A “Help the Police” Scam: Introducing America’s Founding Father of Fundraising Grift

By Dave Wieneke | in Deceptive Marketing, Digital Agencies, Email Marketing & Abuse, Politics | 15 Jul 2024 | 5 Comments

Does this sound familiar? Fraudsters use a local police department’s name to solicit elderly donors with scam marketing. This week, I filed a criminal complaint about deceptive marketing using my local police department’s name in a scam directed at my mother-in-law. But along the way, I dug through financials and some history and found a figure that advanced scam marketing toward being the political and cultural force it is today.

The fraud I traced from my mother-in-law’s mail was likely run or inspired by America’s founding father of charity/political scam fundraising, Richard A. Viguerie. This type of scamming has become a multi-billion-dollar industry, where grifty solicitations play on people’s fear and emotions, enriching fraudsters with charitable revenue.

The operation I analyzed reported better than 25% top-line growth year over year. Unfortunately, the integration of Artificial intelligence and the use of dark-money PACs are likely to fuel further growth out of the sight of regulators. Donation fraud hurts communities by extracting resources that could be used within them, either by misdirecting them as theft or funding activities that are far away and unaccountable to donors.

Citizens Behind the Badge appears to be a profit center run by its largest vendor. That’s the most obvious way to explain an ideologically charged organization that raises money to help one group but then spends it on another. Viguerie and American Target have developed this art form over decades, and it is potentially one of numerous initiatives that advance an interlocking set of social and political goals and self-benefit.

This is a live issue, so I will post any updates here and link to them. Watch this space.

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Marketers who get “tricky” risk violating customer trust for a business goal, but risk and creativity can also set them ahead. For instance, the exceptional legal marketers at Sokolove Law sent me an appeal letter in an envelope, making it look like it contained a check. Payments get noticed. People with legal cases might well pay more attention to things that look like payments from law offices. That’s a tricky approach.

Most unsolicited mail never gets opened, so they took that extra step to get their appeal noticed. But, there’s a difference between being clever and deception. In this post, I’ll break down a fraudulent fundraising appeal and use their tax filings and some poking about the Internet to show how a business based on deception works and who might be behind it.

When Marketing Turns Criminal
The letter to my aged mother-in-law appeared to be from the local police. Just as with fake checks, when an envelope suggests the police have sent mail, it gets extra notice. Sure, the actual return address was printed nondescriptly across the back of the envelope. But once something seems official, careful people will open it, just to be sure.

The letter was a pitch from a tax-exempt 501(c)4 trade association called Citizens Behind the Badge. Though we hadn’t heard of this group, a Google Search shows numerous police departments posting warnings [1, 2, 3, 4, 5, 6, 7] about Citizens Behind the Badge’s fraud.

Citizens Behind the Badge’s Creative Package
The package has five components:

The envelope with a window to show the local police department name near where a return address would be.

 

A four-page main letter with a petition, donation commitment, survey, and two-page pitch. Again, they invoke the name of the local police in the mailing header, falsely suggesting their involvement.

A Back the Blue sticker

A mini-endorsement letter from a retired Narcotics officer who mentions their goal is political influence, not direct aid.

and a reply envelope, which says this is part of a Thin Blue Line Campaign.

And, of course, the disclaimer saves the last sentence from explaining that funds do go to law enforcement.

Rather than discuss direct marketing tactics, I’ll highlight two interesting facts.

• They want checks and never ask for credit cards. That surprised me. Why do you think this might be? Are seniors more willing to part with a check? Or is this somehow less subject to scrutiny than charges? Their website takes credit card donations via PayPal.)
• “Contributions do not go directly to local law enforcement agencies.” The last sentence in the long the small-print disclaimer negates the overall impression created by the entire kit.

So, where do their donations go? Their IRS fillings suggest far more of these funds go to marketers than law enforcement.

Citizens Behind the Badge Financial Overview
ProPublica posted the organization’s Form 990 for 2022, which is similar to an annual report to the IRS made by tax-exempt organizations. It shows the sources and uses of funds and asks questions about the organization’s activities.

Sources of funds:
Page one shows that revenue was up by over 26% from the year before in 2022. That’s impressive top-line growth. Nearly all the $4.147 million collected ($4.136 million) came through fundraising run by American Target Advertising in Manassas, VA.

Uses of funds:

• Staff:
  On page one, line 15, staffing is a $65K cost. If you want to “follow the money,” see the Consultants.
• Consultants:
  In comparison, the five top independent contractors listed on page 9 account for $1.737 million.

American Target Advertising in Manassas, VA – paid $558,010 for Marketing Services.
AMLC Brokerage (perhaps a subsidiary of American Target?) Manassas, VA – paid $243,392
Direct Mail Processing, Marietta, GA – paid $245,498
PMC Fontana, CA – paid $535,808
RHA Marketing, Waynesboro, PA $156,602

American Target Advertising

American Target Advertising promotes itself as the oldest and largest conservative direct mail marketing and fundraising agency for nonprofits. When Phyllis Schlafly needed to grow her list, she teamed up with Richard Viguerie, who ran her direct mail campaigns through American Target Advertising virtually throughout her political life. Together, they helped establish the influential conservative Council for National Policy (CNP) , and leaders including Jesse Helms, Ron Paul, and Strom Thurmond hired their firm to run fundraising appeals.

In April of this year, Zack Beauchamp wrote a history of political grift in Vox, which prominently featured Viguerie.
“He (Viguerie) realized that you could just ask people for money, and they would give it to you.”

