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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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Leave a Comment:
Just like the welfare for animals in need. You can't trust anyone with monies for ones in need , now again the Vets suffer..
How low can these $#@!@#$^$@!$% get. This is just another reason that I give Zip, Nada, Nothing, Zilch, Zero, to ANY Charity. Because I know that this kind of Crap is going on. And they Should DEMAND that this guy Roger Chapman give Back that Two Million Dollar Pension. This is Bull S---.
There are many ways that conservative types scam the country and people. The Banksters who lose money and receive tax-payer funds;the CEOs who lose money but rake in ginomous salaries; the myriad of charit organizations that operate tax-free but are still only able to use less than 50% of how much they raise for the cause. What a scam.
Someone said "who is California to decide what is excessive salaries." WELL HERE IS A HINT. When you are collecting money in the name of Veterans and paying yourself 1 million dollars for the priviledge, YOU ARE A THIEF. They knw it too. That's why their books are not transparent. They are thieves. The state should confiscate their funds and give it to the Veterans Administration.
4LUV:
Yeah,
"Someone said "who is California to decide what is excessive salaries." WELL HERE IS A HINT. When you are collecting money in the name of Veterans and paying yourself 1 million dollars for the priviledge, YOU ARE A THIEF"
It was the back on page 1. I think it is the CEO himself who posted that. If you click on his newsvine homepage,
it ain't the only stupid thing he says.
I am careful about my charitable donations. As a vet, I lean toward Vet organizations.
Sick in the pit of my stomach.....I have donated the these POS's. Thank god not much.
I volunteer at our local food bank and am constantly reminded that good, hard working people are suffering through no fault of their own. Politicians who belittle those who are in need as being lazy scofflaws should be ashamed of themselves.
Ironically, veterans who have left the service after serving multiple tours in Iraq and Afghanistan are more and more frequent users of our local food bank. It is disgusting and embarrassing that those who have served are standing in line for a box of foodstuffs.
"Charities" that prey on the generosity of Americans should be called out publicly and charged with fraud.
I am also just floored at how long it has taken to catch them, and if the collected 108 million last year, and 65% is standard amount that should be going to the Vets they should take homes cars what ever to bring back the other 30% to these vet's. I understand it requires a pay check to work full time on these charity's, but just like so many CEO and board members in this country they find themselves worth way more than they are. But I think that the amount being asked to be return is as bad as they are in taking it. It is time for goverment to protect charities, because 35% is more than enough for operation cost.
if these people really did this, first shame on them, second, the money should all be repaid, if they cant, make them work at hard labor to pay it back, and also to pay for thier own keep.. when are you left wing liberals going to wakeup and understand how much of our economy you are pissing away??? its time for yall to tighten your belts and realize that not everything can be politically correct, a toad is still a toad, no matter how many times you kiss him! ! ! ! ! !
................ and the U.S. swirls closer and closer to the drain. How is this stuff permitted to happen? Are morals obsolete??
No, SHIL,
Morals aren't obsolete. Unfortunately, it is those who make it appear so who get all the coverage.
Another crime perpetrated against the Veterans of this country.The congress should investigate this and the for Profit colleges as they are in the business of ripping off our Veterans,with manipulated costs and inferior course criteria,Oh,BTW ,Mitt's one Son is in the Lobbying business for this industry,is it a wonder Mitt's all for less regulations..........
Why isn't the Justice Department investigating this?
Hence the words "Charity Organizations". All these "Charity Organizations" have CEO or administrators walking away with millions. Red Cross, Salvation ARmy included. Glad to see it put in the spotlight again. Charity means charity not lining your pockets or your friends pockets.
How much should someone be paid to run a charity? Maybe $$$ like police chiefs and public workers get paid in Cali.
PHIL......God forbid "paid like public workers in CA"
Yes, all cops are underpaid. Google San Diego Employee pension plan and see why we, here, are in such debt.
but agreed, there should be oversight and EXECUTIVE COMPENSATION should be public information.
I have always thrown any charity with admin expenses over 10% off my list.
Unfortunately, I donated to this one. How did I miss that?
There are sources for charity expense info thru the states.
No, not all are underpaid. A point of confusion here, which oddly remain obscure, is that high-end public administrators, including police chiefs, do get paid too much. You are right about the rest of the public workers.
If true, this is despicable! That being said, why are we just hearing about this now. Why not at the very beginning?
My personal opinion is that those involved in this dispicable scam should be taken out into the middle of a sports arena and shot, being televised on national television! Only wound them and let them slowly bleed to death! Scum like that don't deserve to walk in the same country as REAL men and woman...our military veterans.
They are on the level of Jane the Hanoi Whore.
Veteran 1965-85, in-country Viet Nam combat vet 1966 & 1967
Thanx for your service at a time nobody honored you.
The minute I read "Hanoi Jane" I knew you were a NamVet. Haven't heard for a while.
Retired Corpsman, here. Thanx.
Most "charities" are self-perpetuating organizations. Those in "health" related areas are connected to pharmaceutical or medical establishments and therefore have no intention of finding real cures for the condition for which they purport to address. Others use originally well-intended purposes to enrich themselves. My daughter once worked at the Salvation Army SE headquarters in Atlanta. She was appalled at the mismanagement by the upper echelon of their funds. Don't blame the volunteers manning the kettle; they are just the facade for the organization, and are good people who believe they are working for a spiritual purpose. When management takes a hefty portion of donated funds, something is amiss.
