Arizona brothers charged in $50M PAC scam to rip off donors

Posted at 7:04 PM, May 17, 2018
and last updated 2018-05-18 01:17:29-04

Two Arizona brothers fooled donors nationwide into giving more than $50 million during the last decade to at least nine political action committees that posed as advocates for such causes as autism and law enforcement but were really bogus, authorities said Thursday.

"We refer to these organizations as scam-PACs. They were PACs in name only. In reality, they were scams," U.S. Attorney Geoffrey Berman said as he described the business entities allegedly created by William and Robert Tierney in Gilbert, Arizona.

The men are in custody. They awaited court appearances after authorities cited court documents showing they collected $23 million of the total between 2014 and 2017, mostly in small donations of less than $200. Defense lawyers did not immediately respond to requests for comment.

Berman said during a telephone conference call with reporters that bogus PACs are a "growing problem" and an outgrowth of "consumer fraud schemes hiding in the tall grass of our political system."

He said the Tierney brothers forwarded less than 1 percent of what they raised to causes for which they collected money after telemarketing centers solicited funds ostensibly for the anti-abortion movement, law enforcement, autism awareness and other causes.

The prosecutor said more than 8,000 PACs collected over $4 billion in funding during the 2016 election cycle, accounting for more than half of all political donations.

"Our investigation continues," he said. "It's an important area."

Berman said the Tierney brothers spent 85 cents on every dollar received on the apparatus used to collect money, including shell companies and telemarketing centers. Another 14 cents of every dollar went into their pockets, amounting to more than $3.5 million, he said.

Authorities said the men also used fake identities to raise money and avoided press coverage of the fundraising efforts even though the PACs claimed in their solicitation materials that they were raising money for national advocacy and awareness campaigns.

Claire Garrison from California is a victim who donated $100 to one of the Tierney's phony PACS, the Grassroots Awareness PAC, which claimed to be advocate for Americans with Autism.

"It's irritating," said Garrison. "It's very irritating. You think you're giving to a legitimate organization."

It's also irritating for real nonprofits like Southwest Autism Research and Resource Center, that help kids and adults with Autism.
"When you see these scams, it's challenging," said SARRC President Daniel Openden. "I think what scares us, is that we don't want people to become skeptical about giving to nonprofits in general."

Openden says scammers going after an issue like Autism makes sense because one in 59 kids is affected by it. 

"We know that almost everybody is somehow touched or connected by somebody with Autism, so who wouldn't want to help these kids," said Openden. 

Through the crime, Openden tries to focus on the good. 

"I hate that these people have been taken advantage of, but it does say something positive about the community that we live in," said Openden. "That people want to be helpful and supportive of causes they care about."

William F. Sweeney Jr., head of New York's FBI office, said the PAC scams "capitalized on the sympathy and activism of those who sought to support awareness of various causes near and dear to their hearts."

He said, "virtually none of the money raised was used for its intended purpose, and the so-called political action committees served as nothing more than a front for an extensive personal fundraising campaign."

William Tierney, 46, and Robert Tierney, 40, were each charged with wire fraud conspiracy, mail fraud conspiracy, conspiracy to commit money laundering and conspiracy to engage in a monetary transaction in property derived from the specified unlawful activity.

The nine fake PAC's that the Tierney's supposedly donated to are the following:

  • Grassroots Awareness PAC
  • Americans for Law Enforcement PAC
  • National Campaign PAC
  • Voter Education PAC
  • Action Coalition PAC
  • Protect our Future PAC
  • Life and Liberty PAC
  • Republican Majority PAC
  • PAC