The Raw Greenwich News Feed....
A Charity Fails Families Of Fallen Firefighters After 9/11
Hartford Courant
On a mild day in late November 2001, Stephen Careaga stood under the brick facade of a storied New York fire station, an unlikely benefactor from the Pacific Northwest who traveled to Manhattan with a cashier's check for nearly $4 million.
Three miles downtown, workers were still recovering the bodies of firefighters entombed in the twisted wreckage of the World Trade Center, and the New York Fire Department's hastily assembled funeral desk was scheduling the last few dozen memorials for the 343 firefighters killed on 9/11.
Careaga, a one-time volunteer firefighter and reserve police officer, had been trying to make money selling computer software to rural fire departments in Washington state. To get a foot in the door, he created a tiny nonprofit called FireDonations, with a website that would-be customers could use to collect online donations for fallen firefighters.
That was in August 2001.
A month later, when jumbo jets plowed into the World Trade Center towers and hundreds of firefighters trudged up the stairs to their deaths, Fire-Donations was the only fire-services charity on the Internet equipped to take online contributions for the cause.
Boosted by links on Yahoo and other national websites, money poured in from around the globe, peaking at a rate of $250,000 an hour. The nonprofit, hastily registered with the IRS and renamed Firefighters National Trust, collected $4 million in a week's time, and $6 million by the end of September.
In all, donors contributed $11 million to Firefighters National Trust, which promised that the money would go "directly to the spouses and children of the New York Firefighters and Rescue workers who lost their lives in the World Trade Center tragedy."
... show. In the charity's final act, Careaga transferred the $2 million still in the bank to a psychologist in Greenwich who had set up a nonprofit counseling service after a federal fraud case cut off his access to lucrative Medicare reimbursements.
Soon afterward, tax records show, that Greenwich nonprofit paid $150,000 to a consulting company Careaga had set up out of his house. Careaga acknowledges being paid by the charity, but says he can't recall specifically what he did or for how long he worked....
...Careaga took a $125,000 salary, while his No. 2 official received $100,000 a year. The charity also ran up large legal bills -- nearly all of which went to the Otto Law Group, led by the charity's secretary, David M. Otto, who was also the lawyer for Civil Communications.
Overall, Firefighters National Trust paid Otto's firm $400,000.There were laptops and BlackBerrys and airport lounge memberships for the charity's officers. In time, there were $10,000-a-month marketing deals ....
...There also were allegations of misspending, including airline tickets, expensive meals and other perks for the spouses of charity officials. Eighteen days after the terrorist attacks, according to a lawsuit filed by a former employee, charity funds were used to pay a $695 bill at Le Salon Paul Morey Spa in Seattle for Careaga's wife and the wives of two associates...
ONE LAST DONATION
...the beginning of 2005, the fundraising was over and Careaga made plans to shut down the charity and transfer all remaining funds -- more than $1.9 million -- to Life Matters, a Greenwich charity run by husband-and-wife psychologists Michael Lonski and Evelyn Llewellyn that provided psychological counseling to firefighters.But the money flowed both ways.
While Careaga was working to send the leftover cash to Life Matters, he was also negotiating to have the charity hire a company he had recently created out of his home, called CDF Consulting. Within the year, Life Matters sent $150,000 to CDF Consulting.Careaga defended the payment.
"There was a significant amount of knowledge that needed to be transferred, and Life Matters felt it was in their best interest to get that knowledge and to have some assistance setting up some programs, so that's what I did," he said in a recent interview.
Careaga initially said he helped develop a counseling program, a post-traumatic stress program and scholarship programs, though he later acknowledged that LifeMatters has no scholarship program.
"You might want to talk to them specifically about the programs," he said, "because it's been quite a few years and I don't really recall off the top of my head what the programs were."
Peter Chavkin, a lawyer speaking for Life Matters and Lonski, said Careaga was not hired to help the charity develop counseling programs, but rather to help find new sources of funding, as well as identify additional firehouses and other sites that might benefit from Life Matters' services.
He said Life Matters retained Careaga's company for two years, but terminated the arrangement after a year because it was dissatisfied with Careaga's work......
...... suggest exploring the possibility that any individuals currently associated with the Firefighters National Trust may personally benefit from a transfer to Life Matters," Jeffrey T. Even, an assistant attorney general, wrote in a January 2005 letter to Tracy Shier, one of the lawyers in Otto's law firm.
Shier, who was later disbarred in an unrelated matter, assured regulators that the transfer was clean, and Even sent another letter approving the plan "based on your representations that the distribution of assets is not conditioned upon any agreement to provide employment or any other financial arrangements to benefit any officer or director" of Firefighters National Trust....
...Chavkin, the lawyer for Life Matters, said the paperwork committing the $1.9 million from Firefighters National Trust was completed before Life Matters had finalized its consulting deal with Careaga."
My clear impression from Mike [Lonski] and from the lawyer that handled this is that on Mike and Life Matters' side of things, there was no link between the distribution of moneys and the ultimate retention for one year of CDF," Chavkin said. "And Mike had been told that the attorney general's concern was only that the two not be linked as a quid pro quo."
Lonski and Llewellyn created Life Matters in April 2002, at the same time federal investigators were probing millions in questionable Medicare claims made by Lonski and his private practice, L & L Psychological Services. In October 2002, Lonski and L&L agreed to pay $4 million to settle allegations that they had bilked the federal government by filing false claims in the 1990s.
According to a civil complaint filed by the Justice Department, Lonski submitted bills to Medicare for as many as 106 diagnostic exams for the same patient, and for performing as many as 67 diagnostic exams in a single day. The complaint also alleged that Lonski charged Medicare for services provided to relatives, claimed movie screenings as "group therapy" and then billed the government for as many as 75 clients who watched the movies, and charged for specialized psychological services that were never delivered.
...Careaga said he was introduced to Lonski by New York firefighters who had high regard for the Greenwich couple's programs. In late 2003, Firefighters National Trust began sending money to Life Matters to pay for grief counseling and training, and grants to the Greenwich charity topped $700,000 by the end of 2004 -- accounting for nearly half of Life Matters' income.
Bolstered by the funding, Lonski and Llewellyn paid themselves more than $480,000 in 2004, and an average of about $360,000 in the following two years. Lonski is still paying off his debt to the federal government -- and still counseling those affected by 9/11; on Friday, Chavkin said, Lonski was working at the World Trade Center site....
FIREFIGHTERS AND OTHER DISGUSTED
INDIVIDUALS MAY USE THESE CONTACTS
FOR MORE INFORMATION:
Dr. Michael Lonski,
Co-Founder, Director of Training and Program Development
Life Matters, Inc.
112 Shore Road, Old Greenwich, CT 06870
Or
Michael Lonski
51 Forest Ave
Old Greenwich, Connecticut, ct
(203) 698-0725
Or
And Remember Your Help Is Appreciated
Life Matters isregistered in NY and CT, if you are from these states, you may contribute to our mission by completing a
simple form and sending this along with payment to:
Life Matters, Inc.3 New York Plaza, Suite 1401New York, NY 10004-2442
If you are from other regions and wish to learn more about us, please contact us.
Life Matters is a 501(c)(3) organization and contributions are tax-deductible as directed by law. A copy of Life Matters' latest annual report may be obtained upon request from the organization or from the New York State Attorney General's Charities Bureau, Attn: FOIL Officer, 120 Broadway, New York, NY 10271 or State of CT, Department of Consumer Protection, Public Charities Unit, c/o Office of the Attorney General, 55 Elm Street, P.O. Box 120, Hartford, CT 06141-0120.
While You Are At It:
From The Good Folks At Life Matters
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