Charities employ controversial telemarketers to tug on heartstrings — and loosen purse strings

Businessman banned in New York still raking in millions from unsuspecting donors, regulators say

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Defense attorney Joseph Patituce (left) holds up a document for telemarketing executive Mark Gelvan (right) during testimony in a court proceeding Oct. 9, 2013, in Cleveland.

Tony Dejak/AP 

MONTVILLE, N.J. — Homeless veterans. Breast cancer survivors. Disabled police officers. Children with leukemia.

In the name of helping these people and others like them, a private telemarketing company has for years solicited millions from donors while keeping the vast majority of the cash for itself.

The company, Outreach Calling, raised more than $118 million on behalf of about two dozen charities from 2011 to 2015, according to a Center for Public Integrity analysis of state government records. The company kept $106 million of this haul, leaving $12.2 million — or 10.3 percent — for its client charities.

Now Outreach Calling is expanding into the highly unregulated realm of political fundraising. In the first nine months of the year, the company has kept $1.3 million out of the $1.5 million raised for a veterans-focused political action committee that’s emerged ahead of critical 2018 midterm elections.

RELATED: Donors give millions to help veterans, but most goes to telemarketers

The man New York state regulators say is the driving force behind Outreach Calling is Mark Gelvan, a wealthy 49-year-old New Jersey businessman whom they banned in 2004 from fundraising in New York, in part because his solicitors impersonated police officers when they asked for donations.

It’s not against the law for telemarketers to keep most of the donations they raise. It is illegal to mislead prospective donors or lie to them about how their contributions will be used, said Jim Sheehan, head of the charities bureau for the office of New York Attorney General Eric T. Schneiderman.

Nonprofit watchdogs say the most effective organizations spend no more than 25 percent of their expenses on fundraising and overhead. CharityWatch, a nonprofit that analyzes charities’ financial statements, has given an “F” on an A+ to F scale to 13 of 16 charities that contracted with Outreach Calling in 2016 and 2017.

Two of the charities that hired Outreach Calling have been shut down by the New York attorney general’s Office in recent years, and Gelvan — whose wife owns multi-million dollar properties in New Jersey and Florida — remains under New York state investigation, according to court documents.

 

Banned for life

Gelvan’s work in fundraising spans decades and states.

In 1989, at age 21, Gelvan formed the fundraising company All-Pro Telemarketing Associates Corp. with two business partners, according to New Jersey business records. Within seven months, Gelvan was the sole director.

Over the next decade, he took on a stable of charities as clients, including groups with heartstring-tugging names such as the American Foundation for Disabled Children, the Committee for Missing Children and the Disabled Police Officers Counseling Center Inc.

Gelvan stood out among his competition in the telemarketing world, according to an analysis of reports produced by the New York Attorney General.

In 2003, the average telemarketing company registered in New York to raise charitable contributions  sent about 34 cents out of every dollar it raised back to the nonprofit that hired it and kept about 66 cents for itself, according to a report published by the New York attorney general’s office in 2004.

Gelvan’s All-Pro Telemarketing Associates Corp. fell far short of that average: it raised $4.2 million in 2003 and gave $550,774.96 back to the 15 charities it was working with, according to the report. Those charities received, on average, 13.3 cents out of every dollar Gelvan’s company raised for them.

Regulators took notice.

According to a complaint the New York Attorney General filed against him in 2002, Gelvan had raised $5.8 million from New York residents from 1996 to 2001 on behalf of the Fraternal Order of New York State Troopers Inc. Less than $900,000 of the $5.8 million All-Pro Telemarketing Associates Corp. raised during this period went to the troopers charity.

The New York State Attorney General’s office alleged that Gelvan’s solicitors pretended they were police officers when asking for donations.

After settling the case in 2004 and agreeing never to raise funds in New York again, Gelvan changed the name of his company from All-Pro Telemarketing Associates Corp. to All-Pro Associates Corp., according to records from the New Jersey Division of Revenue. Gelvan changed the company’s name again, in late 2005, to Outsource 3000 Inc.

The New York attorney general’s office says in court documents it believes Gelvan, through Outsource 3000, is financially linked to Outreach Calling, the telemarketing company that has kept 90 percent of the more than a hundred million dollars it has raised for charities in recent years.

The phantom at the top

Outsource 3000 is based at 150 River Road in Montville, New Jersey, according to New Jersey’s business records, but it’s not easy to find.

The office is about four miles from the $2.6 million gated home Gelvan’s wife owns in the tony Valhalla Estates neighborhood, overlooking Lake Valhalla.

Gelvan and his wife, Lina, bought the lot together in 2001, but Lina became the sole owner in 2002, two months after the New York Attorney General’s office filed a complaint against Gelvan and All-Pro Telemarketing Associates. Gelvan is registered to vote at the address of the Valhalla Estates home, which was built in 2008 on the lot Lina Gelvan owns.

When the Center for Public Integrity visited Outsource 3000’s office building last month, a directory listing for the company’s suite didn’t name the company. Instead, the sign said “ALL DELIVERIES.” The door to the suite was labeled “Mail Response Services.”

