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LISBON -- A judge granted a preliminary injunction Tuesday in the case against Ohio Clean Water Fund, the alleged fake charity which solicited donations claiming to be for East Palestine residents.
A hearing had been scheduled in Columbiana County Common Pleas Court, but was canceled, with Judge Scott Washam signing a preliminary injunction entry submitted by Ohio Attorney General David Yost.
A telephone conference has been scheduled for 1:10 p.m. May 31 with Washam.
The lawsuit was filed April 10 by Yost against the Ohio Clean Water Fund and its founder, Michael Peppel of Leetonia, claiming that the non-profit raised $141,183 from donors, with $91,769 going to administrative fees and only $10,000 from the $35,295 remaining going to Second Harvest Food Bank. Peppel and Ohio Clean Water Fund claimed to be representing Second Harvest Food Bank while soliciting the donations, but that was not the case.
Michael Iberis, executive director of Second Harvest Food Bank, filed a complaint with the Ohio Attorney General's Office on March 30 about Peppel and the Ohio Clean Water Fund, noting no partnership had been approved as claimed by Peppel, who was soliciting contributions via emails and text messages. A woman had also filed a complaint on March 29 about a possible scam after receiving a text requesting donations for the Ohio Clean Water Fund.
According to the preliminary injunction, Ohio Clean Water Fund representatives must comply with the court's temporary restraining order pending the final outcome of the case. The temporary restraining order had been issued to stop the non-profit and Peppel's alleged illegal activity, prohibiting him from engaging in additional charitable solicitations and preserving existing charitable assets.
Within 21 days of the preliminary injunction order being issued, Ohio Clean Water Fund must disburse the greater of $20,321 or all funds remaining in its bank accounts to their legal counsel to be held in escrow pending the final outcome of the case and Peppel must pay $25,000 to his legal counsel to be held in escrow pending the final outcome.
In lieu of the escrow funds, both Ohio Clean Water Fund and Peppel may file a bond with the court in the amount of $250,000 or, at the discretion of the attorney general, may appear before the court for a debtor's exam.
Prior to Monday, Ohio Clean Water Fund indicated it would not contest extending the temporary restraining order or a preliminary injunction and would consent to that. Ohio Clean Water Fund also indicated funds would be preserved for restitution and that they had no intention of attending the hearing.
Other relief being sought included restitution, compensatory damages, punitive damages, imposition of a constructive trust over all assets allegedly unjustly or illegally received or retained by the defendants and freezing the accounts.
Claims against Peppel and Ohio Clean Water Fund included committing deceptive acts or practice, misrepresenting contributions for a charitable organization without written authorization, misleading persons as to material facts concerning solicitation, failure to register with the Secretary of State's Office as a charity, unlawful professional solicitation and breach of fiduciary duties.