Am. Fork charity loses its license

A Utah charity whose fired president is accused of cheating hundreds of public schools across the country on fitness gear lost its state license to solicit donations Monday.

The revocation was the latest blow dealt to the embattled National School Fitness Foundation, which has been trying to save its image after accusations that its former leader bilked the schools in a pyramid scheme.

"It's fairly safe to say we would have great difficulty (restoring the license) given what we're finding out," state Division of Consumer Protection director Francine A. Giani said.

Charity president Cameron J. Lewis, fired late last month, had arranged to sell $77.5 million in stationary bicycles, weight machines, treadmills and other equipment to more than 600 schools in 20 states. He promised to reimburse them with money from government grants or private donations but stopped all payments in April, blaming an investigation in Minnesota.

That state's attorney general has accused Lewis of operating a pyramid scheme by using money from newly enlisted schools -- not grants or donations -- to make token reimbursements to schools that signed up early to buy or lease the equipment.

The American Fork-based foundation filed for bankruptcy reorganization June 1, saying it could no longer afford to reimburse any schools, which court papers show are owed as much as $340,000 each.

As president, Lewis was receiving a $317,358 salary from the nonprofit foundation.

"I think the lavish lifestyle that has been uncovered is, frankly, disgusting," Giani said. "If that has caused the charity to take advantage of these schools, I am more repulsed than ever."

An order revoking the charity's solicitation license cites a Minnesota judge's finding that probable cause exists to believe federal mail and wire fraud had been committed in the case.

The Utah order also cited a March renewal application filed by the foundation in which it answered "no" to a question of whether anyone within the charity had been convicted of a crime involving "moral turpitude." At that time, board member Martin Arnoldini had a conviction for his role in an unrelated tax-avoidance scheme.

The NSFF said Monday that it learned of Arnoldini's conviction in April, after it made the application, and said it had no reason to suspect Arnoldini's criminal background.

The foundation said last week that it fired Lewis and revamped its board of directors. The group also filed a complaint in bankruptcy court alleging Lewis and his father misappropriated about $5 million from the foundation.

The complaint claimed Lewis used the charity to buy himself a small airplane and finish a half-million-dollar house in Highland, among other expenses. The group said Lewis promised to pay back the charity but hasn't done so.

The board of directors' original four members, which included Cameron Lewis' father, have resigned. Arnoldini left after revealing his felony conviction.

The foundation is restructuring and trying to salvage its mission of promoting fitness in the nation's schools.

"Our hope is to resume our fund-raising efforts on behalf of schools and continue to better the lives of America's youth," said Jeffery Peterson, NSFF president.

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