“We are bringing closure to the many well-intentioned and generous donors who gave to this allegedly fraudulent charity, and bringing genuine relief to low-income families whose homes were damaged or destroyed by Sandy,” Acting Attorney General John J. Hoffman said.

The principals of HSRF, John Sandberg and Christina Terraccino, had previously settled with the State after the Division of Consumer Affairs and Division of Law filed suit against them for operating an unregistered charity, and allegedly misleading the public and making false claims while soliciting donations for HSRF.

“Thanks to the hard work of our investigators, Division of Law attorneys, and the Organization Administrator, the donated funds are finally being used as the donors intended, to help victims of Superstorm Sandy,” Acting Director Steve Lee of the Division of Consumer Affairs said.

Habitat for Humanity of Monmouth County will receive $75,000. The funds will be used to construct homes for three low- to moderate-income families, one in Sea Bright and two in Union Beach, whose homes were destroyed by Superstorm Sandy.

The Food Bank of Monmouth & Ocean Counties, based in Neptune, will receive $25,000 – an amount in addition to the $50,000 this organization received in April 2014, through an earlier distribution of HSRF donations. The money will be used to support the Food Bank’s network of food pantries and mobile pantries that provide food for thousands of families affected by Superstorm Sandy.

The State filed suit in February 2013 against HSRF and its principals, Sandberg and Terraccino, alleging that they misled the public by diverting donated funds into their personal accounts, falsely claimed donations were tax-deductible when the organization did not have 501(c)(3) status, and operated an unregistered charity, among other violations of New Jersey’s Charitable Registration and Investigations Act, Charities Regulations Act, and Consumer Fraud Act.

Through a settlement reached in June 2013, a court-appointed Organization Administrator took control of HSRF and its financial accounts from Sandberg and Terraccino in order to properly distribute donated funds and to dissolve the organization. In addition, the settlement agreement permanently bars Sandberg and Terraccino from ever operating any charitable organizations related to Superstorm Sandy, and bars them for at least two years from serving in leadership positions in any charitable organization in New Jersey.

With today’s announcement, a total of $325,000 received by HSRF from donors has been distributed to legitimate charitable organizations for the aid of Superstorm Sandy victims.  The initial $225,000 was distributed in April 2014 to three organizations registered in New Jersey and one registered in New York State.

All of the organizations that received HSRF donations were selected based on their proposals to specifically use the money to help Superstorm Sandy victims, in accordance with the representations that HSRF originally made to the public when soliciting donations.

Chief Investigator Laurie Goodman, of the Office of Consumer Protection within the Division of Consumer Affairs, conducted the investigation of this matter. Deputy Attorney General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section in the Division of Law, represents the State in this action. Nancy E. Kelly of NE Kelly & Associates, LLC has functioned as the Organization Administrator.

Advice for Consumers

The Division of Consumer Affairs encourages New Jersey consumers to learn as much as possible about any charity before deciding to make a donation. Consumers should:

• Find out whether the charity is registered in New Jersey, or is exempt from having to register. (Certain religious and educational organizations, and charities whose annual income includes less than $10,000 in public contributions and fundraising, are exempt from having to register with the State.)

• Find out how much the charity spent during recent fiscal years on program costs, management costs, and fundraising.

• Learn about the charity's stated mission.

Consumers may obtain information about a charity in several ways. They can ask the charity itself (reputable charities encourage you to do so), or visit the charity's website.

Consumers can also obtain this information from the New Jersey Division of Consumer Affairs. Visit the Division's Charities Registration page; call the Division's Charities Hotline at 973-504-6215 during regular business hours; or use the Division's free "New Jersey Charity Search" smartphone app.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

Follow the Division of Consumer Affairs on Facebook, and check our online calendar of
upcoming Consumer Outreach events.

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