Ban on pair who duped public over children's cancer cash

Published on Thursday 2 April 2009 22:18

A FATHER and son have been banned from holding company directorships after duping the public into donating thousands of pounds to a children's cancer charity.

Bruno Schultz, 56, and his son Paul, 33, were handed bans of ten and eight years respectively by the Insolvency Service after it emerged the pair had misled the public into believing they were donating money to help sick children.

Scots charities the Goodwill Children's Cancer Company and Rosebuds (UK) Ltd were closed down in the public interest in December 2008 following an investigation by the Insolvency Service's Companies Investigation Branch (CIB).

The Schultzes ran the two companies, which claimed to have raised nearly 1.75 million for children struck down with cancer, but only a paltry 22,500 was handed over to good causes.

Both men accepted the charges and are now banned from acting as company directors and from participating in the management of limited companies.

Scotland's charity regulators were powerless to stop the pair after they registered their companies as private firms and not as bona fide charities.

An investigation into their conduct was launched after a number of complaints were made to the charity regulator, who then passed the case onto the CIB. Its inquiry found that the directors misled people over how much money had been paid to deserving causes, and over the extent of the companies' fundraising experience.

Bruno Schultz, nicknamed the Vulture, was accused four years ago of raising 300,000 a year for the Moonbeams charity – but of handing over only 70,000.

But a legal loophole allowed the pair to create the two new fundraising companies, Falkirk-based Goodwill and Linlithgow-based Rosebuds.

Both companies were set up with the stated aim of to raising substantial sums of money to help alleviate the suffering of children diagnosed with cancer.

The CIB's investigation found the companies had carried on the same, or substantially similar, businesses, involving the fraudulent door-to-door sale of a 3 newsletter.

It was claimed, the CIB said, that up to 1 million had been donated to help sick children, when the firms had raised only 250,000 – of which 190,000 had been paid as remuneration to the two Schultzes.

The investigation also found that a monthly prize draw, allegedly open to purchasers of the newsletter, had paid out prize money in less than 50 per cent of cases, and that the companies' financial records were inadequate.

The pair's disqualification comes into effect on 13 April.

Schultz snr hit the headlines last year after dumping his American fiance just days before their wedding day.

He wooed divorcee Eilean Hoffmeister before ditching her by phone in a move that she said "destroyed my world".

On Monday, the Scottish Government published new regulations that will monitor how commercial fundraisers operate in their dealings with the public and charities.