On October 25, Pennsylvania Attorney General (AG) Michelle Henry announced a court order requiring the pastor and founder of Peniel Christian Fellowship International to pay $305,704 in restitution for allegedly misusing ministry funds for personal expenses. The AG took action alleging that charitable donations to the church were diverted into the pastor’s personal accounts to pay for rent, vehicles, and other private expenses.

This recent enforcement action in Pennsylvania highlights how AGs intervene to protect public trust and prevent financial misconduct. State AGs play a critical role in ensuring charitable funds are used appropriately, holding organizations accountable when donations are mismanaged or abused.

Broader Efforts: Multistate Action Against Cancer Recovery Charity

While Pennsylvania’s case is a stark and recent example of AG oversight, collaborative efforts between states also play a vital role in addressing fraud. In March 2024, 10 AGs joined the Federal Trade Commission (FTC) in filing a complaint against the operators of Women’s Cancer Fund, previously known as Cancer Recovery Foundation International.

The complaint, filed in U.S. District Court for the Southern District of Texas, accuses the charity of misleading donors by claiming their contributions would assist women undergoing cancer treatment. However, only $200,000 of the $18 million raised from 2017 to 2022 reached patients, while the organization’s leaders received more than $750,000 in payments.

A bipartisan coalition of 10 state AGs worked with the FTC to seek donor refunds, civil penalties, and injunctive relief. This case underscores the multistate collaboration when it comes to perceived fraudulent charitable practices. The coalition consisted of state AGs from California, Florida, Maryland, Massachusetts, North Carolina, Oklahoma, Oregon, Texas, Virginia, and Wisconsin.

The Role of AGs in Regulating Nonprofits

Both the Pennsylvania and Women’s Cancer Fund matters highlight the authority that AGs hold to regulate charities. Their oversight spans several areas:

• Nonprofit Corporations: AGs monitor nonprofits for compliance with fiduciary duties, pursuing directors for legal violations and dissolving organizations when necessary.
  
• Charitable Trusts: AGs protect charitable assets held in trust, ensuring they align with donors’ intended purposes.
  
• Charitable Solicitations: AGs are empowered to identify and stop deceptive fundraising practices through civil and criminal enforcement actions.
  
• Charity Registrations: Many states require charities and fundraisers to register, enabling AGs to monitor financial activities and prevent violations.
  
• Health Care Conversions: AGs oversee the conversion of nonprofit health care entities to for-profit status to preserve charitable assets.

Why It Matters

The recent actions demonstrate the role of AGS in safeguarding charitable assets and protecting donor trust in such organizations. For nonprofits, understanding the regulatory scope of state AGs is crucial to maintaining transparency and compliance. Companies operating in this space are wise to ensure strict compliance with jurisdiction-specific requirements such as filing and reporting obligations, and ensure that general business practices do not run afoul of local practices.

Troutman Pepper State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clayton is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice, multidisciplinary teams with decades of experience crafting effective strategies to help deter or mitigate the risk of enforcement actions and litigation.
	Judy Jagdmann Judy is a partner in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice, based in the Richmond office. She brings experience serving as chair and commissioner of the Virginia State Corporate Commission (VSCC) from 2006 through 2022, which includes regulating the utilities, insurance, banking, and securities industries. She also served as Virginia’s attorney general from 2005-2006.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on enforcement actions, investigations, and litigation. Stephen primarily represents clients engaging with, or being investigated by, state attorneys general and other state or local governmental enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, with a particular focus on heavily regulated industries.
	Michael Yaghi Michael is a partner in the firm’s State Attorneys General and Regulatory Investigations, Strategy + Enforcement (RISE) Practice Groups, nationwide teams that advise clients on consumer protection enforcement matters and other regulatory issues.
	Samuel E. “Gene” Fishel Gene is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) practice, based in the Richmond office. He brings extensive regulatory experience, having most recently served as senior assistant attorney general and chief of the Computer Crime Section in the Office of the Attorney General of Virginia, and as special assistant U.S. attorney in the Eastern District of Virginia for 20 years.
	Chuck Slemp Chuck advises clients on a wide range of complex issues that frequently involve government actions, including investigations, inquiries, regulatory matters, and litigation. With a distinguished background in the law and public service, he served as chief deputy attorney general of Virginia before joining the firm. In addition to overseeing the Department of Law and Division of Debt Collection, Chuck managed a team of attorneys who handle complex litigation and investigations. He also directed the attorney general’s legislative affairs and represented the attorney general in various capacities.
	Tim Bado Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Chris Carlson Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general.
	Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries.
	Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice. She focuses her practice on two primary areas: government contracting and state attorney general work.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	Susan Nikdel Susan is an associate in the firm’s Consumer Financial Services Practice Group, and focuses her practice on consumer financial services matters. She has defended several of the nation’s largest and most influential financial institutions in individual and class action litigation involving the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and other consumer privacy statutes.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Trey Smith Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation.
	Daniel Waltz Daniel is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and State Attorneys General team. He counsels clients in connection with navigating complex government investigations, regulatory compliance, and transactions, involving state and federal government contracting obligations. Drawing on his broad experience as a former assistant attorney general for the state of Illinois, Daniel is a problem solver both inside and outside the courtroom.
	Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general.
	Stephanie Kozol Stephanie is Troutman Pepper’s senior government relations manager in the state attorneys general department.