Mike Snider | USA TODAY

Americans get a patriotic feeling when they donate to charities that help military veterans and current service members – a sentiment dozens of charities across the U.S. have exploited to scam millions of dollars in donations, a government watchdog agency says.

A major offender, officials say, was Help the Vets, which had a nationwide operation, soliciting donations for its funding of veterans' medical care, including breast cancer treatment, a suicide prevention program, retreats for recuperating from stress and veterans fighting breast cancer.

“But for thousands of disabled veterans who served in Iraq and Afghanistan, giving an arm and a leg isn’t simply a figure of speech – it’s a harsh reality," read one of the Orlando, Florida-based organization's solicitation letters, written by charity founder Neil Paulson. "Your $10 gift will mean so much to a disabled veteran.”

However, Help the Vets, which touted a "Gold" rating from GuideStar, primarily helped itself, using 95 percent of every donation, gathered through mailings and telemarketing calls, to cover fundraising, administrative expenses and Paulson’s salary and benefits, according to the Federal Trade Commission. "The evidence shows ... (the group) in reality, spent more than 95 percent paying its founder, fundraisers and expenses," FTC chairman Joe Simons said Thursday in a news conference.



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The FTC and attorneys general in Florida, California, Maryland, Minnesota, Ohio and Oregon filed a complaint and reached a settlement with Help the Vets, officials announced Thursday.

The charity, which took in about $20 million from 2014 to 2017, must pay its remaining assets, at least $72,122.36 to one or more court-approved legitimate veterans charities. Help the Vets founder Paulson, identified as a retired U.S. Army captain on the group's GuideStar page, will also pay $1.75 million to one or more charities.

The FTC and charity regulators and law enforcement officials in every state have teamed up on more than 100 actions against dozens of fake charities, which have collected tens of millions of dollars in donations of cash and vehicles and other goods, all part of scams that did not directly benefit veterans, officials say.

“Americans are grateful for the sacrifices made by those who serve in the U.S. armed forces,” Simons said in a statement announcing the initiative. “Sadly, some con artists prey on that gratitude, using lies and deception to line their own pockets. In the process, they harm not only well-meaning donors, but also the many legitimate charities that actually do great work on behalf of veterans and service members.”

GuideStar, which gives charities ratings based on how much information they publicly disclose in their profile on the service, said in a statement Thursday: "As we learned today, the information this organization provided not just to the IRS but also to GuideStar was fraudulent. According to our Terms of Use we have removed Help the Vets’ Seal of Transparency."

The service said it is "actively reviewing the organizations mentioned" named by the FTC and the states Thursday. "So far, we have removed Seals for four organizations. We are constantly evolving our procedures to better identify dishonest information," it said.

Veterans of America robocalls

The FTC announced the “Operation Donate with Honor" initiative Thursday, along with other state officials and the National Association of State Charity Officials. In addition to targeting filing complaints against fraudulent charities, the FTC has launched an education campaign to help consumers make sure they are donating to legitimate charities.

Another organization, Veterans of America and its founder, Travis Deloy Peterson, was charged with illegally making millions of robocalls to get people to donate cars, boats and other things of value, falsely claiming that donations would go to veterans charities and were tax deductible but were sold for personal benefit. "Indeed, it was a front for the defendant who sold those cars, boats and real estate and then used the money to line his own pockets and fund even more robocalls," Simons said.

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A federal judge issued a temporary restraining order last week prohibiting the group from making unlawful robocalls while the FTC's complaint proceeds. Donations of vehicles and boats amounted to about $454,000. Veterans of America also operated under the names Vehicles for Veterans LLC, Saving Our Soldiers, Donate Your Car, Donate That Car LLC, Act of Valor and Medal of Honor, the FTC says.

Similarly, Help the Vets operated on several names, too, officials say, including American Disabled Veterans Foundation, Military Families of America, Veterans Emergency Blood Bank, Vets Fighting Breast Cancer and Veterans Fighting Breast Cancer.

Peter O’Rourke, acting secretary for the U.S. Department of Veterans Affairs, commended the FTC and officials. “Not only do fraudulent charities steal money from patriotic Americans, they also discourage contributors from donating to real Veterans’ charities,” he said in a statement.

Among the several dozen organizations named, Illinois-based VietNow had raised nearly $2 million nationally using professional telemarketers who exaggerated or misrepresented its charitable activities. But law enforcement officials found VietNow used only applied 0.2 percent of its donations to directly help veterans, officials said.

After initial investigations by the attorney generals' offices in Michigan and Illinois, a total of 24 states reached a settlement with VietNow to dissolve and distribute its remaining assets to a pair of legitimate charities, Fisher House Foundation and Operation Homefront.

"VietNow was a telemarketing scheme which used professional fundraisers who told donors their donations would help local vets," said John Wobensmith, secretary of state for Maryland, one of the states that investigated the group. "VietNow has admitted it did not fund programs assisting veterans."

Other charities hit with legal actions by federal and state officials for various fraudulent violations include Healing American Heroes, Healing Heroes Network, Operation Troop Aid and Veterans Relief Association.

While most charities are trustworthy, patrons must be vigilant, says Art Taylor, president of the Better Business Bureau’s Wise Giving Alliance. "No one wants to say no to a charity that is purportedly supporting veterans. We all want to help these heroes," he said, speaking at the FTC event. "And yet there are instances in which we have to be careful."

The BBB and the FTC posted new educational information on their sites for consumers to better spot potential scammers.

"So we encourage all Americans to be generous," Taylor said, "but to take a few minutes and do your homework and make sure that every dollar that you donate ends with a charity that can actually do the work."