Federal and state authorities have put sham veteran charities on notice.
“I’m here to warn scam artists: Watch out. We’re investigating complaints. We will track you down, and in partnerships with our [state] attorneys general, we will shut you down,” said John Wobensmith, Maryland Secretary of State, during a news conference announcing the initiative that included other states’ attorneys general, the Federal Trade Commission, and the Better Business Bureau’s Wise Giving Alliance..
The FTC ― with law enforcement officials and charity regulators in 70 offices from every state, the District of Columbia, American Samoa, Guam and Puerto Rico ― announced “Operation Donate with Honor,” which includes the crackdown on sham charities, as well as an education campaign for potential donors. Officials announced more than 100 actions across the country.
FTC Chairman Joe Simons announced action against a charity, Help the Vets, Inc., which was run by Neil G. “Paul” Paulson, Sr., who is reportedly an Army veteran, according to his Guidestar charity profile, and according to an Internet Archive of Help The Vets’ website. His military service couldn’t be immediately confirmed. The Guidestar profile says the charity is closed.
Paulson and Help the Vets Inc. will be banned from soliciting charitable contributions under settlements with the FTC and the states of Florida, California, Maryland, Minnesota, Ohio and Oregon, for allegedly falsely promising donors their contributions would help wounded and disabled veterans. Officials alleged that Help the Vets collected more than $20 million from 2014 through 2017, and that 95 percent of those donations went to fundraising, administrative expenses and Paulson’s salary and benefits ... not to veterans.
Attorneys for Paulson and for Help the Vets Inc. declined to comment, they said, “because there is a lawsuit pending.”
Paulson also reportedly operated charities under the names of American Disabled Veterans Foundation, Veterans Fighting Breast Cancer, Vets Fighting Breast Cancer, Military Families of America and Veterans Emergency Blood Bank.
The FTC has also charged another charity operator, Travis Deloy Peterson, with using fake veterans charities and making millions of illegal robocalls to solicit donations of cars, boats and other property, claiming that the donations would go to veterans charities and that they were tax deductible. Instead, officials allege, he sold the items for his own benefit.
A federal court in Utah has issued a temporary restraining order prohibiting Peterson from making unlawful robocalls or engaging in misrepresentations about charitable donations, as the FTC moves ahead with its enforcement action. Peterson is accused of violating the FTC Act and the FTC’s telemarketing sales rule.
Attempts to reach Peterson were unsuccessful.
According to the FTC complaint, Peterson allegedly used the charity names Veterans of America, Vehicles for Veterans, Saving Our Soldiers, Donate your Car, Donate That Car, Act of Valor, and Medal of Honor.
The state enforcement actions involved charities seeking donations online, and by telemarketing, direct mail, door-to-door contacts, and at retail stores, falsely promising to help homeless and disabled veterans, to provide veterans with employment counseling, and to send care packages to service members.
“It’s the sad truth there are individuals and organizations that seek to take advantage of the genuine altruism of potential donors, and seek fraudulently to raise money on the backs of veterans to benefit themselves,” said Connecticut Attorney General George Jepsen.
That said, officials noted that the vast majority of charitable organizations do good and important work. The “Operation Donate with Honor:” campaign is providing resources to help donors find those charities that legitimately meet the needs the donor wants to help address.
As part of their education campaign, officials are urging potential donors to be aware that just because a charity’s name includes words such as “veteran” or “military,” it doesn’t mean the organization is legitimate. At www.ftc.gov/Charity, officials have provided materials on donating to charities that help veterans, those that help service members and their families, and donating through an online giving portal.
This isn’t the first time the FTC has addressed the problem.
In 2009, the FTC and officials in 49 states launched “Operation False Charity,” a crackdown on allegedly fraudulent telemarketers who claimed to help police, firefighters and veterans.