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Virginia Attorney General files legal action ‘fake charities’ that claimed to help veterans

RICHMOND, Va. -- Mark Herring, Virginia's Attorney General, announced Thursday morning that his office is taking legal action against what he calls two "fake" charities.

The two charities, Hearts for Heroes Inc. and Operation Troop Aid Inc., are alleged to have not used money given to them specifically to help veterans and troops but rather to help their own organizations financially.

While Herring is currently filing suit against Hearts 2 Heroes Inc., who's operating business is Active Duty Support Services Inc., the other organization, Operation Troop Aid Inc., has entered into a settlement with the Attorney General.

The suit and settlement are part of a 16 state action that includes California, Delaware, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maryland, Nevada, New York, North Carolina, Pennsylvania, Tennessee, Virginia and Washington.

“Virginians are caring people who want to give back to veterans who have risked their lives to keep our country safe. Charities that deceptively solicit funds from donors who want to help veterans are disgraceful and should be held accountable for their efforts to make money on the good name of those who have served our country,” said Herring about the suit. “I hope these enforcement actions send a strong message to similar organizations that they need to be honest about where their money is going and make sure they follow through on their promises.”

The suits and action by Herring is part of a nationwide crackdown on fraudulent charities that exploit the name of America’s veteran community to solicit donations.

The lawsuits against both organizations bring up a variety of alleged issues.

The suit against Hearts 2 Heroes alleges violations of the Virginia Consumer Protection Act and Virginia’s Solicitation of Contributions law through misrepresentations regarding the nature of the business and the care packages purchased and the use of donated funds. This includes falsely leading customers to believe that its organization was a charity, which it is not; Delivering care packages, if delivered at all, to military bases in the United States, not overseas as represented; Representing to consumers that staff were veterans or volunteers when in fact those staff were not veterans or volunteers; and employing staff who would “skim” cash donations for themselves.

Christopher Engle, the owner of Active Duty Support Services, formerly known as Hearts 2 Heroes, says his company has properly disclosed its for-profit status, but amid confusion is currently shutdown. "I try to run a legitimate business and it seems like there's all these complaints," he tells News 3. "There's nothing that we say that we're not doing."

The settlement against Operation Troop Aid Inc. resolves allegations that the Tennessee-based charity violated state charitable solicitation laws, including Virginia’s Solicitation of Contributions law, by improperly spending funds for purposes other than their solicited purpose and using unfair, false, misleading, or deceptive solicitation and business practices.

Virginia and its fellow states allege that Operation Troop Aid Inc. failed to conduct proper oversight of a commercial co-venture called “Operation Teddy Bear,” in which certain retail stores sold teddy bears in military uniforms that would supposedly provide a fixed dollar amount to the charity for each bear sold for the express purpose of sending care packages to service members; failing to maintain donated funds as restricted funds, even when designated for a particular purpose, and spending funds improperly on non-charitable purposes; and used donation funds for purposes other than those expressly represented as the charitable purpose of the charity, and engaging in unfair, false, misleading, or deceptive solicitation and business practices.

According to a release from Herring's office, the settlement with Operation Troop Aid Inc. requires the charity to dissolve and prohibits the president and chief executive officer, Mark Woods, from becoming an employee, officer, director, board member, or assuming any fiduciary role with a nonprofit corporation and from soliciting on behalf of a nonprofit corporation.

The Operation Troop Aid Inc. and Woods are also prohibited from violating state charitable solicitation statutes. The settlement includes a $10,000 civil penalty enforceable by all the states to be held in abeyance to ensure compliance with the injunctive terms of the settlement. News 3 wasn't able to reach anyone from Operation Troop Aid.

The Federal Trade Commision is also working with the 16 states in this lawsuit.

Virginians who have a question, concern, or complaint about a consumer matter should contact Attorney General Herring's Consumer Protection Section here.