Also, the health-related charities would do well to follow the money trail of their research funds.
Hi Smokein youreyes, how can you put Mitt's son into this crime against the veterans of this country. There is no logic in the way that you connected the two. The question that I have that now that this mess is in the open, where is the Eric Holder, head of the Justice Department, how about the commander in chief of the armed services is he going to put the Justice Department on this?
Here you sit blaming a fund raiser, you really do have smoke in your eyes. The only thing that you were almost correct on was the comment about congress, however they are limited on what they can do, ask Mr. Holder.
he may well have been the most honest man in the room...sad to say
these charity's and politicians....they are all con artists.....nasty rabid squirrels hoarding and stealing
Oh boy, this is real news. Charities steal your money.... Oh No!! This is the new U.S. of America, where 87% of the people steal from and lie to one another. As usual it starts at the top. Thanks Pres for your total lack of any leadership. You think it's bad now? You ain't seen nothing yet. Have a nice day.
You think this is a scam have you hear about the money the people running for office are raising. Vote them all out on Nov. 6.
This is why it is so naive and ridiculous when libertarians claim that charity can replace welfare or care for the uninsured. For one, the costs would never be met by charitable giving, and two because charities have as much bureacratic and administrative costs and corruption as any government program.
The solution is a structural change. Charity is just a bandaid.
Why not do the same with so called "non-profit" organizations that pay ridiculous salaries to top dogs...Rev. Jesse Jackson and Rainbow PUSH Coalition come to mind.
Just another instance of crooks taking advantage of Veterans. It amazes me what some will do for the almighty dollar. They would take from us, Veterans, those who unselfishly gave of ourselves to protect the country and it's people so that they could live free. What a shame. Jail time is just not enough for these people.
What has the Obama Administration done for Vets?
Answers with links provided and devoid of viral hate emails:
--Along with Congressional Democrats, not only reauthorized families of fallen soldiers to be able to visit when the body arrives at Dover AFB, but also provided funding for it. Ended the media blackout on coverage of the return of fallen soldiers. http://nyti.ms/glqN66 http://bbc.in/gWSSkA
--Funded Department of Veterans Affairs (VA) with an extra $1.4 billion to improve veterans’ services. http://1.usa.gov/huhqfo
--Provided active combat troops with better body armor. http://bit.ly/hzSv2h
--Created Joint Virtual Lifetime Electronic Record program for military personnel, in order to improve the quality of their medical care. http://1.usa.gov/f4yaxW
--Put an end to the Bush-era stop-loss policy that kept soldiers in Iraq/Afghanistan beyond their enlistment date. http://nyti.ms/e2YQ7Q
--Along with Congressional Democrats, supported and signed Veterans Health Care Budget Reform and Transparency Act, which made more money available to enable better medical care for veterans. http://1.usa.gov/fN4ur1
--Along with Congressional Democrats, ushered through largest spending increase in 30 years for Department of Veterans Affairs, with money to go to improved medical facilities, and to assist states in acquiring or constructing state nursing homes and extended care facilities. http://1.usa.gov/gY8O3x
--Created the Green Vet Initiative, which provided special funding to the Labor Department to provide veterans with training in green jobs. http://bit.ly/epwUQY
--Initiated and signed a recruitment and employment plan to get more veterans into government jobs. http://bit.ly/b48coi
--Oversaw a $4.6 billion expansion of the Veterans Administration budget to pay for more mental health professionals. http://bit.ly/gjzTxX
--Signed the Military Spouses Residency Relief Act, which ensures that spouses of military personnel who are forced to move because their spouse is posted for military duty will be able to avoid state taxes in their temporary residence. http://bit.ly/1Gh0NX
its calif what would you expect......
Glad you don't like us, Joe. Stay out!!! Paradise is getting too crowded.
Native Californian from Iowa
It's about time someone took on these crooked charities.This is just the tip of the iceburg.My 92 yr old mom gets junk mail from people like this every day of the yr.BS and BS.To many crooks ripping off people.
Just stop donating. If your motivation is to do good, my husband and I would find a needy local family and buy groceries, etc. Food pantry, local organizations that buy needy children toys and clothes for Christmas, or a local cancer patient that needs help with medical expenses are all good. If your motivation is a tax write off then a small local church that tries to instill morals and value in the community is beneficial.
My facts may not be correct but isn't there laws in place that state theft over $5000.00 (?) is a federal offense. This sounds like prison time to me.
How does paying for the electricity of a church help the poor? They need to be fed, not preached to.
Years ago, I completely stopped giving to charities who only allow contributions in the form of money.
I give my time and/or contribute foodstuffs or clothing. Nothing more.
I WILL NOT give money to any organization that has an organization chart that identifies positions such as CEO, CFO, followed by a slew of managers for a myriad of alleged tasks.
In this particular example, more than $0.67 of every dollar goes to someone in the organization, NOT the intended recipient.
This is completely mis-representation of the charity and it needs to have the entire top level removed as well as a thorough review of the cost of the service organization because it will likely be realized that there are too many managers and not enough "front-line" people.