Attorney Greg Lam said the "weight of the inquiry" has already resulted in the organization closing down its operations some time ago. As of midday Wednesday, however, CABC's website, seen above, remained active.
A bogus breast cancer charity fraudulently raised more than $9 million over five years as its directors used the funds as a "personal piggy bank" for benefits packages, exorbitant salaries and loans to purchase upscale Long Island homes, as well as personal goods like cellphones, television and Internet services, authorities said.
In a 42-page complaint filed Tuesday in New York's Suffolk County, New York Attorney General Eric Schneiderman alleges the Long Island-based Coalition Against Breast Cancer (CABC) solicited $9.1 million from the public since 2006. According to the lawsuit, CABC spent less than one-half of 1 percent of donations raised during that time for breast cancer prevention or detection. In 2008 alone, CABC raised more than $1.4 million in donations, but spent just $374 on mammograms.
"By using a charity as a personal cash machine, the Coalition Against Breast Cancer and Campaign Center shamelessly exploited New Yorkers’ natural sympathies and generosity," Schneiderman said in a statement. "Instead of benefiting breast cancer victims and their families, millions of dollars were misused for personal benefit. This type of scam will not be tolerated in New York, and my office will continue its work to stop charities fraud and hold those who commit it accountable."
In a statement to FoxNews.com on Wednesday, CABC attorney Greg Lam said the organization intends to dispute the charges.
"Although far from a sham organization as falsely stated by the Attorney General, representatives of the organization and their legal counsel have been in discussions with the state's representatives for most of 2011 actively trying to address the issues raised by the state," Lam's statement read.
Lam said the "weight of the inquiry" has already resulted in the organization closing down its operations some time ago. As of midday Wednesday, however, CABC's website remained active. Although donations cannot be accepted via the website, users can still download a form to mail funds to a post office box in St. James, N.Y.
The lawsuit charges CABC's directors -- Andrew Smith, Debra Koppelman and Patricia Scott -- with engaging in a scheme to defraud and violating New York's not-for-profit and charitable solicitation laws. It also charges CABC's principal fundraiser, Campaign Center, and its owner, Garrett Morgan.
"In short, [d]efendants have misused and wasted millions of charitable dollars that could have been used to treat and potentially save an untold number of breast cancer victims across this state and country," the lawsuit reads.
Smith and Koppelman also allegedly engaged in substantial insider transactions, including $105,000 in loans to Smith, a $50,000 loan to Koppelman to purchase a Long Island residence in St. James, N.Y., and a "risky stock sale" by Smith to CABC, authorities allege.
Smith, Koppelman and Scott -- all of whom were employed elsewhere -- allegedly used the ill-gotten funds to pay themselves salaries totaling more than $550,000, $150,000 worth of retirement benefits, dental and medical benefits, as well as free BlackBerry phones.
Lauren Passalacqua, a spokeswoman for the attorney general's office, said the website remains active because judgment has not yet been delivered on the lawsuit filed on Tuesday.
"Shutting down the website -- and CABC overall -- is part of the relief the attorney general’s lawsuit seeks," she said in a statement to FoxNews.com.
Any donor who suspects they have been victimized by charitable solicitation fraud is urged to contact the attorney general's office at www.charitiesnys.com or (212) 416-8401.
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