Some Groups Claiming to Serve Vets Bilk Public Out of Millions, FTC Finds

The latest shutdown of a self-labeled veterans support organization comes against the backdrop of repeated warnings from the federal government, state attorneys general and watchdog groups to beware of groups who bilk the public out of millions by playing to the desire to help veterans.

On July 6, the “Put Vets First! PAC” filed a notice of termination with the Federal Election Commission amid allegations that the vast majority of the more than $4.8 million raised by the political action committee went for telemarketing and salaries, rather than to back veterans issues.

Two sister organizations of the PAC — the nonprofits Circle of Friends for American Veterans and the Center for American Homeless Veterans — also shut down their websites, the nonprofit Center for Public Integrity reported.

All three organizations were run by retired Army Maj. Brian Arthur Hampton and were the subject of warnings to donors two years ago from the St. Louis Better Business Bureau.

In a June 2017 statement, Michelle Corey, president and CEO of the St. Louis BBB, urged against contributing to Hampton's organizations.

“The high fundraising costs and questionable solicitations are significant issues,” Corey said. “Potential donors who are considering supporting this, or any organization with which they are not familiar, should learn exactly how their donations are being used.”

The organizations that closed down labeled themselves as nonprofit advocacy groups, yet little of their revenue — in one case just 5% — went to programs or causes to support veterans. Broadly speaking, the Federal Trade Commission finds monitoring groups that play on donors’ sympathies to veterans’ causes an ongoing challenge.

According to the FTC, some organizations are known to have teamed with unscrupulous telemarketers to appeal to donors by using heartrending yet bogus pleas.

In March, the FTC took action against American Veterans Foundation Inc., banning AVF and its founder and president Paul K. Monville, from soliciting any more charitable contributions under a settlement with the commission and the state of Florida.

The FTC charged AVF and Monville with “deceptively claiming that consumers' donations would be used for specific charitable purposes, including care packages for deployed service members, immediate assistance to veterans facing homelessness, and counseling.”

“In reality, the vast majority of consumers' contributions went to the telemarketers, employee compensation, and other overhead, and almost no money was spent on the programs described to donors,” the FTC said.

Telemarketers for AVF used scripts saying, “I'm sure you'd like to help the foundation in helping to prevent more homelessness among veterans and brighten the days of our American heroes,” according to the FTC.

“This fraudulent charity took in millions of dollars from generous donors who believed the funds would go to active military members and veterans,” Florida Attorney General Ashley Moody said in a statement. “Deceiving donors by exploiting the brave men and women who protect our country is disgraceful.”

In July 2018, as part of “Operation Donate With Honor,” the FTC joined with law enforcement officials and charity regulators nationwide in launching more than 100 actions against “fraudulent charities that con consumers by falsely promising their donations will help veterans and service members.”

One of the groups targeted was “Help the Vets Inc.,” which also went by the names American Disabled Veterans Foundation, Military Families of America, Veterans Emergency Blood Bank, and Vets Fighting Breast Cancer.

Under a series of settlements, Help the Vets Inc. and founder Neil G. “Paul” Paulson Sr. were banned from soliciting charitable contributions in Florida, California, Maryland, Minnesota, Ohio and Oregon “for falsely promising donors their contributions would help wounded and disabled veterans,” the FTC said.

A solicitation letter signed by Paulson said, “For thousands of disabled veterans who served in Iraq and Afghanistan, giving an arm and a leg isn't simply a figure of speech — it's a harsh reality. Your $10 gift will mean so much to a disabled veteran.”

However, the FTC's complaint said that HTV “did not help disabled veterans, and 95% of every donation was spent on fundraising, administrative expenses, and Paulson's salary and benefits.”

The settlement against HTV and Paulson imposed a judgment of $20.4 million, “which represents consumers' donations from 2014 through 2017, when HTV stopped operating,” the FTC said.

In announcing the July 2018 actions against the bogus groups, FTC Chairman Joe Simons said in a statement, “Americans are grateful for the sacrifices made by those who serve in the U.S. armed forces” but “sadly, some con artists prey on that gratitude, using lies and deception to line their own pockets.”

“In the process, they harm not only well-meaning donors, but also the many legitimate charities that actually do great work on behalf of veterans and service members,” Simons said.

The FTC, legitimate veterans service organizations, watchdog groups, the Better Business Bureau, states attorneys general, the American Association of Retired Persons (AARP) and others have repeatedly put out warnings to potential donors to check out the bona fides of groups claiming to help veterans that they don't immediately recognize.

In addition to warnings from the St. Louis Better Business Bureau on Hampton’s three charities, independent charity evaluator Charity Navigator issued an advisory voicing “moderate concern” over the Center for American Homeless Veterans and gave zero stars and a “low concern advisory” to Circle of Friends for American veterans, largely due to the ongoing investigations into the groups’ activities.

Consumers can avoid being targeted by fundraising telemarketers by asking callers to send written materials and refusing to donate anything by phone. The AARP has additional guidance on avoiding veterans charity scams.

The FTC also offers a video on veterans charity scams.

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Author: Richard Sisk

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