Michigan Attorney General Bill Schuette announced a Notice of Intended Action and Cease and Desist Order against American Veterans Foundation (AVF).
The move comes after Schuette claims the foundation had more than two hundred thousand violations of the Charitable Organizations and Solicitations Act. They included deceptive solicitations and diversions of funds raised to other purposes.
More than 12,000 donations, totaling more than $250,000, were received from Michigan donors.
The AVF came to the attention of the Attorney General’s Charitable Trust Section after an audit of its charitable solicitation registration and IRS Form 990 and through connections to questionable telemarketing fundraisers “Courtesy Call” and “Donor Relations”.
The Charitable Trust Section questioned several aspects of the AVF, and said the foundation’s responses revealed a very different picture of its programs than it reported to the public.
“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.”
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, according to Schuette’s office.
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.
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, according to Schuette.
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.
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