Illinois AG: Shady AIDS Charity’s Web Campaign Broke State Law

Four months after we first reported on a sketchy AIDS "charity" with a nationwide fundraising campaign,
authorities have begun to crack down. But the move might not have much
impact if other officials don't follow suit.

The Illinois attorney general alleged in a lawsuit Thursday that the Center for AIDS Prevention
solicited donations illegally and falsified official documents. The
group's fundraising campaign has featured ads on the Web sites of the New York Times, the Chicago Tribune, the Los Angeles Times and others for months, drawing attention to the charity's shady practices.

In March, we noted that the group promoted false health information and ineffective herbal remedies, misled potential donors with claims about its battle to "stop
AIDS," and repeatedly failed to provide a full accounting of how it
spends contributions. Its financial records show no expenses, and there
is no evidence that it has provided any services to people with AIDS,
its stated mission.

Then, in June, we reported that public officials at all levels of government — including the
Illinois attorney general and officials in California, where the
charity now operates — did not effectively follow up on complaints and
their own suspicions. Their inaction, which allowed the charity to
continue its aggressive fundraising, highlighted the fragmented, often
ineffective oversight of nonprofits.

The charges from Illinois attorney general, which arose from a citizen's
complaint, attempt to close the loop. However, if California
authorities don't also act on the Illinois charges, which concern the
center's fundraising and corporate status only in that state, the
lawsuit could further underscore the problems of charity oversight.

after the group first formed in Chicago in 1987, authorities discovered
that its director, Steve Neely, also known as Morrell S. Neely, had lied on Illinois charity registration forms. They banned the center from fundraising in the state and revoked its charitable status. The new charges, filed in Cook County Circuit Court, allege that the advertisements in the Chicago Tribune and elsewhere violated that restriction, and separately, that
Neely also lied on more recent forms he signed under penalty of perjury.

the suit is successful, Illinois could seize money illegally raised
there, bar Neely and others involved with the center from future
charitable work in the state, freeze their assets, force them to pay
back donations they may have “misused and/or wasted” with interest, and
attempt to shut the group down for good by revoking its corporate

But the center's fundraising campaign has sought a
national audience, and it's now based in California, where Neely moved
at least two years ago, according to Illinois’ lawsuit, meaning many of
the group's activities may be out of reach for the Illinois court.

month, a spokesman for the California attorney general told us, "If a
charity's corporate status is revoked in another state but the charity
is still doing business in California, it is still required to comply
with our charity registration and reporting requirements.”

center appears not to have complied with California's requirements so
far, but has continued raising money with apparent impunity. Its
charitable registration there – the legal requirement for soliciting
funds – is still "pending," according to the state's registry of
charities. The center nevertheless solicited money from Californians
with ads in the Los Angeles Times in June.

we called back Monday, the spokesman said: "We are aware of what
Illinois is doing. We're not going to comment on whether or not we've
launched an investigation."

In addition to the allegations of
unlawful fundraising, the Illinois attorney general's charges say the
center "obtained its certificate of incorporation through fraud." After
the center lost its charitable status in the late 1980s, it was dormant
until 2007, according to an earlier interview with Neely and the court
documents. When Neely reinstated the center with the Illinois secretary
of state, he listed an Illinois office address at 4750 N. Broadway in
Chicago. The new charges say the center has never maintained an office

Phone calls to the center were not answered, and an
e-mail was not immediately returned. The Cook County assessor's office
has no property records on file for the address.

We spoke to a
few Chicagoans who have attempted to visit the center's Illinois office
after reading our earlier reports. They said no building displays that
street number. The only establishments on the block are a Bank of
America, a concert venue called the Riviera Theater, and a liquor store
with apartments above it.

Christopher Weaver is a reporter for the ProPublica news organization, which first published this post.