Jennifer 8. Lee/The New York Times

They are a familiar sight on street corners across the five boroughs: Men and women standing behind folding card tables, urging passers-by to throw a little change into the empty plastic water jug marked “U.H.O.”

But an investigation by Attorney General Andrew M. Cuomo appears to have confirmed what many New Yorkers secretly (if somewhat guiltily) suspected all along: The United Homeless Organization, supposedly a nonprofit group set up to help feed and house the homeless, was actually an elaborate fraud.

According to a complaint filed by Mr. Cuomo [pdf] on Tuesday morning, U.H.O. does not operate a single shelter, soup kitchen or food pantry. It does not provide food or clothing to the homeless. It does not even donate money to other charities that do.



Most of those coins and bills, Mr. Cuomo contended, end up in the pockets of those working the donation tables, who pay a daily fee to the group’s founder and president, Stephen Riley, and its director, Myra Walker, for the right to use the U.H.O. tables, jugs and aprons. The rest of the money, Mr. Cuomo charged, is kept by Mr. Riley and Ms. Walker, and has been used for a variety of expenses not related to U.H.O. business, including expenditures at Weightwatchers.com, Toys “R” Us, P. C. Richard, Bed, Bath & Beyond, and premium cable and electricity bills at their homes.

Those papers that U.H.O.’s workers display on their card tables? Nothing more than copies of the group’s certification of incorporation, according to Mr. Cuomo, used to mislead the public into believing they are permits. Incorporation does not give any special right to solicit on the streets, the lawsuit notes.

“U.H.O. exploits the good intentions of people who thought that their charitable donations were helping to fund services for the homeless,” Mr. Cuomo said in a statement. “Instead, their donations go directly to U.H.O.’s principals and workers, who abused the organization’s tax-exempt status to line their own pockets.”

Mr. Cuomo charged that U.H.O. had failed to maintain any records of donations or expenditures, including at least half of the cash withdrawn from the group’s bank account in 2007 and 2008. Mr. Riley and Ms. Walker also violated state law by operating U.H.O. without any board or independent oversight, and the organization has not held an election for directors since its incorporation in 1993, according to Mr. Cuomo.

It has long been known that the money in U.H.O. is pocketed by the people at the tables. The New York Times wrote about it in 2001, when a program director said the best advocates for the homeless were the homeless themselves. The New York Post likewise wrote about the pocketed money in 2008.

However, the lawsuit is charging improper use of the collected funds, poor accounting, and false claims of how the money would be used.