December 13, 2018
LANSING - Michigan Attorney General Bill Schuette today announced a settlement with National Emergency Medicine Association (NEMA), a Maryland-based charity that solicits nationwide. As part of the settlement the charity will cease operations and dissolve in response to the Attorney General’s allegations of deceptive solicitations. NEMA was claiming to raise funds for the National Heart Council, National Alzheimer’s Council and the National Heart Disease Council, which were supposed to be fighting these diseases.
“For years, NEMA took donations from unsuspecting donors but failed to honor the trust those donors placed in them,” Schuette said. “All charities that solicit in Michigan should take note: don’t lie or misrepresent your activities to Michigan donors.”
In addition to requiring NEMA’s dissolution, the settlement prohibits NEMA President Kelly Herzog from serving as an officer, director, trustee, or other fiduciary of a charity. Civil penalties of $192,655 against NEMA and $127,950 against Herzog will be suspended if both enter bankruptcy as they intend to do.
In September, following an Attorney General investigation into NEMA’s solicitations and program activities, Schuette issued a Notice of Intended Action alleging that NEMA was deceiving the public by raising money to provide grants for medical research and medical equipment, and otherwise to fight diseases such as Alzheimer’s, stroke, and heart disease. As part of the investigation, NEMA was required to produce its solicitation materials, to document its charitable programs, and to justify its joint cost allocations. The charity’s responses revealed numerous violations.
The response revealed that NEMA had not made research or equipment grants in over 15 years. NEMA used the funds raised almost exclusively to continue funding NEMA’s sweepstakes fundraising campaigns, which NEMA inaccurately reported as an “educational” charitable program.
Even though almost all NEMA’s funds raised are used to fund additional sweepstakes mailings, there has not been a sweepstakes winner since 2013.
In the last three reported financial years, NEMA had just six grants totaling $13,965, two of which were $200 grants to send disabled children to the circus—a purpose unrelated to NEMA’s mission to combat disease. In 2015, a year that NEMA raised nearly $1 million in donations, NEMA reported $650 in grants. Yet in its response to the Attorney General, NEMA admitted that this overstated its grants for the year, which were limited to one grant—a $200 grant for the circus.
Despite making minimal charitable grants and having almost no meaningful charitable programs (and few sweepstakes winners), during the years 2006 to 2016, NEMA’s President Kelly Herzog received total compensation and benefits of $1,786,826, an average of $162,438 per year.
Over the last two years, Attorney General Schuette’s Charitable Trust Section has ramped up its enforcement of Michigan’s law prohibiting deceptive charitable solicitations.
Below are some of Michigan’s recent charitable solicitations fraud actions:
Complaints regarding charitable solicitations may be filed through the Attorney General’s online complaint form, or by mailing the Charitable Trust Section at P.O. Box 30214, Lansing, MI 48909-7714, or by emailing the Charitable Trust Section.
To assist individuals in making wise decisions regarding which charitable donations to support, Attorney General Schuette established an online searchable database for charities. The Attorney General also publishes an annual professional fundraising charitable solicitation report, available at on the Attorney General website. Through these resources, users have access to information to aid them in determining which charities are worth supporting—and which are not. The Attorney General's Charitable Trust Section is also available at 517-373-1152 to answer inquiries about a charity.