OLYMPIA — Attorney General Bob Ferguson has filed a lawsuit in King County Superior Court against the Holiday Treasure Chest Charity Foundation and its founder, Mark Bergeson, accusing him of using the charity for his own personal gain.
In addition to civil penalties and cost and fees, Ferguson’s lawsuit asks the court to dissolve the organization and bar Bergeson, also known as Mark Jensen, from operating any nonprofit or charitable organization in the future.
“Charities exist to help those in need, not to enrich the people running them,” Ferguson said. “Washingtonians thought their donations were helping kids during the holidays, not lining the pockets of those who run this so-called charity.”
Holiday Treasure Chest was created in 2008 as the charity arm of the Seattle Seafair Pirates, though the organizations parted ways in 2013. At that time, a dispute led to litigation between the two organizations, which resulted in a settlement that prohibited the foundation from using the name “Seafair Pirates” and soliciting on the Seafair Pirates’ behalf.
The Seafair Pirates are not a party to Ferguson’s lawsuit.
Attorney General Ferguson’s lawsuit asserts that Bergeson has withdrawn more than $280,000 in cash from the charity’s checking account since 2013, but did not keep records about how he used those funds.
Ferguson’s lawsuit further asserts that Bergeson used the charity’s account for personal purchases.
Account records show thousands of dollars in purchases for fuel, groceries and meals as well as cell phone, cable and internet bills. Account records also show Bergeson used the charity’s account to pay for a resort stay in Friday Harbor and a hotel room in Ocean Shores. A subscription to online dating service Match.com was paid for with charity account funds.
Ferguson also asserts that Bergeson sold toys, electronics and collectibles contributed to Treasure Chest on online auction sites. The online listings claim that “100% of the sale of this item will benefit Pirates Charity Foundation.” However, Holiday Treasure Chest does not keep an accounting of the auction sale proceeds.
Holiday Treasure Chest claims its donations help to distribute toys, food and other items to needy children during the holiday season. In filings with the Secretary of State’s Office, Treasure Chest reported it raised more than $1 million in donations between 2012 and 2018, claiming it spent an average of 82 percent on its program services.
Ferguson’s investigation discovered the charity’s failure to keep accurate financial records makes it impossible to determine how much it actually spent on its programs.
This lawsuit is not the first action Ferguson has taken involving Mark Bergeson.
Earlier this year, Ferguson sued Bergeson, Holiday Treasure Chest and Maryfest Inc. over a previously secret agreement banning former Maryfest board members and promising $175,000 to Bergeson after he resigned if certain conditions were not met. In July, Snohomish County Superior Court Judge Eric Lucas voided that agreement.
The current lawsuit, filed this week, accuses Bergeson and Holiday Treasure Chest of multiple violations of the Charitable Solicitations Act, Charitable Trust Act and the Consumer Protection Act. Among other requirements, the Charitable Solicitations Act and Charitable Trust Act prohibit charitable organizations from using donated funds in a manner contrary to their charitable purpose, or from making false or misleading statements during their solicitations.
The lawsuit also seeks to dissolve the charity and bar Bergeson from registering or operating a non-profit or charity, or soliciting charitable donations of any kind in the future. Ferguson is also seeking civil penalties for the violations, as well as legal costs and fees.
The Consumer Protection Act allows for civil penalties of up to $2,000 per violation.
Today, as “Giving Tuesday” marks the unofficial beginning of the holiday giving season, consumers should take steps to make sure their generosity is not taken advantage of. More information about how individuals can protect themselves from charity scams can be found here.