“But the problem was that for that to be really effective on a national level, you needed lists of names. And lists of names of conservatives just didn’t exist until the Goldwater campaign in 1964. Viguerie realized that the donors to the Goldwater campaign comprised a national list of conservatives who would donate money. He said [it] was like a key to Fort Knox. ”

“People who are giving you money don’t really know what you’re doing with the money. You’re telling them you’re doing this and that, and maybe you are, and maybe you’re not…What they know is that they have grievances and concerns that you’re addressing, or you’re telling them you’re addressing.”

Back in 1977, the State of New York charged Mr. Viguerier for running a scam that substantially mirrors today’s Citizen’s Behind the Badge campaign. When the people who give money don’t know what’s happening with it, the possibilities are as open as the fundraiser’s standards.

From Wikipedia:

In 1977, the New York Attorney General’s office began procedures against the Korean Cultural and Freedom Foundation, which employed Viguerie.

Attorney General Louis J. Lefkowitz charged that the group (previously accused of links to the South Korean Central Intelligence Agency) had siphoned off the majority of $1.5 million in donations collected in 1975 for Southeast Asian children. New York’s Board of Social Welfare’s audit found that $920,302 was paid to The Richard A. Viguerie Co., which had solicited donations by mail.

Attorney General Lefkowitz held that the fundraising literature was “calculated to deceive the contributing public into believing that the greater portion of the money contributed would be expended for the specified program services.”^[9] The direct-mail campaign was called the “Asian Children’s Relief Fund” and pleaded for donations to help children with “terminal forms of malnutrition,” declaring “that the lives of 350,000 severely malnourished boys and girls [are] threatened unless immediate help is provided.”^[9]

The audit found that of the $1.5 million raised, only $31,015 went to six orphanages in South Vietnam and South Korea.^[9]

You can learn more about Mr. Viguerie from a CSPAN recording in which he discusses his career as a marketer and political operative and from an interview by Bill Moyers on PBS in 2004.

I believe the direct marketing we received was far more influenced and beneficial to people related to Viguerie and American Target than the staff listed in the 990 Form. The values shown by Citizens Behind the Badge are front and center in American Target’s mission statement: To help save America and Western Civilization using world-class direct mail marketing and fundraising for conservative, faith-based, and patriotic organizations.

Direct Mail Processing, Marietta, GA

Direct Mail Processing is a direct response mailing company with a history of sending consumers marketing which looks like official state forms. Officials in Iowa, North Dakota, and Tennessee have held them accountable for marketing that may be outside the law in their states.

The Better Business Bureau’s website is an archive of consumer complaints about DMP; they are rated F by the BBB.

Iowa’s Attorney General charted DMP with targeting older Iowans with deceptive marketing, which made insurance promotions look like a state program. So, the idea that they’d send something that tries to local like it is from local government fits a pattern.

A Bermuda Triangle of Potential Shell Contractors

PMC Fontana, CA

The filing says PMC is a consultant, and a firm with those initials, Pacific Mechanical Construction, does business at the address listed in the 900. But why would an issue advocacy organization pay a pipe-fitting company a half-million dollars? Either I’m not connecting the dots, or the name of a random company was listed as receiving proceeds from these scam soliciations.

RHA Marketing, Waynesboro, PA
This firm may have existed; a few thin LinkedIn profiles and local news stories suggest that. But there’s been no sign of life at RHA for quite some time. So, in both cases, I’d be curious about who is cashing these checks and what they did in 2022 for this campaign.

Scammy Fundraising Isn’t a Community Good
Page 11, line #26 of Citizens Behind the Badge’s Form 990 says that $3.943 million of the company’s $4.147 million was spent on “Joint Costs” shared between their program, fundraising, and management. This suggests that most spending may be oriented to shared outreach activities like sending out fundraising appeals, which educate and solicit at once.

Sending out packets, like the one we received, may be the core component of their community service. In other words, they produce junk mail, create concern, and gain donations in order to send more junk mail. The winners in the equation are the senders of solicitations, as they get, by far, the bulk of the proceeds.

Abdicating Enforcement Will Make This Worse
“Inattentive” may be the word that best describes this regulatory environment. On page 5 of Form 990, lines 6a and b ask if they always tell donors that their contributions are not tax deductible.

The expected answer would be, “Yes, of course, we do.” Surprisingly, they answer “no”. That answer begs for scrutiny or a move to reconsider tax-exempt status if failing to inform donors of this merits suspension.

Limiting the Fundraising Fraud Industrial Complex

Fundraising fraud has become a multi-billion dollar business in the US. CNN spotlights a similar organization that has raised tens of millions over the years, which donors had hoped would benefit the public good rather than create an endless spiral of solicitations. The New York Times podcast, The Daily, devoted an episode last year to how phone appeals for such fraud are being outsourced to foreign operates with DJ-style soundboards so they can play native voices making each part of their pitch and over-coming objections.

I’ve asked my local police to issue a community warning to identify this as a scam and to send a cease-and-desist notice preventing this group from using the department’s name in the future. I’m also in touch with state and federal contacts who could block future appeals, at least until the kinds of questions that I’ve raised here can be adequately addressed.

In California, Representative Katie Porter is working on the problem of how scam PACs enable fraudsters who pose as legitimate organizations to get and pocket donations. Her report, Political Parasites: How Scam PACs Cheat Us, starts to describe how updated laws could prevent donation fraud in this space which by design is hard to regulate.

What examples of scam marketing do you find particularly insidious? There’s no telling what might show up next in my mother-in-law’s mail. Thanks for reading, and, as always, please let me know your thoughts.