If you owned a phone in America over the last 40 years, there is a good chance you got a call from Richard L. Zeitlin.
He ran a telemarketing empire out of Las Vegas, using computers that mimicked human callers to raise money for charitable and political causes. Police and police dogs. Vietnam veterans and breast cancer victims. Missing children and disabled children and children with cancer.
He raised more than $145 million, mainly small gifts from small donors, but he kept at least 80 percent of it. For the most part, Mr. Zeitlin did that legally — exploiting loose rules and lax regulation of fund-raisers, and becoming an infamous example of how donors’ generosity could be quietly siphoned into private hands. He seemed to relish the role of antihero, suing his own regulators and setting up a website to criticize journalists who reported that he had kept much of the money he raised instead of helping others with it.
Then, after years of skirting the law, Mr. Zeitlin broke it — and brought down the whole empire.
“My whole life, I’ve been afraid of being broke,” he told U.S. District Judge Lewis A. Kaplan on Tuesday afternoon in New York. Mr. Zeitlin, 54, was asking for lenience, after pleading guilty in September to one count of fraud. “It made me make some very bad decisions.”
Zeitlin, 54, is a Wisconsin native who started in telemarketing as a teenager. His operation relied on soundboards — computers pre-loaded with dialogue from voice actors. The operator “talked” by playing snippets. Mr. Zeitlin wrote that the computers, unlike a human, would never misread the script, never argue, never insult a donor.
In 1988, the U.S. Supreme Court ruled that the First Amendment barred states from setting any limits on a charity fund-raiser’s fees. Mr. Zeitlin took advantage.
“It’s actually so easy to conduct highly exploitative and harmful activities as a charity fund-raiser, without breaking the law at all,” said Laurie Styron, the executive director of the watchdog group Charity Watch.
She said that fund-raisers like Mr. Zeitlin had one main rule to follow: Do not lie.
They were free to mislead callers by implication, telling donors they were calling for a cancer charity, then keeping most of the money themselves. But they could not tell a provable, specific falsehood — saying, for instance, that the donors’ money would be used to buy cancer drugs if it would not.
For years, Mr. Zeitlin stayed on the right side of the law — mostly.
His charity clients were often shut down by charity regulators, who said they were just get-rich-quick schemes masquerading as nonprofits. One example, the Children’s Cancer Fund of America, had allegedly hidden its uncharitable ways by shipping faux care packages full of junk that children with cancer did not need: deep-fat fryers, men’s undershirts, jock itch medicine. It shut down in 2015 after being sued by the Federal Trade Commission, all 50 states and the District of Columbia.
But new customers sprang up. By 2016, Mr. Zeitlin was raising $19.6 million for charity and keeping $17.3 million of it, according to federal charity filings.
Even when authorities came after Mr. Zeitlin himself, the largely state-by-state nature of charity regulation meant that the pain was minimal. In 2010, Ohio’s attorney general said that his company had actually broken the cardinal rule against lying, and falsely told donors that their gifts would benefit a specific sheriff’s department. But Mr. Zeitlin resolved it by paying a $10,000 settlement.
In 2016, he faced a new obstacle. The F.T.C. issued a staff opinion saying that soundboards could no longer be used to cold-call charity donors. Mr. Zeitlin sued the commission, seeking to reverse that decision, but lost.
He then shifted into an area where these calls were still legal: political fund-raising.
By 2018, his companies were working for at least 16 political action committees, making $18 million in revenue, according to campaign-finance records. These new clients worked a lot like his old ones. A reporter named Sarah Kleiner, working for the Center for Public Integrity, found that a PAC called the Children’s Leukemia Support Network let Mr. Zeitlin’s company keep about 84 percent of the money it raised. Of the rest, nearly all went to overhead and salaries or the PAC operators.
Despite the group’s name, she said, it appeared that nothing was going to help children with leukemia.
“I thought to myself, ‘If this doesn’t make people pay attention, what will?’” she said. When she tried to interview Mr. Zeitlin in Las Vegas, he followed her into the office parking lot to take down her license-plate number.
Mr. Zeitlin also created a website, richardzeitlintruth.com, where he criticized journalists and defended his rates — saying that fund-raising was a costly business.
But prosecutors said that, behind Mr. Zeitlin’s defiance, he had a problem. PACs did not tug on heartstrings like charities had. So, prosecutors said, his company began to change the wording of its recorded appeals.
The PACs suddenly sounded like the more sympathetic charities.
“Your support helps the handicapped and disabled veterans, by working on getting them the medical needs the V.A. doesn’t provide,” went one call script, for a PAC called the U.S. Veterans Assistance Foundation.
There was the lie, specific and provable.
That PAC did not help veterans get medical help. Armed with that and other falsehoods, federal authorities who had been tracking Mr. Zeitlin arrested him at his multimillion-dollar home in Las Vegas last August.
In September, he pleaded guilty to one count of fraud. In court on Tuesday, Mr. Zeitlin apologized for misleading people and said he was a changed man.
“You have been a liar your whole life,” Judge Kaplan said. “And I’m not persuaded that I haven’t just heard more of it.” He sentenced Mr. Zeitlin to 10 years in federal prison, and a $8.9 million fine.
Mr. Zeitlin shuffled out of court, shoulders slumped and hair gone gray.
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