SALT LAKE CITY — Utah and the Federal Trade Commission filed an agreement in federal court Thursday with Kars-R-Us.com and its operators, accused of running a $45.5 million national charity fraud scheme by misleading donors about how their contributions would be used.
The Utah Department of Commerce’s Division of Consumer Protection and the Utah Attorney General’s Office said Kars falsely told donors that vehicle contributions would fund free and low-cost breast cancer screenings through the United Breast Cancer Foundation. But only $126,815 — about 0.28% of the money raised between 2017 and 2022 — went toward screenings, according to the complaint.
Between 2017 and 2022, Utahns donated 935 vehicles and nearly $366,000 to Kars. Nationally, more than 84,000 vehicles were donated.
The agreement imposes a $3.9 million judgment against Kars and its operators, Michael Irwin and Lisa Frank. Payment is partially suspended due to their claimed inability to pay in full, but the entire amount will become due if they are found to have misrepresented their finances.
The settlement permanently bans Irwin from any fundraising activities and requires Frank, Kars, and its employees to substantiate future fundraising claims.
The lawsuit, filed in U.S. District Court in California, was joined by 18 states and several state secretaries of state. The FTC approved the action on a 3-0 vote.
Utah officials urged residents to thoroughly research charities before donating. Reports of fraudulent solicitations can be made through the Division of Consumer Protection at dcp.utah.gov.