RICHMOND, Va. - Virginia officials have reached a settlement with a charity headed by White House party crasher Tareq Salahi for allegedly making false statements, submitting inaccurate financial statements, and soliciting donations without being registered with the state, Attorney General Ken Cuccinelli's office said Tuesday.
The settlement with the Journey for the Cure Foundation and Salahi follows an investigation launched in December 2009 by the Virginia Office of Consumer Affairs, who referred its findings to Cuccinelli's office in May 2011.
According to the attorney general's office, the Fauquier County-based foundation formed to support people with diseases such as multiple sclerosis, muscular dystrophy, leukemia and lymphoma claimed on its website that 100 percent of its financing goes to charity.
However, based on bank records, the investigation found only 33 percent of its funds in 2007 and less than one percent of its funds in 2008 went directly to disease prevention-related charities. Instead, significant amounts were spent on fundraising overhead costs.
Under the settlement, the charity must pay $32,500 in civil penalties and attorney fees. Salahi also must pay $2,500 in civil penalties. Both the charity and Salahi are prohibited from further violations of Virginia Solicitation of Contributions laws.
The settlement must be approved in Fauquier County Circuit Court.
Salahi's attorney Georgia Rossiter said Tuesday that the settlement regarding the now-defunct charity is not an admission of any wrongdoing.
All of the profits from fundraising activities went to the charity and were filtered through to other non-profit organizations, Rossiter said.
"His position is that they all went to where they were supposed to go," she said, adding that he settled because "he's got a lot of things going on."
Earlier this month Salahi filed a $50 million lawsuit against his wife, Michaele, claiming she had an affair with Journey guitarist Neil Schon as part of a calculated attempt to make money for herself and the band at his expense.
The couple gained notoriety in 2009 when they crashed a White House state dinner. Michaele Salahi was a cast member of the reality show "Real Housewives of D.C.," but the show was canceled after one season. She was thrown off the reality show "Celebrity Rehab with Dr. Drew" when it became apparent she wasn't addicted to anything.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.
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