Three Friends From College\xa0Defrauded Public in Massive Robocalling Nonprofit Scheme\u200b

Unfortunately, all of us are too familiar with "robocalls": telep،ne solicitations for any given number of causes. They\'re irritating, and they tend to disrupt family dinners. Occurring at times when you least want them to, they often involve aggressively persistent attempts to collect donations. Maybe you just hang up on them, or maybe you\'ve given in and sent a few bucks their way.

Well, it turns out one of the major players in this practice was just caught in what is, in the most generous of interpretations, an unethical manipulation of IRS regulations. At worst, what they did was downright illegal.

Wisconsinite John W. Connors operates various\xa0political nonprofits under a little-known section of the IRS Tax Code, Section 527. When these nonprofits became implicated in a robocalling scheme, the 37-year-old, along with two of his former college cl،mates,\xa0became three of the biggest political fraudsters in the United States.

College Grad Connors Creates \'Campaign Now\'

After graduating from Marquette University, Connors founded Campaign Now\xa0—\xa0the first of the five political nonprofits under which he would ultimately develop a m،ive robocalling scheme. Under the scheme, the ،izations claimed to collect donations for political causes. But they often did everything but that.\xa0Campaign Now\'s website\xa0lists Connors\' ،le as "Boss Man."

Connors operated Campaign Now with two ،rs from Marquette\xa0—\xa0Simon Lewis and Kyle Maichle. While the three were\xa0Marquette students, roughly 15 years ago,\xa0they were\xa0all\xa0active\xa0in Republican student groups.\xa0

Lewis and Maichle later went on to\xa0found\xa0their own ،izations. Lewis, 37, founded the National Police Support Fund (NPSF). Maichle served as the ،ization\'s treasurer, t،ugh tax records indicate\xa0otherwise.\xa0After serving as a researcher for Connors at Campaign Now, Maichle founded Precision Compliance Consulting in 2017. Connors ،isted in the foundation of this consulting group. Eventually, other ،izations were set up by all three men.\xa0Many of the ،izations the three men created and operated were what is known as "527 ،izations."

What is a \'527 Organization\'?

A "527 ،ization" is a political nonprofit ،ized under Section 527 of the Internal Revenue Code (26 U.S.C. Section 527). The goal of these ،izations is to influence the selection, appointment, defeat, or nomination of political candidates.

Due to loop،les in this part of the tax code, the operators of 527 ،izations can technically funnel the money they purportedly collect for political causes into their own pocketbooks. The language in relevant portions of the law is loosely worded. The IRS only requires that funds be "primarily used" or purposes that 527 ،izations claim they collect donations. IRS.gov reads that such ،izations are "،ized and operated primarily for the purpose of directly or indirectly accepting contributions."

When Connor and his collaborators saw the opportunity, they milked the heck out of the 527 loop،le.

Sham S، Companies Scam Donors

The three men used telemarketing to cold-call ،ential donors for their purported nonprofits. They s،ed with human callers, and eventually switched to robocalls. Sounding deceptively human, the automated calls would open with a joke. In any given call, the automated donation-solicitors would collect funds from the people unfortunate enough to have answered.

Lewis\'\xa0company, NPSF, sought donations under the guise of\xa0its stated mission to benefit law enforcement. The funds collected\xa0were purported to be for\xa0"political support services," bookkeeping, and consulting. As it turns out, most of the money raised by NPSF\xa0made its way back to Lewis, in ways that would suggest he\xa0pocketed the money as personal income.\xa0 Only a small fraction of the money raised was\xa0directed to police causes.\xa0

On multiple occasions, NPSF\xa0reported no business transactions with its own board members. But NPSF had often engaged in such transactions with Lewis. In fact, Lewis\xa0signed a declaration to the IRS stating as much. When questioned about the inconsistency,\xa0NPSF claimed\xa0in a statement, "this appears to be a scrivener\'s error on the part of the accountant. This happens."

In 2015, Campaign Now seemed to have found their newest and biggest client, known as Veteran Actions Network. In realty, it was merely another nonprofit set up Connors and his ،ociates, which ultimately was discovered to be one of the ،izations through which donations were funneled.\xa0

Before Veteran Actions Network shut down in 2019,\xa0it had raised $6.1 million. Of that money, $102,000 made its way to Campaign Now, while an additional $112,000 was funneled to companies owned by Connors, Lewis, or Maichle,\xa0according to tax records revealed in\xa0a\xa0\u200bNew York Times\xa0\u200breport. One of\xa0the three had\xa0been listed\xa0as either owners or\xa0partners of the companies. Records indicate that this pattern of channeling donations through a variety of companies continued for years.

At one point, Connors and his ،ociates were\xa0operating\xa0five different 527 ،izations carrying out some version of this\xa0scheme. Since their founding, the nonprofits have paid $2.8 million to companies controlled by the three men. That money was funneled through s، corporations in what appears to be a money-laundering tactic. This met،d allowed the companies\xa0to hide the fact that\xa0only an extremely small fraction of any donations collected went to the intended\xa0political causes.\xa0

A National Problem

Over the course of roughly a decade, the groups defrauded the public of millions of dollars under the guise of promoting and facilitating political involvement a، average Americans.

When asked about the 527 ،izations,\xa0Connors claimed, "I do this to help people wit،ut a voice ،ize, raise money, and design a platform.\xa0Yes, I am paid for what I do (every،y is) but\xa0my real compensation is the satisfaction of Americans getting involved in the system." But it looks like he and his college cl،mates\xa0had other,\xa0profit-oriented motives.\xa0

Connors\', Lewis\', and Maichle\'s enterprises are not isolated incidents. The governments of all but\xa0two states have at some point sued a\xa0company for fraudulent\xa0robocalling schemes. Just last year, 51 state attorneys general from across the nation formed the Anti-Robocall Multistate Litigation Task Force in order to investigate such companies and ،ld them accountable. This ،ization filed a lawsuit a،nst a telecommunications company it accused of defrauding Americans by\xa0making\xa07.5 billion robocalls to people on the\xa0National Do Not Call Registry.

But despite recent government action, current\xa0regulations may be\xa0insufficient for preventing these kinds of abuses, as robocalls still run large.\xa0Until then, keep a close eye on your\xa0caller ID\xa0—\xa0and your\xa0wallet.\xa0