Editor’s note: The above video is from WKBN’s initial report on the Ohio Clean Water Fund.

EAST PALESTINE, Ohio (WKBN) — Ohio Attorney General Dave Yost is now suing what he calls a “phony charity” after a report from WKBN last week that looked into where the donations from the organization had been used.

Yost’s lawsuit alleges that Mike Peppel, in soliciting contributions, presented his Ohio Clean Water Fund as a nonprofit organization acting on behalf of Second Harvest Food Bank of the Mahoning Valley to provide East Palestine residents with emergency aid and bottled water following the train derailment.

Instead, Yost says Peppel and others have pocketed at least $131,000 of the roughly $141,000 raised from more than 3,000 donors.

WKBN spoke to Second Harvest Food Bank in a report that was published earlier this month. Director Mike Iberis said the Clean Ohio Water Fund claimed to have a partnership with Second Harvest, but it did not. He questioned where the rest of the money raised went after receiving just a $10,000 check from Clean Ohio Water Fund.

“We never authorized this group to raise money to be a partnership in this money, because we don’t have partnerships,” he said at the time.

Representatives of Second Harvest Food Bank had also complained to the Ohio Attorney General’s Office that they had not authorized the partnership cited by Peppel in soliciting contributions via mass emails and text messages.  

“The idea that somebody would so brazenly exploit a disaster situation and the good hearts of people who want to help is unconscionable,” Yost said. “I’m mad as hell about this, and we’re going to make sure this sham charity gets shut down.”

Yost is seeking a temporary restraining order and preliminary injunction to prohibit Peppel from engaging in additional charitable solicitations and preserve existing charitable assets. 

According to Yost, Second Harvest Food Bank twice confronted Peppel to tell him to stop advertising the non-existent partnership. To date, and only after he was called out, Peppel has paid only $10,000 to the food bank, a mere 7% of what Peppel admits he raised, Yost said.

“Here’s a message for anybody else who might hope to profit from the situation in East Palestine: Don’t even think about it,” Yost said.

Peppel registered the Ohio Clean Water Fund as a 501(c)(4) because he said it “was the fastest way to start raising money.” According to the IRS, contributions to organizations like The Ohio Clean Water Fund are generally not tax deductible as charitable contributions.

He would not speak to WKBN on camera but provided a statement last week about where the money was used.

He said, in part, “Digital and text fundraising is based on the idea of a rev(enue) share model where the sponsoring organization gets 15-20% of the total raised and the rest goes to fundraising costs.”

According to Peppel, there are agency fees that total up to $14,118 and data prospecting fees that add up to $91,769. So at this point, about $35,000, net, was raised after fees were taken out, he stated.

For those wanting to make a charitable contribution, Yost encourages donors to research charities and ask the right questions. He also offered the following tips:

• Visit the attorney general’s Good Giving Guidelines and Research Charities webpage to check whether charities have complied with registration requirements. Media articles and other postings can also provide useful details about groups, board members and key employees.
• View 990 forms, which most tax-exempt groups must file with the Internal Revenue Service. These forms describe where organizations get their funding and how they spend it.
• Support familiar, established organizations, or, if considering a donation to an unfamiliar group, check its website first. Does the information match what you received when you were asked to contribute? Do the group’s programs and services make sense?
• Talk with friends and family about unfamiliar solicitations. Have they heard of the group? Do they know of anyone who has been assisted by it?

Ohioans who suspect misuse of charitable funds or fraudulent fundraising activities should contact the Ohio Attorney General’s Office at 800-282-0515 or charitable.ohioago.gov.