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John Sandberg and Christina Terraccino, the creators of Hurricane Sandy Relief Foundation (HSRF), also were banned from ever again running a charitable organization related to Sandy and from serving in a leadership position in any charitable organization in New Jersey for at least two years. Their purported charity was also dissolved.
Superior Court Judge Robert Contillo in February banned both from soliciting additional donations and ordered them to preserve the money and items donated.
Financial records show that Sandberg and Terraccino used some of the money to pay off credit cards, to have dinner at Vivo Tapas in Newark (among other restaurants), to buy a Christmas tree, to shop at the Apple online store and for other personal uses, state authorities alleged in bringing a lawsuit against them and the purported charity.
State officials today said they believe the settlement resolving that suit will make roughly $334,000 available for distribution to those in need.
Sandberg, 31, and Terraccino, 27 (above), both of Sparta, agreed earlier this year to place the approximately $631,000 donated to that point and any additional fund that came in afterward into an interest-bearing attorneys’ escrow account. The amount included $13,597 that state officials said Sandberg and Terraccino transferred directly to their own personal accounts.
What’s more, Contillo ordered that remainder of $400,000 in donated items that were stored in a warehouse, as well as unused gift cards, be donated to the Salvation Army.
State authorities accused HSRF and the couple of unlawfully misleading the public by diverting donated funds into their personal accounts. They also misled donors with false claims about the ways donations would be used, falsely claimed that donations were tax-deductible, and “otherwise deceived the public in violation of New Jersey’s charity registration and consumer protection laws,” Acting State Attorney General John J. Hoffman said.
State authorities alleged in the lawsuit that the charity hardly provided the promised “immediate” relief to Sandy victims, distributing only $1,650 in gift cards during the three and a half months of its existence – an amount representing less than one percent of the $631,000 raised.
Under the terms of the final consent judgment and settlement agreement approved by Contillo, the organization administrator will immediately take control of HSRF’s financial accounts and distribute all contributions made to date within five months to registered charitable organizations providing relief to Sandy victims.
Once that’s completed, the administrator will arrange for the shutdown of the HSRF website as well as the dissolution of the organization, under the approved arrangement.
If either Sandberg or Terraccino want to get back into creating a charitable organization, they must first submit a written request to the state Division of Consumer Affairs – and include a certification under oath that they haven’t violated the settlement terms. The DCA would then decide whether to grant them charitable status.
The settlement approved by Contillo also requires Sandberg and Terracino to reimburse the state for $79,195 worth of legal and investigative costs. However, the provision will be suspended in four years if both comply with the settlement terms.
Sandberg and Terraccino said that they’ve complied so far by putting all but $1,650 into their attorney’s escrow account and that no other contributions were applied to their expenses. They also said that they have no in-kind contributions received by or on behalf of HSRF.
The state divisions of Criminal Justice and Consumer Affairs brought the case to Bergen County because Sandberg listed his parents’ home address in Wyckoff as the main business contact when the HSRF was established as a nonprofit on October 31, 2012. A Facebook page used Terracino’s hometown of South Hackensack.
The DCA has registered two dozen new charitable organizations “that have a stated purpose of aiding Superstorm Sandy victims since the storm hit New Jersey at the end of October 2012,” Director Eric Kanefsky said. “Another ten organizations have submitted registration forms that are being processed.”
His department, Kanefsky said, “has been working with organizations that want to help Sandy victims, to assist them in becoming registered and operating in a legal and transparent manner.
“We’ve made registering these organizations a priority, as we stay focused on helping those who remain affected by Sandy’s devastation. Once they are registered, we will closely monitor their activities to make sure they are operating in accordance with the State’s charitable and consumer protection laws.”
The Division of Consumer Affairs, through its “Investigate Before You Donate” campaign, encourages New Jersey consumers to learn as much as possible about any charity before deciding to make a donation:
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. You can obtain information by asking the charity itself (reputable charities encourage you to do so), or by visiting its website.
Consumers can also obtain this information from the state DCA:
CALL: 973-504-6215
CLICK: NJDCA Directory of Registered Charities
OR: Use the Division’s free “New Jersey Charity Search” smartphone app
CLIFFVIEW PILOT broke the original story:
- YOU READ IT HERE FIRST: State authorities have sued the operators of a purported Superstorm Sandy charity who they said steered donations into their personal accounts and stole the name of New Jersey First Lady Mary Pat Christie’s Hurricane Sandy Relief charity to do so. For all of the details, click here to: READ MORE….
John Sandberg, Christina Terraccino
Chief Investigator Laurie Goodman, of the DCA’s Office of Consumer Protection, conducted the investigation. Deputy Attorney General Lorraine Rak, Chief of the Consumer Fraud Prosecution Section, and Deputy Attorney General Kourtney J. A. Knop are representing the state.
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