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August 16, 2011

Judge Bans Professional Fundraiser from Iowa Fundraising

(DES MOINES, Iowa)  A Polk County judge has banned a West Des Moines telemarketing company and its principals from all future Iowa fundraising, after the company agreed to permanently cease its operations.

Polk County District Judge Richard G. Blane, II ordered the ban against Michael and Vicky Davies of Waukee, owners of Lino’s, Inc. of West Des Moines, in a consent judgment filed Friday in Polk County District Court.  The consent judgment settles a consumer fraud lawsuit filed by Attorney General Tom Miller.

The consent judgment resolves a case that began with the execution of a search warrant in November 2010 by the Iowa Attorney General’s Consumer Protection Division, the United States Postal Inspection Service, and the West Des Moines Police Department.  At the time of the search, Miller said that Lino’s was conducting telephone solicitations for eight non-profits, all headquartered in other states: Children’s Charity Fund, Inc. (a.k.a. A Child’s Wish Association of America); American Veterans Foundation; Americans Helping Veterans Corp.; Defeat Diabetes Foundation, Inc.; Firefighters Burn Fund, Inc.; Hope Cancer Funds, Inc.; Operation Lookout; and Reserve Police Officers Association.  Each of these non-profits’ fundraising contracts allowed Lino’s, the for-profit telemarketer, to keep between 80 and 85 cents of every dollar raised.

(Note: The hyperlinks in the preceding paragraph link to recorded audio clips of Lino’s telephone solicitations on behalf of the respective non-profit organizations.)

The search warrant application detailed the contents of numerous undercover tape recordings of fundraising calls conducted by Lino’s on behalf of several of the non-profits.  According to the application, the recordings showed that telemarketers lied repeatedly about how much of each donation would go to the charitable purpose, where the charity was located, and whether the callers were unpaid volunteers.

“We alleged that Lino’s telemarketers engaged in a pattern of deceptive fundraising pitches, so we seized evidence under a search warrant,” Miller said.  “After we executed the warrant the operation closed down.  The owners have since accepted a court-ordered ban on further fundraising.  We think it’s a good result, because this will protect Iowans from further deception.”

Miller also noted that when several of the non-profits were confronted with the deceptive solicitations that had been conducted by Lino’s under their contracts, they agreed that all fundraising directed to Iowans would stop, either permanently or for several years.  Such out-of-Iowa agreements were reached with Children’s Charity Fund, Americans Helping Veterans, Defeat Diabetes Foundation, Firefighters Burn Fund, Inc., and Operation Lookout.

“Too often, a questionable charity hires a telemarketer and doesn’t much care whether donors are being misled in the charity’s name,” Miller said.  “We believe such charities may be liable for the deceptive pitches of the fundraisers they hire, especially if the charities don’t make reasonable efforts to control and monitor how solicitations are conducted.”

Miller noted that Iowans give generously to worthy causes, and they deserve to get honest answers to their questions when donations are solicited.  “Our undercover phone line has meant that telephone fundraisers can never be sure whether they might be talking to a staff member at the Consumer Protection Division who is recording the call,” Miller said.  “If that makes dubious fundraisers and questionable charities avoid Iowa, so much the better.”

Miller praised the work of the law enforcement agencies that worked with his office in coordinating the search of Lino’s Westown Parkway offices last fall.  “The Postal Inspection Service and the West Des Moines Police exhibited their usual professionalism and competence, and we are grateful for their participation,” Miller said.

Donor Beware!  How to avoid charity fraud and make the most of your donations:

  • Ask questions.  Be wary of claims that the caller is a charity worker or volunteer, that most of your donation goes to the cause, or that your donation will be used locally.
  • Don’t let a sympathetic charity name fool you – some fundraisers exaggerate or fabricate their support for veterans or military families, law enforcement, fire fighters, victims of disease, and children’s causes.
  • Ask phone solicitors to send written information.  Be suspicious if they insist on a pledge before they’ll send you information.  Check them out at the national Better Business Bureau “wise giving” site –
  • Don't give your credit card or checking account numbers over the phone to someone you don't know.
  • Give directly to a known charity of your choice.
  • Bottom line: Keep giving generously, but give wisely!  Giving to a known charity you’re confident about is often the best option.

If you think you have been cheated by a fundraising scheme, contact the Attorney General's Consumer Protection Division, Hoover Building, Des Moines, Iowa 50319. Call 515-281-5926, or 888-777-4590 toll free. Web site:


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