When asked if the office was the headquarters for Outsource 3000, a receptionist said no, it was the New Jersey office of Outreach Calling. When the reporter asked for Gelvan, the receptionist said he wasn’t in, but that she’d pass along a message. (Gelvan did not return the message left at his office or multiple calls to his cell phone.)

Damian Muziani, an aspiring actor, is listed as the sole owner of Outreach Calling.

Muziani exchanged several emails with the Center for Public Integrity but did not agree to be interviewed on the record for this story.

Numerous calls to Outreach Calling were fielded by people working for an answering service, and messages seeking comment were not returned.

Court documents filed in May by New York regulators allege that Outreach Calling is effectively controlled by Gelvan; the documents make no mention of Muziani.

Brian Arthur Hampton, who runs a veterans nonprofit and the Put Vets First! political action committee that contract with Outreach Calling, said he has never met Muziani in person, but Muziani signs the contracts between Outreach Calling and Hampton’s organizations.

Gelvan, not Muziani, has personally given Hampton a tour of Outreach Calling’s New Jersey office, Hampton said.

Like Hampton’s nonprofits, two breast cancer foundations from Florida also have links, via Gelvan, to Outreach Calling.

The Woman to Woman Breast Cancer Foundation was named to the Tampa Bay Times/Center for Investigative Reporting’s list of 50 worst charities in America in 2013. (So was Hampton’s nonprofit, Circle of Friends for American Veterans.)

Woman to Woman Breast Cancer Foundation founder Jacqueline Gray told the Times she and her husband struggled for years to raise money on their own. But Gelvan approached them with a deal: let him do the difficult telemarketing work while they waited for money to roll in.

All they had to do was agree to let him keep 90 cents out of every dollar he raised, according to the Times. They agreed, and their charity’s overall income skyrocketed from less than $15,000 in 2008 to $6.5 million in 2010.

Gray told the Tampa Bay Times that Gelvan gave her a tour of Outreach Calling’s phone room in New Jersey.

According to state records filed in Utah, Outreach Calling raised more than $8 million in the name of Woman to Woman Breast Cancer Foundation from 2010 to 2016. Only about 10 percent of that amount, or $816,000, made its way to the charity.

During the same time period, Outreach Calling raised $18.5 million  for the Aventura, Florida-based  Breast Cancer Survivors Foundation. It kept for itself all but $1.9 million, according to Utah’s records.

Dr. Yulius Poplyansky, a physician specializing in internal medicine who immigrated from Latvia to New Jersey in 1979, was close friends with Gelvan’s father, who also relocated from Latvia to the United States.

Poplyansky wanted to start a charity in 2009 that raised money for prosthetics and treatment to Israelis who had been injured by explosive devices, according to documents filed by the New York Attorney General’s office. He approached his friend’s son, Mark Gelvan, who was in professional fundraising, for advice.

Gelvan suggested Poplyansky focus on breast cancer instead — “a proven charitable money-maker” — and let Gelvan handle the fundraising for him, according to documents filed by the New York attorney general’s office.

Gelvan’s Outsource 3000 loaned the Poplyansky’s Breast Cancer Survivors Foundation $5,000 in May 2010 to defray start-up costs.

“I was personally devastated when I lost several patients to Breast Cancer,” a fictional doctor said on the foundation’s solicitation material, which was produced by Gelvan, according to the New York Attorney General’s documents. “By the time they came to our facility, they were in stage four and it was already too late.”

Poplyansky has no medical expertise with breast cancer or oncology.

The solicitation leads potential donors to believe that the foundation had a facility where it saw patients, but it didn’t, according to court documents filed by the Attorney General. It also said it conducted forums for breast cancer survivors and conferences for physicians, oncologists and survivors to exchange information, but there’s no evidence it ever did.

Tax returns show the foundation’s professional fundraisers raked in $11.7 million from 2010 to 2014, but the Breast Cancer Survivors Foundation itself received less than 10 percent of that amount.

The foundation “diverted millions of dollars away from legitimate breast cancer charities and programs,” the New York Attorney General’s office said.

In June, Poplyansky agreed to settle a complaint the New York Attorney General’s office brought against him and the Breast Cancer Survivors Foundation.

He agreed to pay $350,000 and shut his charity down. He also agreed to cooperate in the attorney general’s further investigations and to testify in related proceedings.

When reached via phone in Florida, Poplyansky said he didn’t keep in touch with Gelvan, his former family friend, and declined to comment.

“My lips are sealed,” Poplyansky said.

Gelvan is still under investigation by the New York Attorney General’s office.

Sheehan, head of the New York Attorney General’s charities bureau, said Gelvan remains a focus of investigators because of the number of charities he’s associated with that give up 85 percent to 90 percent of the donations his solicitors collect for them.

“You’ve got to work your way up,” Sheehan said when asked why Gelvan wasn’t sanctioned when the attorney general’s office shut down Poplyansky’s nonprofit. "You don’t use sharks to catch minnows.”

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