Some Scams Never Die, Never Fade Away

Image result for veterans scamsThe Commonwealth has no shortage of veterans and military as residents and citizens. Accordingly, the state also has no shortage of individuals who perpetrate schemes to make money from armed services individuals.

In October 2017, an Alexandria attorney was sentenced to five months in jail and five months of home probation for embezzling $150,000 from a charity called the National Vietnam Veterans Association (NVVA). The group had raised $8.6 million in 2014 for program services including assistance for homeless veterans. Incredibly, the embezzler was an attorney on the staff of the Office of General Counsel of the Department of Veterans Affairs.

On July 5, 2019, a Falls Church-based PAC called Put Vets First (PVF) that represented itself as an advocate for veterans ceased operations, filing a termination report with the Federal Elections Commission. The PAC reported income for the filing period of approximately $82,000 and fundraising expenses of about $70,000 through May 2019. PVF was operated in tandem with a related charity. The Center for American Homeless Veterans (CAHV), headed by the same individual. VoxFairfax previously reported (April 27, 2018) in detail on the CAHV activities and finances []. While raising millions of dollars over a four-year period, CAHV compensated its founder annually in six figures while its professional fundraising company pocketed the lion’s share. Needless to say, homeless vets got zilch.

Jethro Leroy Gibbs of NCIS fame operates by rule #39, which instructs that there are no coincidences. NVVA was founded in Alexandria in 2001 while the Fall Church groups were created in 2006. As previously reported, CAHV has been under investigation by the New York and Virginia attorneys general since December 2017 and. according to published reports. continues to be under their scrutiny. But the coincidences don’t end there. The professional fundraising company—Midwest Publishing DN—was employed by both NVVA and CAHV, and had been forced in 2014 by New York regulators to cease solicitation efforts there.

Would contributions be made if the donor knew that the caller, the fundraiser, was to retain 80-90% of the contribution and the charity to receive the balance? . . . Virginia agencies and the legislature must step up.

The other victims in these schemes are the donor consumers who are contacted and persuaded to make contributions. Would contributions be made if the donor knew that the caller, the fundraiser, was to retain 80-90% of the contribution and the charity to receive the balance? Would the caller answer such a question about the shares? How are consumers to be protected from scams like CAHV  and NVVA?

And what of the charity itself? Why would individuals attempting to raise money for a worthy cause agree to forgo most of the funds? According to Virginia statutes, charities are required to file fundraising contracts with a state regulatory agency. In addition, the professional fundraising organization is required to file reports with the agency indicating the amounts of funds raised and periods in which campaigns are conducted. Thus, the state has information and data upon which to make judgments but is, unfortunately, not obligated to exercise or police obvious inequities or even complaints of aggressive tactics.

Nor does it appear that the Commonwealth’s Attorney General has legal authority to step in when abuses are reported or apparent. Since the first mention of trouble arose in December 2017, CAHV continued in existence until May 2019. VoxFairfax learned that CAHV’s authority to solicit in Virginia was terminated mid- May. However, it and its professional fundraiser could, in fact, continue to solicit in other states.  Yet there exists no Virginia requirement for verification or background checks for such companies other than voluntary disclosure.  Nor are there mechanisms or criteria to police or monitor the conduct of charities or their fundraisers during the course of a campaign.

Never dying and never fading scams like these seriously injure the ability of all other respectable causes and, perhaps more pointedly, create skepticism among donors about responding to worthy appeals. The scammers are taking advantage of the nation’s generous public policy to allow tax deductions for charitable giving and cheating those who do contribute. The state has the information upon which to act and a clear responsibility to its citizens and those in other states. Virginia agencies and the legislature must step up.

Categories: Issues, Local, National

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