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December 08. 2012 8:46PM

CMRK settled suit for $140,000 after allegations of deception

The Massachusetts company using MADD's logo to collect donated items in New Hampshire has been in trouble in another state for its role in collecting charitable donations.

In 2004, CMRK Inc. and its principal officer, Fawaz El Khoury, agreed to pay $140,000 to settle a lawsuit brought by enforcement agencies in Connecticut that alleged the company had engaged in deceptive and unfair trade practices. (See related story, Page A5.)

According to court documents, a now-defunct company called Holy Trinity Community Centers had been soliciting clothing donations through drop boxes in Connecticut, claiming the proceeds would benefit breast cancer charities and MADD.

The state alleged that from 1999 to April 2001, the donated clothing instead "was sold almost exclusively" to CMRK. During that period, HTCC "sold over 16 million pounds of clothing to CMRK and realized over $2 million in revenues, before expenses," court documents state.

The state also alleged that CMRK paid "kickbacks" to HTCC's managing director - and sole member - for his personal use. In so doing, "CMRK and/or El Khoury diverted over one-half million dollars of charitable proceeds," court documents state.

According to a 2005 news release about the settlement from then-Attorney General Richard Blumenthal (now a U.S. senator), "CMRK paid Holy Trinity for the clothing and sold it for profit to Third World countries. Little to none of the proceeds went to breast cancer charities."

The settlement money CMRK paid was donated to charities, including MADD, according to that news release. "Holy Trinity and CMRK perversely profited from donations meant for breast cancer charities," Blumenthal said. "Holy Trinity failed to honor its charitable purpose, so we did it for them."

Asked about that Connecticut enforcement action against CMRK, MADD's director of communications, Anna Duerr, said it is the organization's understanding that "any past issues CMRK may have had with the Connecticut attorney general were resolved."

But given that history, she added, "we'll certainly be paying close attention to the issue."

El Khoury did not respond to voicemail messages left at CMRK's office in Northborough, Mass.

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Shawne Wickham may be reached at swickham@unionleader.com.



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