Prosecution of crowd-funding scam near Philadelphia raises questions about dubious cash grabs involving Missouri lawyers Jason Kander and David Shuler

Legal Schnauzer

The memory of a beloved pet inspires one couple's fight against injustice.
Original post: https://legalschnauzer.blogspot.com/2018/12/prosecution-of-crowd-funding-scam-near.html

Wednesday, December 26, 2018

Prosecution of crowd-funding scam near Philadelphia raises questions about dubious cash grabs involving Missouri lawyers Jason Kander and David Shuler

Jason and Diana Kander

Crowdfunding scams have become a regular topic for our reporting at Legal Schnauzer,and such a story even was in the news over the Christmas holiday. We have reported on two such incidents where we currently live (in Missouri) -- both involving lawyers, surprise, surprise -- with no signs that authorities have taken note. Recent events in the Philadelphia area, however, suggest using sites like GoFundMe (GFM) and Kickstarter to fraudulently relieve donors of their money might not be such a hot idea.

How far will crowdfunding go? Donald Trump supporters have started several sites to raise money for a border wall with Mexico, and one such site reportedly has raised more than $14 million. That's a long way from the $5 billion Trump is seeking from Congress, but where will that crowdfunding cash actually go? The possibilities for fraud seem endless.

Authorities near Philadelphia have made it clear they will go after those who perpetrate such scams. We intend to notify the appropriate Web sites and law-enforcement authorities about stories of which we are aware in Missouri. We will keep you posted about determinations law-and-order types in the Midwest make on these matters.

Folks in and around Mount Holly, New Jersey, have reason to know crowd-funding scams are taken seriously in their neck of the woods. That's where a couple -- Johnny Bobbitt and Katelyn McClure -- allegedly schemed with a homeless veteran from Philadelphia, Mark D'Amico, to scam donors out of more than $400,000.  GoFundMe announced on Christmas Day that it has refunded everyone who contributed to the campaign. From a report at Associated Press:

GoFundMe spokesman Bobby Whithorne said Tuesday that "all donors who contributed to this GoFundMe campaign have been fully refunded" and the organization is cooperating fully with law enforcement. . . .

Whithorne said campaigns involving misuse "make up less than one tenth of one percent" of all GoFundMe campaigns, but such behavior "is unacceptable" and "has consequences."

"We have a zero tolerance policy for fraudulent behavior," he said. "If fraud occurs, donors get refunded and we work with law enforcement officials to recover the money."

What about consequences in the Philadelphia case? Here is more from AP:

Burlington County prosecutors allege in a criminal complaint that Johnny Bobbitt conspired with Katelyn McClure and her boyfriend at the time, Mark D'Amico, to concoct a feel-good story about Bobbitt giving McClure his last $20 when her car ran out of gas. They raised $400,000, which authorities say was spent on luxury items and casino trips.

What about apparently underhanded crowdfunding cases in Missouri? One involves former secretary of state and U.S. Senate candidate Jason Kander and his wife -- New York Timesbest-selling author Diana Kander. From an October 2016 post about information released from a watchdog group in a 127-page, heavily research document called The Kander Memo:

Beginning in spring 2014, evidence shows the Kanders operated an Internet "crowdfunding" effort to raise online charitable donations. But the memo alleges the Kanders used the money, more than $31,000, to buy new-author Diana Kander's way onto The New York Times bestseller list. In fact, amazon.com promotes Ms. Kander's book, All In Startup: Launching a New Idea When Everything Is On the Line, as part of the prestigious New York Times lists, and the book is promoted as such at the author's Web site, dianakander.com.

