SEATTLE -- A 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 U'SAgain 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 U'SAgain exposes an international company in some trouble right here in Washington.

Senior Counsel for the Attorney General's office, Shannon E. Smith, says U’SAgain is not properly licensed to collect donated clothes. She also says if U'SAgain is misrepresenting that they're a charity, they are also likely violating Washington's Consumer Protection Act.

U'SAgain employees recently approached the City of Sedro Woolley with a great sales pitch: place their red clothing-donation bin on government property and help a charity.

When Mayor Mike Anderson saw a KIRO Team 7 Investigation that showed U'SAgain was a for profit company, selling and shipping clothes to other countries, he ordered the U'SAgain bin removed.

Anderson told us, simply, “Yeah. I think it's misleading!”

He says U'SAgain never mentioned being a commercial company

“They didn't. I was under the impression it was for a non-profit. So we wouldn't have allowed it if it was for profit.”

Anderson also asked local businesses who may have also fallen for a false charity pitch to get rid of their bins, too.

Anderson didn't have to do much to convince Curtis Sowers, manager of Sedro Woolley True Value Hardware.

He says U'SAgain salespeople deceived him. This week, Sowers called for them to come get their red donation box.

Sowers: “I was approached by a gentleman saying that they had a place to donate clothing.”

KIRO producer: “They didn't tell you they were a for-profit company when they dropped this off?"
Sowers: "No. No. They didn't tell me, but I didn't ask. When I heard the word donation, I thought it was a good thing.”

Sowers handed Team 7 Investigators a copy of the brochure that U'SAgain left with him recently. Nowhere inside does it say this is a for-profit company, but it does make use of the word "charities."

“You would think if it’s being recycled, that means they are giving it to other people,” Linda MacKay told KIRO Team 7 Investigators.

MacKay runs a local daycare facility in Ballard. She says she agreed to allow a red bin on her property, free of charge, because U'SAgain employees told her "they helped non-profits."

“I feel misguided, considering that I care about giving to other people that - I work hard around here to teach children and families about respect and truthfulness, and it's pretty sad when someone has misguided you in that direction.”

And that's a serious matter to Assistant Attorney General Shannon Smith.

She told Team 7 Investigators during an on-camera interview, “If the organization misrepresents to the location owner or anybody else that the organization is a charity, then that's unlawful.”

U'SAgain 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. We're trying to do something good for the environment, helping divert 10 million tons of clothing that go to the landfill.”

But where does the money from the sale of clothes go?

After some questioning from Team 7 Investigators, Wallander admitted that he is not the majority owner of U'SAgain.

We discovered the majority stakeholder is a Caribbean-based holding company called Fairbank, Cooper, and Lyle.

European court records show, Fairbank, Cooper, and 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 with the Teachers Group, but say they have nothing to do with criminal allegations in Denmark.

Halsne: "You're OK with saying you're a member of the teachers group?"
Wallander: “I am 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 and food for millions of people and that’s something I'm proud to be a part of. That doesn't have bearing on U’SAgain, which is my business -and it doesn't have any bearing on people who donate to us.”

U'SAgain is firing back at KIRO-TV via its Web site, saying that 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, U'SAgain might have another problem.

The Attorney General's office says, "If U'SAgain is engaging in activity that would make it a commercial fundraiser, then its operating outside the law."

If you feel like you've been deceived by U'SAgain, the Attorney General's office would like to hear from you or your business. Contact the A.G.'s Office here.