New Jersey's attorney general says the state is suing 40-year-old Thomas Scalgione and 66-year-old Mark Anthony Niemczyk, who appeared at memorial events and solicited money.
They said the donations were for family members of 9/11 victims, but investigators say they kept all the money and don't even have a charity.
The lawsuit also alleges that the pair - who both have criminal records - failed to register the charity as required by state law.
The two men have driven throughout the state in a pickup truck painted with the names of first responders who died in the terrorist attacks.
Scaglione denied the allegations, telling the Asbury Park Press that he and Niemczyk operate "a legitimate group" and will fight to clear their names.
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