Dakota, Ill., Man Charged In Alleged $120,000 Charity Fraud Scheme
ROCKFORD — A Dakota, Ill., man was arrested today on federal mail fraud charges relating to his operation of two purported charities. In an indictment filed yesterday, CLIFFORD J. EDWARDS, JR., 33, formerly of Loves Park, Ill., was charged with 20 counts of mail fraud for allegedly defrauding victims out of more than $120,000 in charitable donations that the victims were told would be used to benefit children with cancer, under-privileged children, and children with cleft palates and facial deformities.
Edwards pleaded not guilty at his arraignment today and was released on his own recognizance. A status hearing was scheduled for Aug. 22 in U.S. District Court in Rockford.
According to the indictment, Edwards established and operated two supposed charitable entities: Helping Out, LLC, also known as “Helping Out,” and the Smiles for Kids Foundation, also known as “Smiles for Kids,” “the Smiles for Kids Foundation, Inc.,” “the Smiles 4 Kids Foundation,” and “Smiles 4 Kids.” Edwards ran these entities from locations in Rockford, Loves Park, and Dakota, Ill. The indictment alleges that Edwards and his agents made telemarketing type phone calls on behalf of Helping Out and Smiles for Kids. During these phone calls, Edwards and his agents solicited donations by claiming that Helping Out and Smiles for Kids provided benefits to children with cancer, under-privileged children, and children with cleft palates and facial deformities. It is further alleged that Edward mailed pledge statements, sponsor confirmations, and return envelopes addressed to Helping Out and Smiles for Kids, to the individuals who agreed to make donations. These individuals then mailed their personal checks back to Helping Out and Smiles for Kids in the return envelopes.
The indictment charges that, instead of using the donated funds to benefit children as promised, Edwards used the funds to pay his own personal expenses and to pay fund-raising costs. According to the indictment, Edwards conducted this fraud from at least June 2010 through June 2013.
Each count of mail fraud carries maximum penalties of 20 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater, a period of supervised release of up to 3 years following imprisonment, and restitution. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines, as well as restitution.
The case was investigated by the United States Postal Inspection Service in Chicago. The investigation was conducted under the auspices of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.
The arrest and indictment were announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Pete Zegarac, Inspector-in-Charge of the Chicago Division of the United States Postal Inspection Service.
Members of the public are reminded that a criminal indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt of the defendant beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorney Scott A. Verseman.