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State Cracks Down on Veterans Fundraiser Group

State Cracks Down on Veterans Fundraiser Group

CREATED Jul 26, 2010

By Jennifer Kraus
Consumer Investigator

NewsChannel 5 Investigates first exposed the practices of a group claiming to raise money for veterans. Now, that group has been ordered to stop collecting donations in Tennessee and has been hit with a hefty fine by the state.

It's the latest fallout from our undercover investigation.

Back in February, NewsChannel 5 Investigates first exposed how the Veterans Support Organization was collecting money in Middle Tennessee. And, we found that what our undercover crews were told by the men dressed in fatigues wasn't always true.

One man collecting donations told us, "We can help get a homeless or needy veteran off the street and into our shelter."

That same man also told us he was out there volunteering his time, even though NewsChannel 5 Investigates later discovered he was, in fact, getting paid.

"We believe that they were making false statements to the public about what they're using contributions for," said Todd Kelley, director of Tennessee's Charitable Solicitations Division.

Now, the state of Tennessee has come down hard on the VSO, ordering the group to pay $50,000 in penalties for 10 separate violations of the state's Charitable Solicitations Act.

Back in February, Hank Edney, the head of the Tennessee VSO office at the time, assured NewsChannel 5 Investigates, "All of the funding raised here will stay in Tennessee."

The group's own brochures made similar claims.

Now, the state is going after the group for falsely claiming that the VSO provides veterans in Tennessee with things like furnished apartments, permanent housing, and employment assistance and that it has a "professional partnership with the VA Health Care System."

According to state regulators, that is all untrue.

"I think it's quite serious," Todd Kelley said. "I mean, anytime a charitable organization misrepresents itself when appealing to the public for contributions, we take that very seriously."

After our investigation, the group's national leaders insisted that what we uncovered were a few isolated incidents. They even put out a press release insisting that the individuals soliciting donations that we talked with shouldn't be believed because they suffered from "Post Traumatic Stress Disorder and other mental health disabilities."

But the man who regulates charities in Tennessee said his office's investigation found false claims also coming from the group's higher-ups.

"In this case, these printed materials were clearly coming from the organization," Kelley explained.

Since moving into Tennessee in January, the VSO has collected tens of thousands of dollars in the name of veterans. State regulators say it's important for folks to ask questions before they give to find out exactly who they're giving to and what the money will be used for.

Kelley added, "And, this (the VSO) is proof positive of why they need to do that."

A spokesperson for the VSO told NewsChannel 5 Investigates that the group plans to appeal the violations because she said they do provide the services. However, they're available only in Florida.

She insisted the VSO never claimed to offer them here. The state disagreed and said the letter spelling out the violations speaks for itself.

The Veterans Support Organization is also being fined because it never registered with the state to raise money here, even after being told by regulators that they had to do so before collecting any more donations.

E-mail: jkraus@newschannel5.com

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