Law & Justice

Fraudulent Sparta-Based Superstorm Sandy Charity HSRF To Be Dissolved and Funds Dispersed to Legitimate Charities; How Consumers Can Donate to Legitimate Charities and Protect Themselves From Scams

July 9, 2013 at 3:31 PM

SPARTA, NJ – It is more than eight months since Superstorm Sandy hit, and clean up efforts are still taking place, as well as aid distributed to those in need.

After Superstorm Sandy, organizations cropped up in the midst of the recovery effort, some claiming to be charitable, when in fact they were not.

One such organization was Hurricane Sandy Relief Foundation, known by its acronym HSRF, started by Sparta residents John Sandberg, age 31, and Christina Terraccino, age 27.

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The Superior Court in Bergen County has issued a Final Consent Judgment and Settlement Agreement indicating this fraudulent charity have all contributions distributed by an outside administrator, and then be dissolved.

What is the story with this organization, and how is a consumer able to spot a legitimate charity from a fake one?

The State Attorney General and Division of Consumer Affairs filed the lawsuit on Feb. 21, citing Sandberg and Terracino for operating their charity without being officially registered as a charity with the state. HSRF was additionally not a 501(c) (3) tax-exempt organization with the Internal Revenue Service the division said. The state said the organization and its principals did not comply with the Charitable Registration and Investigations Act, Charities Regulations, and the Consumer Fraud Act, for the state, according to a press release released by the state on June 28.

The Alternative Press has found conflicting information regarding the exemption status of this organization.

The group, which still maintains an operational website, claimed it is a 501(c) (3) organization on the front page of its website with this notice:

“Please be advised that Hurricane Sandy Relief Foundation, ("HSRF") is a tax exempt organization under IRC 501(c)(3). HSRF filed an application for recognition of exempt status with the Internal Revenue Service, and upon exemption all donations will be eligible for an income tax charitable deduction retroactive to October 31st, 2012. HSRF is in no way affiliated with Hurricane Sandy New Jersey Fund Inc. we are not soliciting contributions at this time.”

HSRF was registered with the IRS as an exempt organization in the file for charities within the state of New Jersey, with the EIN # of 461310943, according to the IRS (search under New Jersey link). The charity was listed at 564 Lafayette Road in Sparta with Sandberg as the main contact. None of this information is on the main website.

Under the “Sandy Stories” part of the website, embedded in HSRF’s website, when one clicks through, this notice is found about HSRF, “Please be advised that Hurricane Sandy Relief Foundation  ("HSRF") is not a tax exempt organization under IRC 501(c)(3). HSRF filed an application for recognition of exempt status with the Internal Revenue Service and upon exemption all donations will be eligible for an income tax charitable deduction retroactive to October 31st, 2012. HSRF is in no way affiliated with Hurricane Sandy New Jersey Fund Inc.”

Hurricane Sandy New Jersey Relief Fund Inc. is an organization filed as a 501(c)(3) status, and registered with the State of New Jersey, with Katherine Camille Henderson as the contact person, and the charity address listed as One Gateway Center in Newark. That organization was also recognized by the Governor’s Office after its inception in this press release. The charity is chaired by the Governor’s wife, Mary Pat Christie, and its website is here

Unlike the fraud site, the Hurricane Sandy New Jersey Relief Fund, expresses its mission clearly and provides clear information without the smoke and mirrors of the HSRF, including tax ID number, W9, determination letter about the 501(c) (3), and the fund’s by-laws. It also lists partners, how to be involved, phone numbers to valid organizations within the state to contact to get involved, grants, and funds. There are additionally photos showing the activities of the group.

Most recently, the Hurricane Sandy New Jersey Relief Fund announced a $1 million donation from New Jersey Native Jon Bon Jovi on its Facebook Page

According to New Jersey’s Division of Consumer Affairs Website, all New Jersey charitable organization must register with the Division of Consumer Affairs Charities Registration Section, unless exempt under the CRI Act (Charitable Registration and Investigation Act). The CRI Act states a charity with contributions of $10,000 or less can choose whether or not to register with the state as a charity. Once the charity receives over $10,000, if they are not previously registered, they must do so within 30 days of exceeding the amount.

It is typically religious and educational organizations that are exempt from the registration.

Charities below the $10,000 threshold must pay a $30 registration fee. Registration fees are scaled based on the funds raised, and only run $250 for those groups that have raised over $250,000.

