Nov 28, 2005 11:20 pm US/Central
Car Donations To Charity Go Bad
by Dave Savini
CHICAGO (CBS) ―
Donate your car to charity and receive a tax break. Sounds good, but what you may not know is car donation programs are not fully regulated.
Private companies tow and sell donated vehicles, then are supposed to give the profits to charity.
But are charities getting cheated and are criminals cashing in? CBS 2 Investigator Dave Savini has an example of good gifts gone bad.
"Get in my way one more time and I am going to knock you out," said Joseph Zuccaro, when confronted about his family's unlicensed car lot O'Hare Auto Recycling, also known as O'Hare Kars, which handles donated vehicles.
CBS 2 discovered the car business hidden from public view on a hill, past a gravel road and in the center of a muddy junk yard.
Zuccaro and his father, William, handle hundreds of thousands of dollars worth of car donations. They tow, salvage and sell vehicles, and are then supposed to give the profits to charities selected by donors.
But a CBS 2/Naperville Sun investigation found charities not always getting the donation money.
"It seemed like a good idea to help them out and get a tax break as well," said Jim Kula of Aurora, who was one of those donors.
He gave his 1992 Suburu Legacy in August to Easter Seals. Zuccaro's business was hired to tow and dispose it. Kula was told for tax purposes he would receive a letter stating the amount his car sold for. Four months later he is still waiting.
The charity also is waiting -- for its money. An Easter Seals spokesman says Zuccaro's business picked up Kula's car but never gave the charity the money it was owed.
The charity also confirmed there is more money missing, involving other car donations the Zuccaros handled on their behalf, and it has suspended doing business with them.
"I think its unfortunate especially at Christmas time when people want to give," Kula said.
He also is concerned about who the charity chooses to do business with. "It sounds like they are the ones getting duped. They are the ones that are doing business with someone, who had they known about these people and their backgrounds, they probably wouldn't choose to have them acting on their behalf."
A background check on the Zuccaros and their business reveals plenty. The company that takes car donations is run by family and has operated as O'Hare Auto Recycling, O'Hare Kars, and in the 1980s and 1990s as Globe Auto.
William Zuccaro's wife appears as the president of one company and his son, Joseph, president of the other. But it is William Zuccaro's name printed on a business application in Melrose Park.
This license was rejected; the Zuccaros opened up shop and were operating illegally.
CBS 2 contacted Melrose Park police to find out the business' status, and that's when Melrose Park Police moved in and shut down the operation. Before this, the business was run out of Franklin Park and was ordered to shut down, but continued to operate illegally.
William Zuccaro also has been in trouble. According to police and criminal court records, he's a convicted felon. His criminal arrest record includes 12 arrests, seven for assault, a battery, and a drunk driving charge. His record includes convictions related to a weapon, theft and stolen motor vehicles.
Zuccaro's family business was handling some of its car donations on behalf of a private vendor, Car Program LLC. The California company works directly for more than 1,500 charities and in each state hires towing and salvage companies like Zuccaro's.
Car Program, like Easter Seals, says it has not received all the donation money it's supposed to from the Zuccaros. It's missing at least $10,000 in donation money.
A lawyer for Car Program LLC, Jeremy Kreger, says they where not aware of Zuccaro's criminal record but have fired O'Hare Auto Recycling as of last week for failing to receive payment for donated cars.
Kreger explained the company was first suspended for non-payment after failing to turn over any proceeds for months. Much of the money owed belonged to various charities. Kreger couldn't give an exact number of charities affected.
"The dollar amount currently owed is over $10,000," said Kreger, who also revealed a similar problem involving another company. Three years ago another Illinois company allegedly stiffed charities out of more than $50,000 in car donation proceeds. That company is being sued by Car Programm LLC.
Kreger says they are planning to file a lawsuit against O'Hare Auto Recycling.
Charity car donation programs are the wild, Wild West of charitable giving because it's not fully regulated. No one is monitoring how these private towers and salvage yards handle car donation money. No one is ensuring the donation money is actually getting to the charities.
"We are definitely going to look into this," said Therese Harris, chief of the Charitable Trust Bureau of the Illinois Attorney General's Office.
Harris says she will be investigating the allegations. "That's serious. We are very concerned when money designated for charitable purposes does not go for charitable purposes at all," she said.
Harris warns the donated car business falls into a grey area, and she knows of no consumer statute governing how these types of donations are handled.
"We have not had this kind of issue come to us before. Car donations are relatively new, and our act predates this activity so we are just simply going to have to look into it and determine what if any action we can take," she said.
Harris also is concerned that people with criminal records are handling car donations.
"I am always surprised when someone with a criminal background is in a position of trust, which is what these car donation people are," Harris said.
Karen Lagow of Naperville donated a 1984 Volkswagen Jetta that was still operable and only needed a clutch. She donated it to a charity she found online called FCF Family Care Foundation. Proceeds from her car sale were supposed to help humanitarian support in developing countries.
FCF officials would not comment on whether they received any money for her donation or how they chose to work with the Zuccaro's business.
"It's ridiculous, especially if he's convicted," said Lagow, who thinks someone needs to track or screen who gets involved in the donated car business. "This all has to be monitored really closely."
Janet Irion of Oak Lawn agrees. A lifelong diabetes sufferer, Janet donated her 1985 Oldsmobile to the Juvenile Diabetes Research Foundation in 2004.
The Zuccaro family business picked up the vehicle and obtained a junk title, indicating they destroyed the car. But that's not what really happened. A year later the car was picked up by Chicago police with drugs onboard.
"Don't they check out who these people are?" Irion asked. She is angry because the car with drugs was traced back to her and she doesn't want her good name ruined.
"It makes me sad because what was meant to be something nice and proper intentions and all has not been nice," she said.
"They've been in the car donation business for a long time," said Fred Serpe, a lawyer for the Zuccaro family. Serpe says he's instructed the family business to stop operating while they are currently in the process of getting a business license and resolving issues involving outstanding debts to charities.
Car Donation Tips:
1. Verify the organization is a tax-exempt charity and registered with the Illinois Attorney General's Office.
2. Ask if middlemen will be used. That could include a towing service, salvage yard or used car lot. If so, how much money will they receive and how much money will go to the charity. It may be beneficial to sell the car and donate the proceeds directly to charity.
3. Ask what will happen to the donated car. The answer to this question could have tax implications for the donor. Will it be repaired and used by the charity or donated to a needy family? Will it be sold or junked for parts? Often a car actually used by a charity could end up being a better write-off for the donor.
4. If you donate a car, remove your license plates and immediately transfer the title to the charity's name.
To file a complaint about a car donation gone badly, call the Illinois Attorney General's Office at 312-814-3000 and ask for the Charitable Trust Bureau.
Our 2 Investigator's also would like to hear from you. Please contact us.
(CBS 2 and the Naperville Sun are news partners covering stories in the west suburbs. If you know of stories happening in this region, contact u)
