May 18, 2010

Oregon Attorney General John Kroger today announced three lawsuits and two settlements in a major initiative to crack down on non-profits and fundraisers that claim to help U.S. veterans but keep most of the money they raise.

Our society owes an immense debt to our veterans, said Attorney General Kroger. There are too many organizations that claim to be helping veterans, but are instead enriching themselves. We are going to stop this.

Settlements totaling $180,000 have been reached with Center Stage Attractions, a professional fundraising firm based in Florida that used a Salem, Ore., call center, and its client charity, The Veterans Fund. Center Stage was accused of making false statements to potential donors, including falsely claiming how donations would benefit veterans and sending false pledge invoices. The Veterans Fund allowed Center Stage to keep 80 percent of the money raised in its name and did little to monitor Center Stages conduct.

Center Stage and The Veterans Fund have both agreed to never solicit funds in Oregon again. Center Stage has agreed to pay $150,000 and The Veterans Fund agreed to pay $30,000 to resolve the Departments allegations.

The Oregon Department of Justice also filed three other lawsuits against groups soliciting donations for veterans.

The first of those lawsuits is against Veterans of Oregon & Members of the Community (VOMC) and its fundraiser, Associated Community Services (ACS). Although ACS has raised more than $500,000 on behalf of VOMC, little if any of the money benefited the homeless and hospitalized vets that donors were told they were helping.

ACS kept 80 percent of the money it raised. In addition to misleading donors, the defendants are charged with violating Oregons no-call law and breaching fiduciary duties associated with operating as a charity. VOMC is accused of using the small fraction of the money it received to pay the expenses of the head of the charity and others to travel around the state awarding medals.

Another lawsuit was filed against Community Support (CS), a large national fundraiser that is accused of violating settlements it had previously reached with Oregon, including violating the do-not-call rule and failing to clearly disclose its professional fundraising status to donors. CS typically keeps at least 80 percent of the money it raises for veterans and other charities.

The final lawsuit is against No Veterans Left Behind Association, an Oregon-based non-profit.

Since mid 2009, defendants and their paid solicitors set up booths in front of major retail stores in several Oregon counties, selling veterans-related gear and soliciting cash donations. They told store owners and shoppers that No Veterans Left Behind was an all-volunteer group that gave between 75 to 80 percent of its donated proceeds directly to needy veterans. In fact, as the lawsuit alleges, the persons who ran the organization kept at least 80% of the donations for their own use. At least $17,000 was allegedly donated and used improperly.

The Attorney General seeks, among other things, a temporary restraining order and a preliminary injunction to shut down No Veterans Left Behind and preserve what may be left of the donations and proceeds.