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Subscribe to RSSCalifornia's attorney general sued a major veterans charity on Thursday, accusing the officers and directors of engaging in self-dealing and fraudulent fundraising, and paying excessive compensation.
The suit seeks to remove the officers and recover $4.3 million that it claims was improperly diverted from Help Hospitalized Veterans. The charity in Winchester, Calif., was founded in 1971 to provide therapeutic arts and craft activities for patients receiving care in Veterans Affairs hospitals, military hospitals and state veterans homes, according to its website.
"What makes this case so egregious is our military servicemen and women are willing to sacrifice their lives for our country and for us as Americans, and when they are in need of help and support we should give it to them and not manipulate charitable people and then personally profit from them," state Attorney General Kamala D. Harris told The Associated Press.
The charity raised more than $108 million in contributions over the last three years, it said in tax filings and on its website, with 33.8 percent going toward its programs. The suit alleges that it filed "false and misleading" tax returns that inflated program expenses and reduced its actual fundraising costs to "less than 30 percent."
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Based on its reported fundraising, Help Hospitalized Veterans ranks among the top 1 percent of charities in the United States. The group once was endorsed by retired Gen. Tommy Franks, who later distanced himself from the charity.
At the same time, it has ranked for more than a decade at the bottom of lists by watchdog groups that rate nonprofit organizations based on their financial management and abilities to use most of their donations toward their causes. CharityWatch says about 35 percent of Help Hospitalized Veterans' funds go toward programs to aid veterans. The recommended standard is about 65 percent.
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The California lawsuit said the charity's president, Michael Lynch, received excessive compensation of $900,000.
The complaint said that former president Roger Chapin, who during a 2008 U.S. congressional hearing about his management of the charity called himself the "the most honest person in this room," retired the following year with a nearly $2 million pension plan. The suit alleges that the group's board members retroactively spiked Chapin's earnings to justify the inflated amount for his retirement.
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Chapin is also accused of diverting the charity's funds through a separate charity called Conquer Cancer and Alzheimer's Now.
Chapin was accused of paying himself more than $493,000 from the cancer charity. That charity received the money from American Target Advertising, a fund-raising firm run by conservative political fundraiser Richard Viguerie, who is not named in the suit.
More charity news in NBCNews.com's Giving section
'It's surprising it's taken this long'
Viguerie, who is identified in the suit as Chapin's long-time friend, is said to have deposited funds into the account of Conquer Cancer and Alzheimer's Now from $800,000 that Help Hospitalized Veterans had lent ATA and was not repaid.
"It's surprising it's taken this long for something to happen with all the serious problems that were brought up in the (2008 congressional) hearing," said Daniel Borochoff of CharityWatch, which monitors the financial records of nonprofit groups. "What's more, this information did not filter down to donors."
But he added: "Mr. Chapin spun a complex web to confuse well-intentioned donors and make it difficult for regulators to untangle."
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Calls to Help Hospitalized Veterans and Lynch's office were not returned. Viguerie did not immediately respond to phone and email messages seeking comment. Reuters was unable to contact Chapin on Thursday evening.
Borochoff said the complaint sends a strong message to unscrupulous charities.
"It's about $2 billion that is raised on behalf of veterans charity, and unfortunately a lot of that's being wasted and not being used to help our veterans," Borochoff said. "It's really ludicrous what's going on. It's out of control, there's such great waste. It's a national disgrace that people are allowed to exploit veterans for their own personal financial benefit, or benefit of their company."
More Southern California coverage from NBCLosAngeles.com
According to Charity Navigator, a third of the 50 military veterans charities it evaluates rate poorly and 20 percent either got a zero for their financial management or a "donor advisory" tag, which indicates the organizations are being investigated by authorities.
That compares to 2 percent for other kinds of charities, said Ken Berger, the president of the Washington-based group that evaluates 5,500 charities.
Reuters and The Associated Press contributed to this report.
