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Tables staffed by the United Homeless Organization are a common site in Manhattan.
United Homeless Organization tables are a familiar site on New York's streets. People wearing red aprons bearing the nonprofit's name stand behind empty water jugs asking passersby for money to help the homeless. The tables have brochures listing citywide services and their phone numbers, and many UHO workers say the money is used to support such services.
RELATED DOCUMENTS: Federal Complaint | UHO Tax Document
Instead, Cuomo charges, the money goes directly to the people manning the tables and to the nonprofit's founder and president, Stephen Riley, who runs the organization from his home in the Bronx, and its director, Myra Walker.
Riley has not returned calls requesting comment.
Riley and Walker are also the only members of the organization's board. Cuomo's lawsuit says they have not held an election for the nonprofit's directors since it was incorporated in 1993.
The organization charges its workers a $15 fee for use of the tables, aprons, water jugs and brochures. The workers then pocket all the money solicited during their "shift," the lawsuit says.
"Although assets of UHO, Riley and Walker treat the 'fees' as their personal kitty, dipping into them whenever they choose. In effect, Riley and Walker have co-opted a tax-exempt, charitable corporate structure for their own personal benefit," Cuomo's office writes in the complaint, filed in New York Supreme Court.
According to the investigation, the UHO does not have a solicitation license, but workers are given documents of incorporation to display on their tables to trick the public into believing their operations were legal.
As many as 50 tables are set up throughout the city seven days a week, with two shifts on weekdays and one on weekends, according to the lawsuit. Based on those numbers, Riley and Walker could have been making roughly $9,000 a week or $100,000 untaxed dollars every year.
A 2007 tax filing for the nonprofit says it received $97,890 in contributions, and that Riley received no compensation. Cuomo's lawsuit claims that Riley and Walker used the fees they collected from the workers for their own expenses, including cable and electric bills, travel, and purchases at Bed, Bath & Beyond, PC Richards and Weight Watchers. The UHO also bought four vehicles, but all four titles were transferred to Riley's name.
According to the lawsuit, Riley claimed to receive only Social Security Disability benefits and governmental housing assistance for income. Walker said she only receives governmental housing assistance and $120 a week from UHO.
Reaction to the news was a mixture of presumption and shock that the scam went unchecked for 16 years. Many New Yorkers had questioned the legitimacy of the ubiquitous folding tables and water jugs in the past.
Last month, Arnold Diaz, a reporter for the Fox affiliate in New York, accosted Riley while he held a meeting in Union Square. Riley and his associates screamed at Diaz and would not answer questions about the organization's income. At one point, someone in the crowd threw the video camera to the ground.
Blogs and Web sites are peppered with accusations dating many years back that UHO is a fraud. Today, many New Yorkers said they weren't at all shocked by the allegations.
"It didn't come as a surprise, but it's really tragic at a time of record homelessness in New York City," said Patrick Markee, a senior policy analyst at the Coalition for the Homeless. "New Yorkers should feel confident that their charitable donations are going to help the homeless."
The city's Department of Homeless Services' last estimate of New York's homeless population, released Nov. 20, put the total at nearly 38,000 people.
The attorney general's office would not respond to questions about the timing of the lawsuit or why UHO had not been investigated sooner.
