The state has filed suit against a Sparta pair who allegedly created a Hurricane Sandy relief fund without properly registering it as a charity, and “unlawfully misled the public,” Attorney General Jeffrey Chiesa said.

The suit claims John Sandberg and Christina Terraccino diverted public donated funds designed for Hurricane Sandy relief into their own personal accounts, misleading donors with false claims about the ways donations would be used, falsely claiming that donations are tax-deductible, and otherwise deceiving the public in violation of New Jersey’s charity registration and consumer protection laws.

As of January, the Hurricane Sandy Relief Foundation, created by the duo, raised more than $631,000 in monetary donations from at least 1,999 persons, the suit alleges. Of those funds, less than 1-percent of that amount has been disbursed to Sandy-related causes, Chiesa said.

“New Jersey’s law keeps charities honest, by requiring them to register with the State and provide clear, truthful information when soliciting donations from the public,” Chiesa said in the complaint. “This organization told the State it does not pay its executives, but our investigators found a paper trail reflecting thousands of dollars being transferred into the individual defendants’ personal bank accounts. Meanwhile, less than one percent of the money they raised, has allegedly been paid out to help victims of Sandy.”

The Division of Consumer Affairs first caught wind of the purported foundation in late December and immediately began an investigation, the suit said.

A first violation of consumer fraud, according to the Charitable Registration and Investigation Act, is subject to a civil penalty of up to $10,000. Subsequent violations are subject to penalties of up to $20,000. Every solicitation of donations made while the foundation is not registered is considered a separate violation, the suit says.

Financial records obtained by the state show more than $13,000 in public donations have been moved from the foundation’s account into Sandberg’s and Terracino’s personal PayPal accounts. Records also showed Terracino used those funds to pay for personal expenses, including $8,000 in payments to a credit card company.

More than $4,500 was taken from the foundation’s donations and paid toward Apple Online, Vivo Tapas Lounge in Newark, supermarkets, Christmas Tree Shops and a home heating oil delivery service to a Sparta home where the pair reside, the suit claims.