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SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORKANDREW M. CUOMO,Attorney General
of
the State
of
New York,on behalf
of
the People
of
the State
of
New York,Plaintiff,-against lTNITED HOMELESS ORGANIZATION, INC.,STEPHEN RILEY, and MYRA WALKER,Defendants.Index No.
COMPLAINT
Andrew M. Cuomo, Attorney General
of
the State
of
New York, on behalf
of
thePeople
of
the State
of
New York, alleges the following against United HomelessOrganization, Inc., a New York not-for-profit corporation ("UHO"), Stephen Riley,President and Director
ofUHO
("Riley"), and Myra Walker, Secretary and Director
of
UHO ("Walker") (together, "Defendants").
NATURE OF THE CASE
1.
Each day on the streets
of
New York City,
URO
table workers convincesYmpathetic passersby to deposit cash into plastic jugs under the false pretense that theirhard-earned money is going to a bona fide charity that funds services for the homeless.URO is a sham. All
of
the money dropped into the
URO
jugs is pocketed
by
the
URO
table workers, Riley, Walker, and other insiders, or is used
by
Riley and Walker toperpetuate a scheme to defraud the public. Riley and Walker run
URO
in total disregard
of
the legal and fiduciary requirements that bona fide charitable corporations must
follow, resulting in hundreds
of
thousands
of
dollars
of
charitable assets beingunaccounted for or misused annually.
2.
As President, Riley hides behind UHO's facade
of
corporate legitimacyand describes UHO table wotkers
as
"members" ofUHO. Donning UHO-branded hats,identification badges, aprons, and other paraphernalia, UHO table workers mislead thepublic that donated funds will be used for services for the homeless.
3.
The table workers pay Riley and Walker a fixed "fee" for the right to usethe UHO materials and keep the daily cash donations in excess
of
the fee, even thoughthe funds are raised in the name
ofUHO.
4.
Although assets
ofUHO,
Riley and Walker treat the "fees"
as
theirpersonal kitty, dipping into them whenever they choose. In effect, Riley and Walkerhave co-opted a tax-exempt, charitable corporate structure for their own personal benefit.
5.
In order
to
induce cash donations from the public, the table workers makeexaggerated, false, and misleading statements
to
the public about the "services" UHOprovides, including that funds
go
to provide food and clothing, are given to "charities anddifferent churches," and support "pantries," "shelter," and "detox centers." However,UHO does not provide or fund any
of
these services.
6.
Riley and Walker perpetuate their scheme by ensuring that there is
no
functioning board
to
oversee their actions. Riley and Walker are the only directors on
UHO's
board. UHO has not held an election for directors since its incorporation in 1993.Left unchecked, Riley and Walker routinely flout the requirements applicable to not-forprofit corporations.
In
violation
of
their fiduciary duties, Riley and Walker continuouslydisregard laws on charitable solicitation and prohibitions against profit sharing and
-2
private inurement. Riley and Walker improperly distribute UHO cash to themselves,lJHO workers, and other insiders favored
by
Riley and Walker.
7.
Riley and Walker fail to maintain procedures to account for
UHO's
totalrevenues and expenses, fail to maintain financial controls, and fail to keep accurate booksand records as required
by
law. Riley and Walker simply ignore the legal andgovernance requirements charities must observe.
8.
The Attorney General seeks a judgment, among other things: (a) enjoiningUHO, Riley and Walker from soliciting charitable contributions from the public; (b)enjoining Riley and Walker from accessing, using, or distributing UHO assets; (c)holding Riley and Walker liable for their misappropriation and waste
ofUHO
assets; (d)removing Riley and Walker as officers and directors
ofUHO;
(e) enjoining Riley andWalker from serving as.an officer
or
director
ofUHO
or
any other not-for-profitcorporation in the future; (f) dissolving UHO; and (g) granting such other and furtherrelief as the Court deems
just
and proper.
PARTIES
9.
The Attorney General is responsible for overseeing the activities
of
NewYork not-for-profit corporations and the conduct
of
their officers and directors, inaccordance with New York's Not-for-Profit Corporation Law ("N-PCL"), Estates,Powers
&
Trusts Law ("EPTL"), and Executive Law ("Exec. L.").10. The Attorney General maintains offices at 120 Broadway,
New
York,New York.
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UHO Complaint
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