NEWARK — Associated Humane Societies Inc., a non-profit animal shelter organization with three locations in New Jersey, has agreed to pay $138,057 and implement more than two dozen specific reforms under a consent order resolving allegations that AHS violated the State’s Consumer Fraud Act and Charitable Registration and Investigation Act, Attorney General Peter C. Harvey and Consumer Affairs Director Kimberly Ricketts announced today.

AHS, the subject of a State Commission of Investigation (SCI) report that was released in March 2003, agreed to no longer employ Lee Bernstein, Alfonso Bergamo and Patrick Jemas, under terms of the consent order with the State. Bernstein, a former Newark City Councilman, was the long-time Executive Director of AHS. Bergamo and Jemas were fund raisers hired by AHS to oversee solicitation of donations from the public.

The SCI report identified several issues related to the operation of AHS, including fund-raising activities and financial reporting and management. Consumer Affairs began its review of AHS following release of the SCI report.

"Our settlement with AHS contains far-reaching reforms that will ensure donations made by the public are properly accounted for and that our reporting requirements for charitable organizations are met," Attorney General Harvey said. "The settlement mandates a two-year monitoring period to ensure AHS is complying with the terms of the consent order and we intend to vigorously scrutinize their ongoing activities."

AHS is believed to be the largest animal shelter operator in New Jersey, with shelters in Newark, Tinton Falls and Lacey Township. AHS also operates veterinarian clinics in Newark and Lacey Township, plus a pet cemetery and a zoo in Lacey Township.

An estimated 15,000 animals, mostly cats and dogs, are entrusted to the care of AHS each year. AHS received over $4 million in public donations in 2003, according to information it filed with Consumer Affairs.

"The consent order requires AHS to take actions that will ensure donations are properly solicited, deposited and accounted for. The public expects nothing less each time a resident donates hard-earned money to a charitable organization and we will hold AHS accountable if any terms of this agreement are violated," Director Ricketts noted.

Under terms of the consent order, AHS agreed to:

• Not engage in any unfair or deceptive acts or practices in violation of the State’s Consumer Fraud Act and Charities Registration and Investigation Act;
• Not use the State seal or otherwise simulate a government agency;
• Not reimburse any person for credit card purchases made for merchandise that does not benefit the charitable purpose of AHS;
• Not represent that an animal will be euthanized and then fail to do so;
• Ensure that every consumer who purchases a Special Cremation Service receives the cremated remains of the deceased animal;
• Not maintain, collect, distribute or apply contributions made to a restricted donation in any way contrary to the terms of the restricted donation;
• Not advertise a program as a restricted donation program if such is not the case;
• Comply with all terms of any restricted donation;
• Segregate or differentiate in its records the funds received for each restricted donation to ensure such funds are used for their restricted purpose;
• Maintain complete and accurate records of its fund raising activities;
• Maintain complete and accurate record of its activities and make such records available to the Attorney General upon demand;
• Maintain financial records in accordance with Generally Accepted Accounting Principles;
• File with the Attorney General all required registration statements;
• Ensure that all information in the registration statement and other filings is truthful;
• Enter into a contract with all independent paid fund raisers;
• File a copy of any contract with an independent paid fund raiser with the Attorney General;
• Ensure than any independent fund raiser that it contracts with is registered with the State;
• Report all gross contributions received by an independent paid fund raiser but not remitted to AHS;
• Maintain an account at a bank or financial institution into which contributions will be deposited;
• Ensure that each independent paid fund raiser deposits all contributions received for AHS’ benefit into an account maintained on AHS’ behalf;
• Ensure that each independent paid fund raiser deposits all contributions within the required time period;
• Obtain from each independent paid fund raiser an accounting of funds collected through canister collections;
• Enter into a contract with each commercial co-venturer.
• Ensure that each independent paid fund raiser and commercial co-venturer maintains complete and accurate records of its fund-raising activities on behalf of AHS;
• Cooperate with any inquiry, inspection or investigation conducted by Consumer Affairs of any independent paid fund raiser or commercial co-venturer.

The consent order further states that AHS is required to destroy all badges and other forms of identification that simulate the State seal. Internal controls to prevent unauthorized alteration of records, as well as written policies and procedures governing internal accounting controls of expenditures, must be developed and implemented within 45 days.

Deputy Attorney General Brian M. Brennan represented the State in this matter.

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