Online Fundraisers Fraught with Criminal, Civil Risks
Civil litigation, potential criminal charges and uncertain access for beneficiaries are among the risks of the relatively new concept known as crowdfunding, as highlighted by the viral story chronicling the legal battle between a homeless veteran and a New Jersey couple.
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There Could Be Exposure to Criminal Charges
In addition to the civil suit, McClure and D’Amico could be criminally charged with theft, a crime that could mean prison time, according to Blank Rome LLP attorney Stephen M. Orlofsky, a former federal judge who serves as administrative partner of the firm’s Princeton, New Jersey, office.
The fact that the Burlington County Prosecutor’s Office confirmed the active investigation and raided the couples’ home — news footage showed investigators towing away a BMW, among other things — is a strong indicator that authorities have solid reasons to believe there’s been wrongdoing, Orlofsky said.
“To obtain a search warrant, a prosecutor must demonstrate to the judge that there is probable cause to justify the search. Judges scrutinize applications for search warrants very carefully to ensure that there is probable cause to authorize a search warrant,” Orlofsky said.
It’s unclear exactly how much of the $400,000 is in dispute, but McClure and D’Amico “could be facing significant penalties,” Orlofsky said.
Under New Jersey law and sentencing guidelines, theft convictions carry prison terms of three to five years for $500 to $75,000 and five to 10 years for $75,000 or more.
"Online Fundraisers Fraught with Criminal, Civil Risks," by Jeannie O'Sullivan was published in Law360 on September 21, 2018.