Fund-Raiser Avoids Contempt Charge : Charities: Judge finds no willful violation by group of a prior court order. Administrator had failed to place funds in a blocked trust account.

BELLFLOWER —  A judge has dismissed a prosecutor’s bid to impose contempt charges on the administrator of a a Glendale fund-raising group that was run out of a telephone “boiler” room in Bellflower. Administrator Frank E. Burford had been accused of financial misconduct.

Los Angeles Superior Court Judge Stephen O’Neil found Friday that Burford had committed “no willful violation” when he failed to place American Veterans Committee funds in a frozen trust account, as another judge had ordered in February, 1991.

Burford set up such a blocked account a few days before Friday’s hearing, satisfying the previous court order, attorneys in the case said.

O’Neil ruled that “he couldn’t find to a moral certainty that Mr. Burford was not telling the truth when he said he didn’t know what a blocked trust account was” before he was threatened with the contempt charge, said Deputy California Atty. Gen. William S. Abbey, who had sought the contempt charges.

American Veterans Committee, headquartered at Burford’s Glendale accounting office, was shut down in early 1991 after state officials alleged that the group had used illegal fund-raising tactics. The group’s solicitors in Bellflower had told donors that their gifts were tax-deductible, even though the group had lost its tax-exempt status, investigators alleged.

Last month, Abbey asked O’Neil to hold Burford in contempt, which could have led to a fine of $1,000 and up to five days in jail for each of the counts alleged. The state prosecutor asserted that Burford violated last year’s court orders by spending more than a judge had authorized for outstanding bills, by moving some of the organization’s funds into his personal business account and by failing to set up the blocked trust account.

Although the contempt application was dismissed, Abbey said he believes the legal move showed Burford that his actions are still being monitored by the government.

“If he’s not on notice now, the only thing that will put him on notice is a nuclear device,” the prosecutor said.

But Burford’s attorney, Kenneth I. Gross, said O’Neil’s ruling determined that the Glendale businessman had not violated the terms of the court order, except for the trust fund issue, which was corrected.

“We feel the attorney general is being a little bit nasty, because some of the allegations in the contempt application just weren’t true,” the lawyer said.

Gross said his client has spent $35,000 out of his own pocket to cover ongoing American Veterans Committee expenses. He said Burford is providing state officials with the committee’s financial records so that the organization can regain its tax-exempt status and begin raising funds again.

The organization said it has donated to various groups that aid veterans, blind children and battered women. During the fiscal year ending Aug. 31, 1989, the group took in more than $400,000 but donated less than 5% of this to such charities, according to state records.

The Glendale group is the target of a lawsuit filed by an older national organization, also called American Veterans Committee, which claims its name was used improperly to raise funds. The Glendale group recently changed its name to the Southern California Assn. of Charities.