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Money Watchers: Dangerous donations

NBC 10 Money Watcher Alison Bologna reports that especially after catastrophic events such as Hurricane Sandy, new schemes were created to entice people to donate money to fake charities.

Describing the con men behind a major charitable fraud scheme former District Attorney Rich White said, "These people were greedy, but on top of being greedy, quite frankly they were stupid too."

The scheme involved 450,000 victims across the U.S. and a whopping $10 million.

The scam involved a pitch like this, "Did you know that police officers have to buy their own bullet proof vests and if they can't afford them they just can't get them?"

That is one of the many false claims solicitors for a bogus charity would make to persuade potential donors to hand over money.

"And convince them that the little they had, the little they had to give, was going to do something good and unfortunately the opposite was true," White said.

And postal inspectors said just pennies on the dollar actually went to any charity, the rest of the money went in the pockets of the telemarketers.

"The owners of the company were living large. They had large homes, recreational vehicles, boats, water skis, and jet skis; things like that," said U.S. Postal Inspector Dean Kowalefski.

The experts offer advice to those who are thinking about donating money to charity.

Do not donate money over the phone, unless you are sure you know the charity; instead, ask them to send you something in the mail.

In this case, experts say, if you ask disreputable telemarketers for something in writing, you're not going to get anything.

"They can't tolerate that practice. For them to be successful they need to get the pressure sales they sell someone right then or they are on to the next one."

And some additional advice from the postal inspectors; never donate cash. If you are writing a check be sure to write it out for the name of the organization and never to an individual.

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