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What is to happen next in the USA? The right wing movement says we need smaller government, and wants to cut money used for domestic social programs. I have heard many of their pundits extole the virtues of churches and charities being able to handle our needs. I've also read stories and comments like this, and realize that in today's harsh economy where our middle class' standard of living is going down and a lot are just treading water trying to support their own families...donations are being questioned (about time) if they can still be made at all. Seems those charities officers are the only one's making enough money to give to churches and charities...especially one's that spend so little on actually doing charatible work.
Ryan proposed budget: cut 13% out of the Veterans Affairs Budget, there you go folks, Veterans have earned every benefit available but some in Congress don't believe that to be the case.
Parrot: What are you personally willing to give up to give the VA more money. And please no platitudes about cutting waste, etc.
Nukeman -
I'm willing to give up refurbishing tanks the brass doesn't want, I'm willing to close and consolidate more bases across the US and around the world. I'm willing to downsize the military even more, so we have less people to put downrange in harm's way. I'm willing to cut back on domestic homeland security. Why do we need unarmed drones in our skies?
I'm willing to discuss legalizing dope and prostitution and downsizing the police forces who chase those goofballs today.
Chuckles, you didn't answer the question (but nice try). The question was, What are YOU personally willing to do without? All the things you quote are things you want someone else to give up or do differently. Here's an example. I took an unpaid day off to go volunteer at a VA hospital.
Nuke, how about I am willing to give up Congressional pay raises, that should make up for VA Ryan shortfall, or take time to drive another Vet to appointments, or feed a few, or baby-sit, or talk to a Vet as if he/she is a worthwhile person with a real life and death story to tell.
I have a giant problem with Private Job Creators that won't hire Vets. because they are somehow damaged goods. Despicable. die for us, protect us, thank you for your service, all platitudes until it gets down to employment then the Vet isn't worth the time of day, shameful. "Wounded Warriors" does a pretty decent job.
When my nephew came home from his second tour in Afghanistan, I took him out to lunch. At the table next to us, a middle aged couple was discussing with friends the fact that they had just inherited a small amount of money and were trying to decide which veterans' charity to give it to. The friend of the couple suggested Help Hospitalized Veterans (the above mentioned scammers). When my nephew leaned over to them and suggested that a local veterans assistance group would be a better organization to give to, the couple and their friends were aghast. They looked my nephew up and down, noticing his wrinkled civilian clothes, multiple tattoos and shaved head and replied, "mind your own damned business, punk." America, open your eyes and look around you. We are veterans and we are sitting right next to you. Want to give? Give locally!
Amen. And that's not just for veteran's charities that goes for ALL charities. Semper Fi.
Calm down, people. There are many good charities with low overhead, providing goods and services to the people they are supposed to be helping. Follow Sammy's suggestion and check out which ones are winners and which are scammers. I review my charities online once a year.
A charity that isn't really helping anyone except themselves. Shocking!
As a retired veteran I give any donations I make directly to the local VA Medical center where it is used where it is intended. There are no volunteer groups that do not have some expenses. The way I contribute 100 per cent of my donation goes where I want it to go, helping hospitalized veterans. Although I do support the Wounded Warrior Program that is more with my time than my finances.
It's nice to hear about something decent coming out of California besides food ... such a beautiful state, such an unfortunate citizenry.
Find a U.S. Serviceman/woman or veteran / veterans on your own. See for yourself who're very deserving and send 100% of your money or goods anonymously !
If they're guilty, prosecute to the fullest extent, get the money returned if you need to take the shirt from their backs, and lock 'em up.....how DARE they try to profit from our servicemen and women.
If you are looking to donate to a charity, try UMCOR. Nicely rated, but they don't specifically help vets. They are more disaster / crises relief folks.
When it was safer in Mexico, used to go down to Nuevo Laredo for weekends from San Antonio. I would always hang out with the expats, usually at some seedy bars. I was always amazed at the number of retired military personnel down there running some type of "veterans charity" scam. They would let me listen in to there sucker lines while we were enjoying our cerveza and senoritas. It's sad but a lot of the charities are run by veterans solely to support themselves without any thought toward helping others. If you really want to help, volunteer at a veterans hospital rehab center or career training program. Most dollars sent to veterans charities with great names are a total waste of money.
