The Sad End Of United Homeless Organization, Inc.

The New York City based not-for-profit group United Homeless Organization, Inc. (“UHO”) has been closed down. A New York state court issued the order after the defendants failed to answer a complaint filed last November by New York State Attorney General Andrew Cuomo. As a result of the judgment, UHO will be dissolved. UHO's founder and president, Stephen Riley, and its director, Myra Walker, also are banned from operating not-for-profits in New York State. 

The government alleged that Riley and Walker used the organization to dupe the public into donating cash to fund services for the homeless, when the money was instead used for personal expenses.
 
A hearing will be scheduled to assess the exact amount of damages and restitution that the defendants may be ordered to pay and to oversee the dissolution of UHO.
 
The government previously obtained a preliminary injunction, which required UHO, Riley and Walker to immediately halt all charitable solicitations from the public. That interim order also froze UHO’s assets, including bank accounts and vehicles.
 
According to the lawsuit: Riley and Walker had UHO workers set up tables across the city with plastic jugs to collect cash donations, telling sympathetic passersby that donated funds would be used for services for the homeless. However, money collected went directly to Riley and Walker, was kept by the people working for UHO, or was used to continue the fraud, instead of funding charitable programs or services. The lawsuit charged Riley, Walker, and UHO with engaging in a scheme to defraud and violating New York State’s not-for-profit and charitable solicitation laws.
 
In addition, according to the complaint:
 
UHO employees (also called “table workers” or “members”) paid Riley and Walker a fixed daily fee for the right to use the UHO tables, jugs, aprons, and other paraphernalia. After paying the fee, the workers would pocket any daily cash donations they received. In turn, Riley and Walker used the fees collected from workers for their own living and travel expenses, while claiming in annual reports to the Attorney General’s office that they received no income from UHO. In addition, the lawsuit alleged that Riley misappropriated UHO assets, including four UHO vehicles that he transferred to his own name.
 
UHO workers encouraged donations with false and misleading statements that the funds will “help the homeless,” “feed the homeless,” and otherwise go to “charities and different churches” or to support pantries, shelters, and detox centers. In fact, UHO did not operate any shelters, soup kitchens, or food pantries. It did not purchase food, clothing, or other essential items for distribution to the homeless, or provide social workers or any social services to assist the homeless or fund other charities’ efforts on behalf of the homeless. In addition, Riley and Walker failed to secure a public solicitation license for UHO. Despite this, workers were given UHO’s incorporation receipt to display at their tables to mislead the public into believing it was a permit.
 
UHO failed to maintain any records of the hundreds of thousands of dollars of funds collected and pocketed by UHO workers at the tables. In addition, more than fifty percent of the cash withdrawn from UHO’s bank account in 2007 and 2008 lacked any documentation explaining the purpose for which the funds were spent. Since UHO failed to properly book its revenues and expenses, it filed false and misleading financial reports with the Attorney General’s office.
 
UHO was operated by Riley and Walker without any board or financial oversight, which is required of all charities by New York State law. Riley and Walker were the only directors on UHO’s board, despite legal requirements that New York State not-for-profits have three directors. UHO had not held an election for directors since its incorporation in 1993.