How did this benefit the Kanders and Jason Kander's U.S. Senate campaign. From The Kander Memo:

The success of the Kander scheme has: (1) Provided the Kanders with a ruse to represent to the American public and Missouri voters that Diana Kander is "a New York Times Bestselling Author," when the truth is the Kanders used a deceptive scheme to raise money from the public in order to help Diana Kander buy her way onto those prestigious bestseller lists; (2) Empowered Diana Kander to break into the lucrative U.S. "Public-Speakers Circuit" so she can now pocket substantial speaker fees as a purported "New York TimesBestselling Author"; and (3) Enabled the Kanders to use the public contributions they collected from their Internet "crowdfunding" campaign in order to make the Kanders look . . . more prestigious and more accomplished, and to help Jason Kander win election to the United States Senate.

Jason Kander lost his U.S. Senate race to incumbent Roy Blunt, but questions remain about the Kanders' deceptive use of crowd-funding. From our earlier post:

According to The Kander Memo, the book effort likely violated solicitation-registration and felony anti-fraud statutes in every U.S. jurisdiction -- federal and state. It also likely violated statutes in all 50 states that make it a crime to commit, or attempt to commit, theft by deceit. From the memo:

[This] is not only an audacious and shameless scheme, it is a patently criminal scheme . . . a "50-state crime spree."

What about the second story of dubious crowdfunding in Missouri? It involves my brother, Missouri lawyer David Shuler. We first reported on it in an Oct. 3, 2017, post titled "My lawyer-brother and his wife, owners of more than $1 million in real estate, seek funds to help cover costs of therapy for their son with Hurler syndrome":

A Missouri couple who own more than $1 million in real estate have established a GoFundMe (GFM) site seeking money for their disabled son's therapy.

The couple are Gina Hayes and David Neal Shuler, my sister-in-law and lawyer/brother. Is it proper for a couple of such wealth to seek crowd-sourcing funds, especially for their own family needs -- which public records indicate they clearly can pay on their own? I'm hardly an expert on the rules, regulations, and etiquette of crowd-sourcing, so I have a few questions:

Gina and David Shuler

 * Is GFM meant to directly assist people who own more than $1 million in real estate -- and that doesn't reach their total net worth, which likely includes cash, savings, investments, personal property, real property in other counties or states (the $1 million is just in Greene County, MO), and other assets. Gina and David Shuler might be millionaires several times over. Are they supposed to be directly benefiting from GFM?

* Could this be unlawful, even fraud? I'm familiar with a site called GoFraudMe, which apparently researches possible incidents of crowd-sourcing fraud. Is this somethingGoFraudMe should look into?

Here is perhaps the central question in the Shuler situation:

Most of the cases of fraud that I've read about involve a precipitating event that did not really occur. For example, someone claims to need funds to recover from a house fire, but the fire did not happen. Is it fraud for a couple to seek money for an issue they clearly can cover on their own -- probably with no hardship whatsoever on the family?

The issue for Gina and David Shuler is real. Their 15-year-old son, Jack, hasHurler syndrome, a vicious metabolic disease, which can effect almost every organ system of the body. . . . 

The GFM page, of course, makes no mention that Jack's parents are millionaires. Should it? Should a campaign like this even be on GoFundMe?

We will let officials with GFM and law enforcement ponder those questions. By satute, Missouri has an offense called "stealing by deceit." Facts of the Shuler case suggest it might come under that statute, with the key questions: Does this constitute deceit? Is it deceit to advertise that you need money when you really don't -- even though the cause in question (an illness) is real?

This is from a followup post, titled "David and Gina Shuler, who own more than $1.161 million in Missouri real estate, are seeking financial assistance for their son's therapy onGoFundMe": The post includes a listing of the Shulers' real-estate holdings, and the list might not be complete:

Is it OK for wealthy people to seek crowd-sourcing funds for their own family needs, which public records indicate they easily could pay for themselves . . . ?

