Settlement Announced in East Palestine Donations Case
EAST PALESTINE, Ohio – Ohio Attorney General Dave Yost on Thursday announced a settlement with one of the founders of Ohio Clean Water Fund and its fundraiser that solicited money under the guise of aiding East Palestine residents.
“I have said from the beginning that we will continue to fight for the people of East Palestine, which is exactly what we did here,” Yost said. “Our Charitable Law Section was able to recover and return every cent intended to aid the community.
Yost’s office said Michael Peppel claimed to be collecting donations on behalf of Second Harvest Food Bank of the Mahoning Valley to provide residents of East Palestine with emergency aid and bottled water after the Feb. 3 Norfolk Southern train derailment.
Yost’s office began investigating the Ohio Clean Water Fund, Peppel and the organization’s fundraiser after a complaint from Second Harvest officials, who said they had never given the Ohio Clean Water Fund permission to raise money in the food bank’s name.
The investigation found that the Ohio Clean Water Fund had been soliciting monetary donations for bottled water for East Palestine residents via text messages following the train derailment and that it had collected more than $141,000 from donors nationwide.
Only after the food bank complained did Peppel agree to pay $10,000 to the food bank, a fraction of what had been collected.
Yost sued the Ohio Clean Water Fund in Columbiana County Common Pleas Court, and on June 1 announced a settlement with the “charity” and one of its board members, Patrick Lee.
That settlement required the Ohio Clean Water Fund to dissolve and to pay $116,904 in restitution to the food bank and a $15,000 civil penalty.
Since that settlement, a court-mandated review of the Ohio Clean Water Fund’s bank records, invoices, payment records and other financial documents showed that the “charity” and its fundraiser had actually raised nearly $149,000 – and that the Ohio Clean Water Fund used WAMA Strategies as its main fundraiser.
The settlement announced Thursday will direct all of the money raised on behalf of Second Harvest to the organization, a news release states.
“These scammers preyed on generous donors to try to line their own pockets, but ultimately were stopped and shut down,” Yost said.
Under the settlement with Peppel and WAMA:
- Peppel must pay a $25,000 civil penalty and is permanently banned from incorporating, operating or soliciting for any charity in Ohio.
- WAMA and its owners, Isaiah Wartman and Luke Mahoney, must pay $22,077 in restitution to Second Harvest, allowing the attorney general to distribute to the food bank 100% of the donations raised in its name.
- WAMA and its owners must also pay $3,000 in investigative costs and fees to the Ohio Attorney General’s Office.
- WAMA is prohibited for four years from soliciting for a charity in Ohio, and Mahoney is prohibited for four years from incorporating, operating or soliciting for a charity in Ohio.
“Our thanks to Attorney General Yost for the quick response in fighting for the community of East Palestine to recover contributions that were solicited improperly,” said Michael Iberis, executive director of Second Harvest Food Bank. “Second Harvest will be announcing soon how the funds will be used to assist residents.”
Published by The Business Journal, Youngstown, Ohio.