A 'charity' it wasn't, lawsuit says about business

The outfit repaired and resold donated vehicles, but the proceeds didn't seem to help any charities, the suit alleges.

By Mary Jane Smetanka, Star Tribune

Last update: August 22, 2007 - 9:30 PM

A Fridley "charity" that claimed to benefit veterans, the elderly and the needy was a front for a for-profit auto repair and sales business, the state attorney general's office alleged in a lawsuit filed Wednesday in Hennepin County District Court.

The lawsuit charges ABC Humanitarian Trust and its director with violations of laws governing charities, including solicitation fraud, false advertisement and deceptive trade practices.

ABC solicited vehicle donations for at least two years until this June, saying donated vehicles, or proceeds from sale of those vehicles, would benefit the needy. One newspaper ad hinted at a connection with the United Way.

But donated vehicles were repaired and resold or sold for scrap, according to the suit.

At one point, the suit says, ABC was receiving vehicles "on an almost daily basis." More than $137,000 was deposited into the group's bank accounts, but the only charitable activity the group could document to the state was a $30 gift card to Rainbow Foods and $25 at a Wal-Mart store spent "for someone who needed food," the suit says.

The trust's director, Sandra V. Belisle, told state officials that she could not provide more proof of charitable activity because a briefcase containing ABC records was stolen in a February armed robbery. But the suit says that when Belisle filed a police report about the robbery, she only reported her purse stolen.

The suit says that Belisle, 62, of New Brighton, withdrew $52,000 in cash from ABC's accounts. She could not be reached for comment. ABC's phone bounced to a full voice-mailbox.

Between May 2006 and this June, ABC was located at the site of a former auto parts store at 3650 Stinson Blvd. The state alleges that ABC ran the repair business there and continued to solicit donations. Mechanics and vendors were paid in cash. Belisle and a partner later started a for-profit auto service store on the same site, but soon fell behind on mortgage payments.

In January, Belisle placed a newspaper ad saying, "Investor wanted ASAP." A Mounds View man responded. According to the suit, he was attracted partly because Belisle told him ABC helped the needy. He provided the store with $50,000 in cash and applied for a $50,000 line of credit to be used for ABC. Belisle apparently used some of that investment to partly catch up on mortgage payments.

The investor, who said Wednesday he didn't want to comment, also worked at the business for a while. The suit says he was never paid and never received any of his investment back.

ABC vacated the Fridley property at the end of June, still owing money on its mortgage.

Mary Jane Smetanka • 612-673-7380

Mary Jane Smetanka • smetan@startribune.com

Recent Local + Metro stories

MCcain's read on 'going rogue' - August 22, 2007

MCcain's read on 'going rogue' - Sen. John McCain said Saturday that he enjoyed reading running mate Sarah Palin's new memoir and downplayed any tension between their campaign aides as "no big deal." More