Sandberg and Terracino apparently transferred $13,596.53 from HSRF into their own personal accounts, which the court ordered transferred back to their attorneys’ escrow fund. They allege nothing else was transferred into their accounts beside another $1,650, just prior to the filing, and all else had been transferred to their attorneys’ escrow account.

Sandberg and Terracino told the state that approximately $334,000 could be distributed to charities, and the administrator will distribute funds to legitimately registered charities providing relief to Sandy victims within the next five months.

The defendants’ website provides vague information as to their fundraising purpose, indicating the charity was begun “by the victims for the victims,” and was started as a philanthropic arm of (the url for the Hurricane Sandy Relief Foundation’s website), having claimed to partnered with “donors, support groups and volunteers,” to “raise awareness and offer help and hope to victims of Hurricane Sandy.”

As part of their story, the defendants continued, “With widespread power outages and no heat the Hurricane Sandy Relief Foundation worked tirelessly through the heart of the storm off a generator to build a website that would inform our fellow victims of local shelters and immediate relief.  Many of our friends, neighbors and relatives were devastated by the loss of homes, vehicles, clothes and food. We decided to take it upon ourselves to bring attention to our neighbors in need of immediate relief. With no funding, and limited resources we started our journey to raise donations to bring necessary supplies to local shelters, restore power, clean up debris, and rebuild communities. Thanks to our local board of directors we were able to secure enough funds to begin to make a difference. We are now receiving donations from across the country and thank all of you for your continued support. With an anticipated of 6-8 year recovery and 2 year clean up this will not be a sprint, it will be a marathon.”

On the HSRF’s website, is a place where residents could apply for assistance, and specify their needs after the storm. There are also storm photos on the site of unknown origins.

The organization did not specify the exact work they have done, like the legitimate organization, but in the fundraising section, lists that they had received financial and in-kind donations from foundations, corporations, and donors, which the donations were earmarked for food, clothing, supplies, aid, and “the future rebuilding of communities.”

HSRF also specified providing assistance to Staten Island, naming materials to be dropped off to locations and shelters, as well as to New York City. There was a section where volunteers could also sign up, and had a front where volunteers could fill out a form to volunteer, or inquire how to start their own event. The group created an “Hurricane Sandy Relief Foundation and Hurricane Sandy Victims’ Wedding Registry” registry. On the registry, donors could purchase items, including cleaning supplies, diapers, pet food, light bulbs, portable generators, batteries, mens’ apparel, and more.

Supplies and gift cards collected by HSRF were donated to the Salvation Army by the court.

“Charities are required to operate in an open and transparent manner, to ensure the public maintains its trust that donations are used as intended.  Annual registration, which requires financial disclosure, is the foundation of accountability to the public.  We will act, as we did in this case, whenever we believe our charities laws and regulations have been violated,” said Acting Attorney General John J. Hoffman.

The New Jersey Division of Consumer Affairs has said charities that are legitimate will be transparent in their activities, and encourage interested donors to request information. Consumers can look up charities on the division’s website, or call (973) 504-6215 during normal business hours.

Consumers that suspect New Jersey businesses or charities of consumer abuse can file a complaint with the New Jersey Division of Consumer Affairs. Click here for the division’s website, or call (800) 242-5846 (in New Jersey) or (973) 504-6200. 

Sandberg and Terracino have been ordered not to solicit further contributions for Superstorm Sandy Relief, including through several dozen domain names pointing to storm relief that Sandberg purchased as the storm was imminent.  Sandberg's website is registered to him at an address on 295 Central Avenue, in Wyckoff, N.J., and was created on Oct. 26, 2012, while the storm began to cause havoc later in New Jersey on Oct. 28 and 29.

The legitimate organization, the Hurricane Sandy New Jersey Relief Fund, did not register its domain, on the other hand, until Nov. 2, after the storm had passed.

The pair is also banned from serving in a leadership position in a charitable organization, over the next two years. if they would like to serve on a charity at a later date, Sandberg and Terracino must provide certification of no violation of their settlement terms.

Should Sandberg and Terracino violate their settlement orders, they will be ordered to pay $79,195.18, an amount that will be vacated after four years, as long as Sandberg and Terracino abide by the settlement terms.

Click here for the full press release issued by the state. 


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