April 2, 2001
Web posted at: 4:16 PM EDT (2016 GMT)
NEWARK, New Jersey (Reuters) -- The Multiple Sclerosis Association of America and two former officers have agreed to pay $225,000 to settle a lawsuit accusing them of filing misleading financial reports and diverting donations to buy tickets to sports events and European trips, officials said Monday.
The state had accused the Cherry Hill, New Jersey-based organization in a 12-count suit with overstating to the state how much money went toward program expenses, and diverting charitable donations to fund trips to Europe by people outside the organization.
Donated funds were also allegedly used to pay the personal expenses of MSAA officers, including alarm systems, sporting event tickets and insurance policies.
The association, its former president, John Hodson, and former vice president, John Hodson Jr., denied wrongdoing as part of the settlement, which ended the lawsuit brought by the state in March 1999.
"We believe that the penalties ... will help deter those who may consider violating our state's charitable giving laws," Attorney General John Farmer said.
"At the same time, we have tried to balance deterrence with a desire not to penalize unduly the ongoing operations of a charity," now under new management, "that is essentially working for a good cause," Farmer added.
MSAA agreed to pay the state $150,000 in civil penalties, while the Hodsons, who are barred from having any affiliation with MSAA or any other New Jersey charity, will pay $75,000.
As part of the agreement,
MSAA will maintain greater control over its fund-raising activities, the
activities of its officers, directors, employees, volunteers and bank accounts
to ensure potential donors are not deceived. It will also provide semi-annual
reports to the state's consumer affairs department, detailing its program
service activities for one year.
Copyright 2001 Reuters.