Schuette Issues Cease and Desist to Allegedly Deceptive Veterans Charity
released on September 28, 2017
found in newsletter: September 2017
LANSING – Michigan Attorney General Bill Schuette today announced a Notice of Intended Action and Cease and Desist Order against American Veterans Foundation of Sarasota, Florida for over two hundred thousand violations of the Charitable Organizations and Solicitations Act. Violations included deceptive solicitations and diversion of funds raised to other purposes. Over 12,000 donations – totaling more than $250,000 – were received from Michigan donors.
“This is the third deceptive veterans charity this year that my office has acted against,” said Schuette. “As I’ve said before: our troops deserve better; our citizens deserve better. And other deceptive charities should take this as a warning to shape up or stay out of Michigan.”
American Veterans Foundation (AVF) came to the attention of the Attorney General’s Charitable Trust Section through an audit of its charitable solicitation registration and IRS Form 990 and through its connections to questionable telemarketing fundraisers Courtesy Call and Donor Relations (both of whom have since ceased fundraising in Michigan). The Charitable Trust Section questioned certain statements on AVF’s IRS Form 990, requested AVF’s solicitation materials for review, and requested information regarding AVF’s purported charitable activities. AVF’s responses revealed a very different picture of its programs than that reported to the public.
AVF’s telemarketing scripts told donors that AVF was “dedicated” to its programs and that money raised would provide “immediate support” to homeless veterans and provide “We Care” packages to deployed troops. During the years 2014 through 2016, AVF raised nearly $4 million nationwide, but spent only 1% of the funds raised for these programs.
In 2014, despite claiming on its Form 990 that it had helped hundreds of veterans, AVF directly helped just one homeless veteran by making a single grant of $1,565. AVF’s “We Care” program expenditures were also less extensive than reported on the Form 990. And despite raising more and more money each year, AVF spent less and less on its “We Care” program. By 2016, AVF’s “We Care” spending had decreased to just $2,150, or 0.1% of funds raised that year.
Rather than providing direct relief to veterans as represented to donors, AVF spent the money it raised on fundraising, administrative costs, the salary of its President Paul Monville, and other costs. AVF also used a small percentage of funds raised to provide grants to veterans homes and other charities, a program not disclosed to donors. AVF then falsely reported this program on its Form 990s as providing direct assistance to hundreds of veterans.
The Notice of Intended Action alleges 279,935 violations against American Veterans Foundation. It also orders American Veterans Foundation to cease and desist these violations, giving them twenty-one days to resolve the matter or face a civil action in court. Concurrent with the Notice of Intended Action, the Attorney General is also issuing a Notice of Intent to Deny American Veterans Foundation’s fundraising registration.
Exhibits A-E: www.michigan.gov/documents/ag/NIA.exhibits_A-E_601763_7.pdf
Exhibits F-J: www.michigan.gov/documents/ag/NIA.exhibits_F-J_601764_7.pdf
Michigan a Leading State in Fighting Charitable Solicitation Fraud
Attorney General Schuette’s Charitable Trust Section has continued to ramped up its enforcement of Michigan’s law prohibiting deceptive charitable solicitations.
Below are Michigan’s seven charitable solicitations fraud actions within the past year:
Florida Charity to Pay Over $100K to Breast Cancer Research, and is Banned From Soliciting in Michigan for Ten Years Due to Deceptive Fundraising
Utah Fundraiser to Pay $90K and Cease Michigan Solicitations Through 2020 for Fundraising Misrepresentations
Schuette: Deceptive Charity to Cease Operation after Misleading Donors
Schuette Files Cease and Desist Against Dearborn-based Fundraiser for Illegally Operating Clothing Donation Bins
Schuette: Texas-based Fundraiser Faces 319,000 Civil Violations for Deceptively Operating Michigan Humane Society Clothing Bins
Schuette Files Cease and Desist After Illinois Veterans Charity Admits to Lying to Donors Helping Michigan Vets
Schuette Orders Texas Charity to Cease and Desist Military Phone Card Scam
Charitable Solicitations Resources
Complaints regarding charitable solicitations may be filed through the Attorney General’s online complaint form, or by mailing the Charitable Trust Section at P.O. Box 30214, Lansing, MI 48909-7714, or by emailing the Charitable Trust Section.
To assist individuals in making wise decisions regarding which charitable donations to support, Attorney General Schuette established an online searchable database for charities. The Attorney General also publishes an annual professional fundraising charitable solicitation report, available at on the Attorney General website. Through these resources, users have access to information to aid them in determining which charities are worth supporting—and which are not. The Attorney General’s Charitable Trust Section is also available at 517-373-1152 to answer inquiries about a charity.
Original Press Release