants gained more than $1 million through deceitful practices while giving very little to the people they claimed to be helping.

“Instead of helping cancer patients and vulnerable children, this family took advantage of the generosity of Washingtonians,” Ferguson said in a press release. “That is wrong — and illegal.”

The court agreed with Ferguson after he filed a motion for partial summary judgment in November. The defendants were found to have violated the Charitable Solicitations Act and the state Consumer Protection Act (CPA).

While the defendants dissolved two of their charities after Ferguson filed the original lawsuit, they’ve continued to operate and deceive donors with their other two charities for the past year and simply funnelled the dissolved charities’ assets into the two remaining ones. The Haueters’ four charities are called Children’s Hunger Relief Aid, Children’s Safety Society, Emergency Relief Network and Search and Rescue Charities, but have gone by 23 different names and 19 different entities in the past, according to the release.

The family must now dissolve their remaining charities and Ferguson stated in the release that his office will seek the maximum penalty of $2,000 per violation and other restitution. The court will rule on the penalties at a later hearing.

Deceiving donations

The defendants claimed to assist numerous groups, including cancer patients, foster children and war widows, the press release states.

During the years of operation, the “sham” charities made about 15 million calls, soliciting donations with deceptive tactics. Roy Haueter, Richardson’s father, was the leading force in the numerous violations, according to court documents.

The Haueters would solicit donations throughout several states, including Oregon, Alaska, California and Idaho, court documents state. The family also maintained numerous post office boxes throughout Washington and other states to give the illusion that they were operating on a local level throughout various communities, despite officially operating out of Haueters’ home in Leavenworth.

Between 2010 and 2015, Richardson operated as president of the Cancer Exam Network, which is now known as the Children’s Hunger Relief Aid and also has operated under the name Children’s Hospital Emergency Fund. According to conclusions in court documents, Richardson either participated in the wrongdoing or was “so willfully ignorant of the activities of the charity and/or grossly negligent in carrying out her duties,” that she is individually liable for violating the CPA.

Specifically, the defendants made various claims in numerous efforts to encourage donors to give them money and would always say the money was going to local people in need.

“I remember the caller said that the donation will help local women,” said one anonymous donor in the release after donating to the Cancer Exam Network. “As someone battling cancer myself, this seemed to be an important cause to contribute to.”

Regardless of the defendants’ claims, court documents state that only a small fraction of the money went toward helping anyone and nearly all of the actual donations only went toward gift cards for Head Start programs in Washington or to low-income children.

The charities would even solicit donations from the same donors under different names throughout a given year. According to a press release, one resident received eight solicitations within a year from six different charities that were all coming from the Haueters.

“Many Washingtonians donated to the Haueters’ organizations believing their money would go toward one beneficiary, when in fact that money went toward a completely different person in need, or no beneficiary at all,” the attorney general’s office wrote in the press release.

Shifty money

During the scheme, the Haueters exchanged funds among four organizations, attempting to keep annual donations below $200,000 for each charity and therefore maintain less strict tax reporting requirements. The charities even claimed 99 percent of their donations went toward their fraudulent programs, court documents said.

According to the release, Richardson admitted that she was “unaware of the charity ever supporting cancer research or uninsured women — the two purported beneficiaries of its donations.”

The attorney general’s investigation found that during operations, the charities collected about $3.6 million from donors through their deceptive outreach and took about $1.4 million. The attorney general’s office believes the remaining funds covered administrative cost.

“Today’s ruling ensures that the organizations can no longer deceive donors into giving,” Ferguson’s office stated in the release.

The office provided a link to their website, www.atg.wa.gov/charities, to help people avoid being scammed by “sham”’ charities.

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