Does anybody know if there is a list of charities for veterans that show which ones are legit? I have been contributing to one for years and I am afraid that it may now have been a waste and a scam.
Sometimes I feel bad, but as much as I would like to donate to a good cause I am uncomfortable donating money. I will donate clothes to Salvation Army (and other thrift stores), food to a shelter, blood to Red Cross, and time to do community service, but money is something that doesn't get donated by me.
Unless I can directly donate to the person that needs it, I will keep my money and hope that non-profit organizations actually live up to their label.
By the way many V.A. medical centers accept donations for clothes, books, magazines, video, etc., through their volunteer services departments.
Most charities are SCAMS. Look at his logically. There are well over one million charities in the U.S.. People know if they start a charity, they will also profit big time. If people knew they would only make a small amount of money, there would only be a few charities, not over a million.
If you ran a charity, how much compensation should you get? The President of the U.S. gets $400,000 plus a $50,000 expense account. And his retirement is only $200,000. Why should the person who runs this charity make $900,000 and the retired guy get $2mil retirement. To me, they are thieves !!!
Time to crack down hard on scammers. Many of us have 80+ year old parents getting called and having scammers there or at their door on foot trying to steal identities, get their credit card or bank/checking account numbers or sell them worthless things for high prices. Just think, we will be there in 10 or 20 years at the mercy of these scammers so now is the time to lock them up and throw away the keys, make examples of these types that never existed before at this dangerous of level to wipe out families and prey on older folks, hard tough long sentences and big lawsuits needed to enforce ethics and morality again.
There are so many organizations to help veterans. I get calls from my town, state, wounded vets, foreign vets...hard to figure which ones are crooks. It is sickening that there are theives that would exploit veterans.
While they are at it, they should look at ASPCA and HSUS. Same deal with only 30 percent going to actually helping animals and the rest going towards "lobbying" and other "costs"
Lobbying is a serious cost. Major corporations are willing to spend billions of dollars also lobbying for anti-animal rights reasons.
Check out Red Cross. Their salaries and perks might make the others look like small potatoes.
Charities should be held to their word, and if they don't do as they say, then they should be prosecuted just like any other criminal. Our veterans risk their lives and the welfare of their families daily and should NEVER be taken advantage of. I'am a disabled veteran and have never asked for a dime, just because I know their are more deserving veterans out there. These people running these charities seem to have only their own greed in mind. I agree that it's a business and some should be paid for their efforts, but lets get real, how hard is it to dish out money to those deserving. The staff of these organizations should be minimal and those that hire family and friends to steal wages from the organization should definately be prosecuted for being greedy and the thiefs that they are. I hope that this will bring out all the charities that are scammers and that way people won't give $$$$ to them. I feel that only the legit ones then will survive. The main think is to prosecute the bad ones, so that in the future people will think before trying to scam the needy, giving and caring citizens.
How much does the CEO of Goodwill get? I know the workers of Goodwill get a Meager salary.
I just want to take a moment to point out, that both Goodwill and Salvation Army have work programs. They are two of only a handful of groups really trying to help the chronically unemployed.
Unfortunately, it is the greed of a few slimeballs that continue to erode our trust in the TRUE charitable causes that do help others in need, instead of lining their own pockets. I also now will only donate to the Salvation Army and donate directly to a facility otherwise.. no riches from me lowlifes!!!
can we revamp this society starting with this really easy issue. DO AWAY WITH BIG MONEY CHARITIES. I am a business owner, and i know only the smartest most cunning business men open up non-profit organizations. Thats where all the money is!
Just like the welfare for animals. You can't trust anyone with money when its meant for others in need..
This guy should be f...ing hanged as a coward and traitor, period.
Why am I not surprised by this?
i give all my donations to my church THE CHURCH OF JESUS CHRIST OF LATTER DAY SAINTS AKA MORMONS. NO PAID EMPLOYEES!. all callings and work and supplies are donated to take care of the unfortunate. in every disaster you can check the records we are 9one of the first there to help at no charge.