Fake veterans' charity to pay $95,000 for false entreating

A fake veterans’ charity must pay $95,000 to Washington state, after it deceived donors into thinking most of their donations would provide medical care for wounded veterans, according to the state attorney general’s office.

Healing Heroes Network Inc., also known as Injured America Veterans Foundation, spent less than 1% of people’s donations on veterans’ medical care, stated a release from Attorney General Bob Ferguson. For instance, the organization in 2016 received $2.7 million nationwide and spent $1,128 for medical care.

The decree filed Jan. 12 against the Florida-based charity and its directors, Stacey and Allan Spiegel, states nearly 4,000 Washingtonians donated to the charity between 2015 and 2017 through telemarketing campaigns alone. And, the $95,000 will be handed over to a legitimate nationwide nonprofit, to be determined later, that helps veterans with medical care.

The judgment is part of Operation Donate with Honor, a national effort against veterans’ fundraising fraud coordinated by the Federal Trade Commission and the National Association of State Charities Officials.

The decree -- which resolves Washington’s and a multistate investigation -- states the Healing Heroes Network must stop asking for donations, even though it did in 2018 after learning of the investigation. But the judgment ensures it will stay closed and its owners are prohibited for five years from overseeing/managing any nonprofit organization. Washington led the investigation with Florida, Ohio, Oregon, Illinois, Maryland, Minnesota, Missouri, New Mexico, California and Virginia.

“Few illegal acts are more appalling than exploiting the sacrifice of wounded veterans to line your own pockets,” Ferguson said in the release. “My office will continue to hold accountable perpetrators of sham charities -- and we will continue standing up for Washington’s veterans.”

One of the sham’s telemarketing schemes said it referred veterans to a “nationwide network of providers” and “provides financial assistance for services not covered, or delayed under the U.S. Department of Veterans Affairs benefits.”

A list of 164 providers in 34 states was maintained by the fake company, but most were chiropractors, hyperbaric oxygen specialists, massage therapists or acupuncturists who said they rarely received referrals from Healing Heroes. Of the eight in Washington, two never received a referral and three stopped practicing by 2017. One provider didn’t know of Healing Heroes. One massage therapist billed Healing Heroes $1,200 for a patient and received $300, with the sham telling the provider to consider the remaining $900 as a donation.

The charity didn’t provide any assistance at all to Washington veterans in some years, the decree stated. From 2015-2017, the only thing given to a wounded veteran was one tablet computer.

Most of the charity’s money was spent on fundraisers, salaries, advertising, rent, insurance, T-shirts and decals (for sale), office expenses and accounting services, Its 2016 Internal Revenue Service report claimed $250,000 on “program expenses,” including “community outreach,” such as pub crawls.

Stacey and Allan Spiegel bought at least $533,000 worth of T-shirts and decals between 2015 and 2017 from Charity Resources, or Spiegel Outfitters, owned by their two sons, Neal Spiegel and Benjamin Spiegel. The former then sold the items for profit under the company, “Hero Giveaways,” which was formed right as Healing Heroes dissolved while the investigation was underway. Items were sold on Hero Giveaways’s website under claims proceeds would go toward wounded veterans, but the investigation alleged nothing was given to veterans or other charities.

Additionally, the lawsuit stated the conduct violated the Charitable Solicitations Act, prohibiting false or misleading solicitations for charitable donations, and the Promotional Advertising of Prizes Act in its promotion of a sweepstakes letter to consumers that didn’t properly inform them of the odds of winning.

To ensure a charity is legitimate, ask for details, such as address, phone number and name; ask what percentage of donations benefit the cause; and check the charity’s registration at www.sos.wa.gov/charities.

Information on avoiding scams is available at ftc.gov/charities.

To file a complaint, visit www.atg.wa.gov/file-complaint.