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An exclusive KIRO Team-7 Investigation into a mysterious used clothing company
catches the attention of the Attorney General, while a local mayor takes action.
Last week, our cameras first exposed how USAgain tells some businesses its red bins are "for charity,"
when, in reality, millions of dollars' worth of donated clothes are sold for profit.
Investigative reporter Chris Halsne's hunt for the truth about USAgain
exposes an international company in some trouble right here in Washington. Chris?
The Attorney General's office says USAgain is not properly licensed to collect donated clothes in this state.
They add if USAgain is misrepresenting that they're a charity,
they are also likely violating Washington's Consumer Protection Act.
USAgain employees recently approached the City of Sedro Woolley with a great sales pitch:
place this red clothing-donation bin on government property and help a charity.
Yeah, I think it is misleading.
When Mayor Mike Anderson saw a KIRO Team-7 Investigation that showed USAgain was a
for-profit company, selling and shipping clothes to other countries, he ordered the USAgain bin removed.
He says USAgain never mentioned being a commercial company.
They didn't. It was under the impression that it was for nonprofit.
And so, we wouldn't allow it if it was for-profit.
Anderson also asked local businesses who may have also fallen for what he calls a "false charity pitch"
to get rid of their bins, too.
Well, I was approached by a gentleman just saying that they had a place to donate clothing and what-not.
Anderson didn't have to do much to convince Curtis Sowers, manager of the True Value Hardware.
He says USAgain salespeople deceived him.
This week, Sowers called for them to come get their red donation box.
So they didn't tell you that they are a for-profit company when they dropped this off?
No. No. They didn't tell me, but then I didn't ask, either, you know.
When I heard the word "donation," you know, I kind of thought it was, you know, just a good thing.
Curtis handed Team-7 Investigators a copy of the brochure USAgain left with him recently.
Nowhere inside it does it say this is a for-profit company,
but it does make use of the word "charities."
So, you would think that if that's being recycled, that would mean that they're giving to other people.
Linda MacKay runs a local daycare facility in Ballard.
She says she agreed to allow a red bin on her property, free of charge, because USAgain employees told her "they helped nonprofits."
I work hard around here to teach children and families about respect and truthfulness,
and, you know, and it's pretty sad when somebody's kind of misguided you in that direction.
And that's a serious matter to Assistant Attorney General Shannon Smith.
If the organization that's placing the boxes misrepresents to the location owner or to
anybody else that the organization is a charity, then that's unlawful.
USAgain CEO Mattias Wallander is a Swedish-born Chicagoan. He says most of their red bins say "commercial" on them,
so anybody could figure out they represent a for-profit company.
If people don't read the contents of the food they eat, I don't know what to say to that.
You know, we're trying to do something good for the environment by
diverting the 10 million tons of clothing that go into landfills every year.
But where does the money go from the sale of clothes?
After some questioning from Team-7 Investigators, Wallander admitted that he is not the majority owner of USAgain.
We discovered the majority stakeholder is a Caribbean-based holding company called Fairbank, Cooper & Lyle.
European court records show Fairbank, Cooper & Lyle
has financial ties to an alleged cult called the "Tvind Teachers Group."
Danish prosecutors have charged top leaders of the Teachers Group in a tax-fraud and embezzlement scheme.
Wallander and his co-CEO Janice Bostic admit ties to the group,
but say they have nothing to do with criminal allegations in Denmark.
You're okay with saying you're a member of the Teachers Group?
I'm a member of The Teachers Group. The Teachers Group is a community of people living around the world
— working around the world — mainly in humanitarian projects, supporting health,
education, food security for millions of people, and that's something I'm proud to be a part of.
USAgain is already firing back at KIRO-TV via its web-site, saying although it is a for-profit enterprise,
the company will have donated $1 million to charitable causes by the end of this year.
We can't verify that, but if the statement is true, USAgain might have another problem.
The Attorney General's office tells us if USAgain is engaging in
activity that would make it a commercial fundraiser, then it's operating outside the law.