Different people might answer the question in different ways. But the individual who tipped me off to the story -- I call that person a Source Close to the Situation (SCTS) -- had strong feelings on the matter, and they were not favorable to Gina and David. Said SCTS:

Here's my bitch of the day. Gina and David are on gofundme raising money for rehab for Jack. Now i feel sympathy for Jack, but gina and david don't need any sort of financial assistance. what does david make a year? $250,000??? or more. Gina probably made $100,000 before she retired [as an air-traffic controller]. my god they live in Millwood in a house appraised at $634,000. disgusting.

people like them don't deserve any help with medical bills when so many are suffering with no help. outrageous. arrogant. privileged.

I added my two cents on the issue:

It didn't take me long to decide I agreed with SCTS. In fact, I could even add a few descriptive terms to describe David and Gina's actions -- "shameless," "tasteless," "conniving," "self-centered," "attention-seeking."

My understanding is that David and Gina have not let much cramp their style. They have taken vacations to California, Utah, and various parts of Europe, family members have told me.

How wealthy are these folks who claim on GFM to need money? As SCTS notes, they live in Millwood, a golf-course/tennis club community southeast of Springfield, MO. Their residence, 3825 San Poppi Ct., is listed as being in Ozark, MO. Greene County property records show the residence is appraised at $621,300, so SCTS was almost right on the nose.

That figure, however, does not reflect the house's actual market value. It has 4 bedrooms. 4.5 baths, 5,557 square feet, and Zillow puts the market value at $718, 345.

The residence is only the beginning of Gina and David Shuler's real-estate holdings. They own seven properties in Greene County, Missouri, totaling more than $1 million. The exact appraised total is $1,161,500. A reasonable estimate of the market value is $1.3 million.

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Roger Shuler: Alabama Ethics Commission, led by Republican racist Frank "Butch" Ellis of Shelby County, gives AG Steve Marshall a free pass on unlawful campaign donation

Legal Schnauzer

The memory of a beloved pet inspires one couple's fight against injustice.

Thursday, December 20, 2018

Alabama Ethics Commission, led by Republican racist Frank "Butch" Ellis of Shelby County, gives AG Steve Marshall a free pass on unlawful campaign donation

Steve Marshall and "Luv Guv" Robert Bentley

The Alabama Ethics Commission yesterday voted to give Attorney General Steve Marshall a free pass for accepting more than $700,000 in unlawful campaign contributions from the Republican Attorneys General Association (RAGA). In what should be a surprise to no one, the vote largely was engineered by Frank C. "Butch" Ellis, a commissioner from Shelby County, which widely is considered the most Republican, crooked, and racist county in Alabama.

From a report at al.com:

The Alabama Ethics Commission voted 3-2 today that there was insufficient evidence that Attorney General Steve Marshall violated the state campaign finance law.

Former Attorney General Troy King had filed the complaint and was at today’s meeting but left before the vote was taken.

King had alleged that Marshall’s campaign contributions from the Republican Attorneys General Association violated the state campaign finance law. Marshall has said the contributions were legal. King filed the complaint in July, while he and Marshall were engaged in a runoff campaign for the Republican nomination for attorney general. Marshall won the runoff and went on to win the general election over Joe Siegelman.

USA Today brought national attention to the RAGA donation in an article published on Nov. 5, the day before the midterm elections. How outrageous is the Alabama Ethics Commission's conduct in the Marshall matter. As we showed in a Dec. 5 post, it did not just start getting nutty with yesterday's vote:

Marshall, appointed AG in February 2017 before scandal-plagued governor Robert Bentley left office, defeated Democrat Joseph Siegelman in the November midterms despite national reports that he had accepted $735,000 from the Republican Attorneys General Association (RAGA), which officials from both parties said violated Alabama law.

The Alabama Ethics Commission failed to resolve the issue before the Nov. 6 election, so complaints are pending, both with the ethics commission and the Montgomery County district attorney's office. Before the election, Siegelman noted that Marshall could be forced from office if the ethics commission applied state law properly.

