District, Maryland and Virginia permanently dissolve youth nonprofits after investigation into candy-sales scheme involving children

Two DMV-area nonprofits ordered dissolved after multistate probe

Two nonprofits that operated in the District of Columbia, Maryland, and Virginia have been permanently shut down under settlement agreements that bar their leadership from charitable fundraising and nonprofit management in the region. The organizations—Maryland Youth Club of America, Inc. and Virginia Youth Club of America, Inc.—were dissolved following a joint investigation by authorities in the District, Maryland, and Virginia.

The case centers on door-to-door candy sales involving school-aged children recruited from low-income neighborhoods, including areas of Southeast Washington. Investigators concluded the program relied on misrepresentations to consumers and did not deliver the youth benefits it advertised.

How the solicitation worked

The organizations represented themselves as youth-serving charities offering scholarships, enrichment activities, trips, educational support such as laptops, and part-time work opportunities. Children—described as middle-school and high-school aged—were transported to more affluent neighborhoods to sell candy door-to-door, and were instructed to tell residents their purchases would support programs for at-risk youth.

Investigators found evidence that the nonprofits failed to substantiate that children received promised benefits or compensation connected to the sales activity. The joint probe also identified misleading statements to consumers about how proceeds would be used.

Financial findings and record destruction allegations

Between 2018 and 2022, the two organizations collected more than $857,000 in gross candy sales, investigators said. Authorities also found evidence that charitable funds were diverted for personal benefit and that significant amounts of collected money could not be accounted for.

• Transfers totaling more than $23,000 were identified from a charity bank account to a personal CashApp account and to individuals and entities linked to the organization’s leadership.
• Additional spending was traced to out-of-state retail and service transactions inconsistent with documented charitable programming.
• Investigators said nonprofit financial records for multiple years were intentionally destroyed.

The settlement terms include permanent dissolution of both nonprofits and broad bans on charitable solicitation and nonprofit leadership roles for the founder and other affiliated officers and directors across the District, Maryland, and Virginia.

Penalties and restrictions imposed

Under the District’s settlement, the organizations must complete formal dissolution steps and provide documentation to regulators. The founder and other individuals associated with the nonprofits are permanently prohibited from operating or soliciting charitable donations in the District, and the founder is barred from serving in fiduciary roles in District nonprofits and trusts.

The agreement also requires payment of a $5,000 fine designated to support area nonprofits serving at-risk youth. Separate settlements in Maryland and Virginia impose parallel bans, including prohibitions on forming new charities, soliciting charitable contributions, or acting as a professional solicitor of charitable funds in those states.

What residents can take from the case

The enforcement action highlights a recurring consumer-protection issue: solicitations that use youth-focused messaging to encourage small, immediate purchases while obscuring how proceeds are handled. Regulators emphasized that nonprofits operating in the District are required to use funds to advance their stated missions and are prohibited from using charitable assets for private benefit.