A Las Vegas telemarketer, whose previous businesses were screened for possible “unfair or misleading acts” by the Federal Trade Commission, has received tax-funded loans to help small businesses struggling financially due to the COVID-19 pandemic.
Compliance Consultants LLC and Advanced Telephony Consultants LLC, both operated by Las Vegas telemarketer Richard Zeitlin, received Paycheck Protection Program (PPP) loans totaling $ 500,000 to $ 1.3 million in May. This is according to a database published by the US Small Business Administration that reports loan totals in ranges instead of the exact loan amounts.
The SBA distributed the PPP loans as part of a package of coronavirus stimulus laws passed by Congress in April.
Zeitlin was at the center of a center for public integrity Research published last year That found that its companies, including Compliance Consultants, withheld $ 133.1 million out of $ 153.1 million raised by American donors on behalf of political and nonprofit organizations between 2006 and 2019. (Advanced Telephony Consultants was not part of the Public Integrity investigation.) Zeitlin’s staff asked donors to help children with leukemia, women with breast cancer, police officers, firefighters, and veterans, but very little was spent on the causes they championed.
The FTC and attorneys general in various states have closed at least five of the charity clients who contracted Courtesy Call, a former Zeitlin company, for allegedly misleading donors. Zeitlin was not involved in any of these lawsuits, nor were he or any of his companies charged with misconduct.
However, the FTC investigated whether two of Zeitlin’s previous companies, Donor Relations and Courtesy Call, “committed unfair or misleading acts or practices” according to a court document filed by the Commission in February 2018.
However, the companies did not cooperate, failed to meet deadlines and, according to court documents, sent the FTC “obviously inaccurate” documents. The commission closed its investigation in late 2018, citing an ongoing South Florida grand jury investigation involving Courtesy Call and Donor Relations.
“It is clear that the [Paycheck Protection] The program failed to significantly screen loan applicants and granted loans to companies that have been the subject of multiple government investigations, ”said Brett Kappel, campaign funding attorney at Harmon Curran law firm.
Zeitlin’s lawyer could not be reached in time for the publication.
Public Integrity with less than 50 employees, received $ 658,000 under the PPP program.
Zeitlin’s telemarketing tactics are part of a growing trend. In the US, there has been a surge in the number of political action committees that raise most of their money from small donors before putting much of it back into salaries, administrative expenses and more money, according to a public integrity analysis of more than 68.7 invest millions of campaign financial records compiled by the Center for Responsive Politics.
PACs contracting with Zeitlin accounted for about half of that increase. Before joining PACs a few years ago, Zeitlin raised tens of millions of dollars on behalf of charities.
By and large, nonprofits and political committees are allowed to spend almost anything they collect on fundraisers. However, it is not legal to mislead potential donors about how their money is being used. It is due to a patchwork of federal and state investigators, each with different competencies and responsibilities, the lawyers for the police.
Some of the organizations that have signed contracts with Zeitlin’s firms over the years have been, or are currently being run by people with troubled histories, including a shamed Florida attorney and a charity board member that it was shut down from the supervisory authorities. Four of the groups are led by an officer from the Las Vegas Metropolitan Police Department accused in a 2018 federal lawsuit for “excessive and unreasonable violence” when he shot and killed a man armed with a knife six times. The lawsuit was dropped in 2019.
Following the Public Integrity story, Las Vegas police said it was “Look in” the work that civil servant William Pollock did on behalf of political committees. A department spokesman said Pollock voluntarily resigned on June 10. It is unclear whether he was reprimanded or whether his resignation was related to the results of his work for PACs. The department said his personnel file was not public.
Federal regulators have cracked down on charities and political committees who spend most of the money they raise on fundraisers and overheads.
A federal judge in February convicted political activist Scott B. Mackenzie to 12 months and one day in prison for making false statements to the Bundestag Electoral Commission.
Mackenzie – one of Washington’s most prolific and controversial political fundraisers – was the treasurer of more than 50 federal political action committees. At least a dozen of them pretended to raise money for political and social causes, but they spent most of the money they raised from unsuspecting donors on fundraisers, salaries, and overheads.
In March, the Virginia Attorney General shut down two veteran charities that allegedly misused $ 13 million in donations from unsuspecting Americans.
The American Veterans Association and the American Homeless Veterans Center were the focus of a 2017 Public Integrity Investigationtogether with Put Vets First! PAC, a related political action committee, all from the same office at Falls Church and chaired by retired Army Major Brian Arthur Hampton.
The organizations promised to help homeless veterans with food, shelter, and professional training, but they spent almost all of their money on it Professional Telemarketersthat has also examined public integrity.
Hampton hired Zeitlin’s company to provide fundraising services.
As part of a settlement agreement With the state, Hampton was permanently banned from soliciting donations and from playing any financial role for other nonprofits.
According to a press release from Virginia Attorney General Mark Herring, he was also ordered to split $ 100,000 between three charities “that provide real support to homeless veterans.”