Was there serious doubt the donation violated Alabama ethics law? Consider these words from Bill Britt, publisher of Alabama Political Reporter (APR), written on Oct. 11 about Marshall's cozy relationship with 3M, a major polluter in Alabama:

RAGA is not registered with the state and commingles its funds with other political action committees, masking the donors contrary to Alabama law. Ethics Commission Executive Director Tom Albritton knows Marshall’s contributions were unlawful, so does Secretary of State John Merrill, but no one is willing to act. Even Marshall himself is on the record saying the type of contributions he received from RAGA are illegal and banning such contributions was, “the only legal protection standing between Alabama voters and the reality or appearance of quid pro quo corruption.”

Troy King

 Perhaps the larger question for the Commission and the Alabama Republican Party is should a candidate who willingly takes illegal campaign contributions be allowed to remain on the ballot? . . .

The right remedy in the Marshall situation lies with the Alabama Republican Party, which is responsible for pursuing such violations and taking appropriate action, but the so-called party of law and order has taken a pass on the Marshall fiasco, choosing to remain silent.

So, even Republicans know the RAGA donations are unlawful, but Marshall is a favorite of the Mike Hubbard-Robert Bentley-Bob Riley wing of the party -- as evidenced by his recent firing of special-prosecutions chief Matt Hart. Does anyone expect that crowd to take ethics violations seriously?

APR reported yesterday that Troy King received notice of the hearing less than 24 hours in advance, and he was the primary complainant. That was a sign the fix was in.

Butch Ellis proved to be the fixer, a role with which he is quite familiar from his years of turning Shelby County into a racist, ethical sewer. How racist? Butch Ellis played a central role in a U.S. Supreme Court decision that overturned a key provision of the Voting Rights Act. Butch Ellis' father, Handy Ellis, joined with notorious Birmingham Safety Commissioner Bull Connor to lead a walkout of Alabama delegates at the 1948 Democratic Convention. The issue of contention? Civil rights, primarily for black Americans:

Butch Ellis’s father was Handy Ellis, a former lieutenant governor and the chairman of the Alabama delegation at the 1948 Democratic National Convention in Philadelphia.

With Birmingham Commissioner of Safety Bull Connor, Ellis led the Dixiecrat walkout of the convention after declaring that Alabama delegates were instructed “never to cast their vote for any candidate associated with a civil rights program such as adopted by this convention.”

Bottom line: Butch Ellis is the son of a prominent Dixiecrat, meaning he has been a thinly veiled white supremacist for much of his life. At yesterday's Ethics Commission meeting, Ellis stood up for the white elites who want a do-nothing AG like Steve Marshall, so they can keep Alabama as one of the most corrupt states in the nation. From al.com:

The commission heard a number of other cases behind closed doors today. After the commission reopened the meeting, Commissioner Butch Ellis made a motion that there was insufficient evidence that Marshall violated the state campaign finance law. Commissioner Beverlye Brady offered a substitute motion saying there were “ample facts” to show that Marshall had violated the law.

Butch Ellis

Brady’s motion was rejected on a 3-2 vote. Brady and Commissioner Charles Price voted for it. Voting no were Ellis, Commissioner John Plunk and Commission Chairman Jerry Fielding. The commission then voted to approve the Ellis motion on insufficient evidence on an identical 3-2 vote. That closed the case.

The Ethics Commission determines whether there is probable cause that the law was broken. Had Brady’s vote prevailed, the case would have been referred to a district attorney.

Brady and Fielding declined to comment on the case after the meeting ended.

Brady and Fielding probably could not comment because they were trying not to puke.

As noted above, complaints regarding the RAGA donation remain with Montgomery County District Attorney Daryl Bailey. Attorneys Julian McPhillips and Melissa Isaak apparently filed the complaint with Bailey's office because they expected a sham ruling from the Alabama Ethics Commission.

If that was the case, McPhillips and Isaak certainly proved to be on target. Is there any chance Daryl Bailey will be different, that he actually has respect for the rule of law? I'm not holding my breath.

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