A Florida-based charity promising to help wounded veterans by soliciting $11 million in donations has been banned from operating, according to the Federal Trade Commission (FTC). Regulators found nearly all of the funds received were spent on fundraising, expenses, and the founder's salary and benefits.
Help the Vets Inc. and other groups
, have been targeted by the FTC and law enforcement as sham charities “that con people by falsely promising donations will help veterans,” according to an FTC press release. It's part of a larger FTC crackdown, in which
more than 100 actions have been taken against sham charities in every state, the District of Columbia, American Samoa, Guam and Puerto Rico.
“Americans are grateful for the sacrifices made by those who serve in the U.S. armed forces,” FTC Chair Joe Simons said in the press release. “Sadly, some con artists prey on that gratitude, using lies and deception to line their own pockets.”
[Related reading: 6 Considerations Before Making a Donation]
In conjunction with the crackdown, the FTC kicked off “
Operation Donate with Honor” to educate people on charitable solicitation fraud and to identify legitimate charities. As an example, the FTC listed nine charities that it says have been sued for lying to donors: American Disabled Veterans Foundation; National Vietnam Veterans Foundation; Healing American Heroes Inc.; Veterans Fighting Breast Cancer; Military Families of America; VietNow National Headquarters Inc.; Foundation for American Veterans, Inc.; Healing Heroes Network; and Help the Vets, Inc. American Disabled Veterans Foundation and Veterans Fighting Breast Cancer are other names for Help the Vets.
Under a settlement with the FTC and the states of Florida, California, Maryland, Minnesota, Ohio and Oregon, Help the Vets Inc. has been banned from soliciting charitable donations.
Neil G. “Paul” Paulson Sr., an officer of the charity, urged people to donate to the charity, but it was found that 95 percent of funds received went to fundraising, administrative expenses and his salary and benefits.
Although a monetary judgment of $20.4 million was awarded to the FTC and several states' attorneys general,
the settlement order partially suspends that award. Instead, Help the Vets must pay $72,000, which will be given to other charities. Additionally, Paulson must pay $1.75 million. He also must destroy all donor lists and notify Help the Vets fundraisers to do so, according to court documents.
Another Operation Donate with Honor scam reported Travis Deloy Peterson allegedly used fake veterans' charities and illegal robocalls to get people to donate cards, boats, and other valuable items, which he then sold for his own benefit, according to the FTC.
Peterson used various names for his operation: Veterans of America, Vehicles for Veterans LLC, Saving Our Soldiers, Donate Your Car, Donate That Car LLC, Act of Valor and Medal of Honor. He allegedly made millions of robocalls asking people to donate cars, watercraft, real estate, and timeshares, which the FTC said he falsely claimed would go to veterans' charities and were tax deductible.
Peterson was charged with violating the FTC Act and the FTC's Telemarketing Sales Rule. A federal court issued a temporary restraining order prohibiting him from making unlawful robocalls or engaging in misrepresentations about charitable donations while the FTC's enforcement action is pending.
In other actions noted by the FTC, a judge in Iowa found a woman from the Florida-based Health Heroes Network used misleading sweepstakes mailings to receive more than $2.4 million in donations, but only $196,000 in grants was given to veterans; and an Ohio woman was ordered to repay $418,000 she took from a local chapter she started of Operation Homefront, a Texas-based charity that helps veterans, which she spent on restaurant meals, hair salon services and car repairs. The charter of that chapter was revoked in 2012.
The crackdown and educational campaign were planned by the FTC with the National Association of State Charity Officials.
Connecticut Attorney General George Jepsen said state attorney generals routinely come together on matters of national importance to enforce, educate and advocate for residents. “Charities fraud of any kind is abhorrent, and veterans' charities fraud is especially upsetting,” he said in a news release. “This campaign will offer important resources to help donors identify charities that match their own values.”
“Just because a charity has a legitimate-sounding name or uses pictures of people in uniform, does not necessarily mean it will support the cause it advertises. Doing a little research will ensure your donation will go where you intended,” said Mike Turner, vice president of development, Military Officers Association of America. He offers
a list of tips to protect your giving.
Amanda Dolasinski is MOAA's staff writer. She can be reached at
email@example.com. Follow her on Twitter @AmandaMOAA.