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Charity regulators who solicit crimes and misdemeanors

As readers know, charity regulators are the biggest violators of laws governing charitable solicitation.

What happens when charity regulators ask or demand charities or others to violate the law? That is also known as solicitation, and the offense of solicitation is a serious one.

Here’s a real life example of how charity regulators might be caught soliciting crimes or misdemeanors.

A charity is being investigated by its state’s charity regulator, in this instance, the attorney general. The charity believes it has done nothing wrong, and is cooperating with the investigation even though the attorney general hasn’t stated the probable cause for the investigation.

An employee of the charity works out of state in an office owned and operated by a business. The business owns the computers, papers, forms, reports and other property used by the charity’s employee in the course of her work.

The charity’s employee is a “guest” of the business (in the legal sense), and is given access to certain information, the kind of which is treated as confidential to protect it from competitors of the business and its clients’ competitors.

A deputy attorney general issued a subpoena to the charity’s custodian of records. The deputy attorney general was provided notice that the subpoena fails to state probable cause as required by the Fourth Amendment, and other defects. The deputy AG ignored that notice, and did not cure or fix the subpoena to bring it into compliance with the Fourth Amendment.

The deputy attorney general then asked the charity’s lawyer to depose or interview the charity’s out-of-state employee by phone, and the lawyer consented. There was no subpoena issued for this interview/deposition, but the charity’s lawyer and employee understood that the interview/deposition was requested under color of state law and as part of the investigation of the charity.

In the deposition of the charity’s out-of-state employee, the deputy AG asked the employee to provide information found on the computers that the employee uses, documents, forms, and other information from the business’s office.

In other words, without seeking the consent of the business, the deputy AG asked (actually, demanded) the charity’s employee to take property from the business and transmit that property to the deputy AG.

To remove property without consent of the owner is a form of theft known as larceny.

Just as any charity’s employees may not remove data or property of the charity without consent of the charity, a charity’s employee certainly may not remove property from any business without consent of the business.

Here’s where the violation of law called “solicitation” comes in. When someone asks or demands another person to commit larceny, that is known as solicitation of larceny, and it is every bit as much a violation of law as larceny.

In this example, the solicitation was done under the duress and intimidation of an interview/deposition of the employee, an investigation of the employee’s employer, and the color of state law.

This deputy attorney general seems to have several very serious problems on her hand.

First of all, it seems that what she has done fits the black letter definition of solicitation of larceny. She certainly could be sued by the business. And, if prosecuted and convicted by the state in which the charity’s employee works, that could put her license to practice law in her home state at jeopardy.

Secondly, since the deputy AG was acting in the name of the state Attorney General, that imputes the conduct to the AG.

Thirdly, information gathered in violation of law (in this case, in violation of the Fourth Amendment and the state law of larceny) may not be used against the charity. So the solicitation of larceny, if not violations of the Fourth Amendment, jeopardizes the investigation of the charity. That adds incompetence onto the unlawful conduct in the investigation.

Unless the deputy AG believes that the charity has violated some serious law being investigated, she may want to reach a quick and confidential agreement with the charity, issue just a warning rather than seeking a penalty (if she even has cause to seek a penalty), and slink away into obscurity.

It has been my experience with charity regulators that they frequently use duress and intimidation under color or state law to force registrants to violate laws.

It is important for lawyers representing charities to make sure that investigations of their clients comply with probable cause and other Fourth Amendment requirements.

When charity regulators issue faulty subpoenas or seek to go beyond the scope of the subpoenas, lawyers should make sure that they object and restrict the subpoenas to the persons, time, places and things that are identified in the subpoena. Otherwise, the lawyer could be sued by a third party for aiding the solicitation of larceny, such as a business, where, as in this example, the charity’s employee is a guest.

Just because charity regulators hold their breath, cover their ears and stomp their feet when their own lawbreaking is brought up won’t get lawyers representing charities off the hook.

January 30th, 2012 | Tags: , , | Category: Home

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