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Fake veterans charity collected millions in donations

DAYTON, Ohio -- A government watchdog and six state attorneys general are taking aim at fake veterans charities, including one that collected more than $11 million from Ohioans from 2014 to 2016.

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Max Filby
, Cox Newspapers

DAYTON, Ohio -- A government watchdog and six state attorneys general are taking aim at fake veterans charities, including one that collected more than $11 million from Ohioans from 2014 to 2016.

A Florida-based nonprofit called Help The Vets was recently found to have spent less than 5 percent of donations on charity, with the other 95 percent going to the group's founder and paid fund-raisers, according to the Ohio Attorney General's Office.

Now, the fraudulent charity is one of several that finds itself in the crosshairs of the Federal Trade Commission and the state attorneys general of Ohio, Florida, California, Maryland, Minnesota and Oregon. The FTC and the six attorneys general have launched a campaign called "Operation Donate with Honor" to combat giving to charities falsely claiming to be helping veterans and members of the military.

Along with Help the Vets, the campaign identifies eight other charities that have all been sued for lying to donors.

Neil Paulson Sr. and his Help the Vets are now banned from soliciting charitable contributions, according to the FTC. Through a settlement with the FTC and the six state attorneys general, the organization has to pay its remaining $1.75 million in funds to a legitimate charity, according to Ohio Attorney General Mike DeWine's office.

"Unfortunately there are some groups that only pretend to do this kind of work," DeWine said in a prepared statement. "We want people to know the difference. Sham charities drain away money and resources that could be used by honest, legitimate organizations."

DeWine's office has set up a web page where people who wish to donate to a charity can conduct research to make sure the place they are giving money is a legitimate organization.

Donors should be wary of giving to a nonprofit only because of its "real-sounding" name, according to the attorney general's office. The state also encourages donors to look up a charity's IRS Form 990 to see what programs an organization runs and what it spends money on, among other things.

One local nonprofit that has been impacted by misleading veterans charities is the Miami Valley Military Museum on the grounds of the VA Medical Center in Dayton.

Fraudulent charities have created something of a ripple effect that makes people reluctant to donate to real ones, said Catherine Beers-Conrad, treasurer and spokeswoman for the museum.

Beers-Conrad, a retired Air Force sergeant, noticed people became less willing to donate when news broke two years ago about how the well-known Wounded Warrior Project spent lavishly on itself. People began telling her that they were not sure they should donate to the museum because they didn't trust the nonprofit to properly spend their money.

"I was really surprised that it came this far down the ladder," Beers-Conrad said. "It affects everything. There's only so much money to go around."

Beers-Conrad and the museum staff regularly visit units at the Dayton Veterans Affairs Medical Center. During visits they host monthly birthday parties for patients and give cards to families with vets in hospice.

The ultimate fear, Beers-Conrad said, is that the donor reluctance caused by fake charities becomes widespread and eventually translates into a funding shortage for certain veteran nonprofits. Such a shortage would mean groups like the museum would not be able to continue the programs they have to help vets, she said.

That's why Beers-Conrad was happy to hear that the government is cracking down on fake charities. If it didn't, fraudulent nonprofits might get away with swindling more unsuspecting donors who think their money is actually going toward a good cause, she said.

"It really angers me," she said. "It's a sin to steal from anyone like that."

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