Virginia Attorney General Slaps Veterans Charity Founder With $100,000 Fine – Center for Public Integrity
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FALLS CHURCH, Va. — The Virginia attorney general’s office has shut down two veterans’ charities that allegedly misappropriated $13 million in donations from unsuspecting Americans.
The Circle of Friends for American Veterans and the Center for American Homeless Veterans were investigated by the Center for Public Integrity in 2017, with Put Vets First! PAC, a related political action committee, all based in the same Falls church office.
The organizations promised to help homeless veterans with food, shelter and job training, but they spent almost all of their money on professional telemarketers, which Public Integrity also investigated.
As part of a settlement agreement with the state, retired Army Major Brian Arthur Hampton, founder and operator of the three groups, was permanently banned from soliciting donations and playing a financial role for d other nonprofit organizations.
He is also to split $100,000 among three charities “that provide real support” to homeless veterans, according to a news release today from the office of Virginia Attorney General Mark Herring. The charities are: Virginia Supportive Housing, the Bob Woodruff Family Foundation and Homes for our Troops.
Hampton must also cooperate with Herring’s ongoing investigation of third-party companies that have entered into contracts with Hampton organizations.
If Hampton doesn’t comply with the settlement agreement, it will have to pay more than $3.7 million to charities that help homeless veterans.
The New York Attorney General’s Office, which had launched its own investigation into the Hampton organizations, also reached a “substantially similar” settlement agreement with Hampton, according to Virginia officials.
Hampton could not be reached for comment.
Public Integrity has written extensively about the vast telemarketing networks run by Mark Gelvan and Richard Zeitlin, whose companies both contracted with Hampton organizations to raise millions of dollars. Telemarketers keep up to 90% of what they collect for charities and political action committees.
“It’s despicable that there are organizations that deceive kind-hearted Virginians who just want to help homeless veterans in our communities,” Herring said. “My office will vigorously pursue these bad actors who take advantage of the kindness of Virginians for their own gain.”
In a press release, Herring’s office also drew attention to a 2017 accounting maneuver revealed by Public Integrity: telemarketing expenses were “incorrectly” classified as program expenses rather than fundraising expenses. “to trick potential donors into believing that the organization was providing more support to homeless veterans than it actually was.
James Edgar, a former staffer who worked for the Hampton organizations, said today’s settlement agreement “signifies the end of a more than two-decade scam against the American people.”
Edgar said he believes the action at the state level rather than the federal level shows that the Federal Trade Commission – the regulatory body responsible for enforcing telemarketing laws – lacks enforcement.
“I think it shows a big flaw in the use of our phone system,” Edgar said, “where these numbers are so easily used for fraud.”
After leaving the Hampton organizations, Edgar filed a complaint with the IRS in October 2018, asking that the two nonprofits’ tax-exempt status be revoked. But Edgar said the IRS informed him that Hampton’s tax returns had been filed correctly from an accounting perspective.
If he wanted to pursue further actions alleging misuse of donations, the IRS wrote, Edgar would have to contact another department. He dropped the case.
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In July 2019, Hampton’s Put Vets First! PAC filed a dismissal report with the Federal Election Commission. By then, the PAC website had been taken down, as had the sites of the two nonprofit organizations.
A Public Integrity reporter visited the three organizations’ longtime Hampton headquarters, based at the Falls Church, in June. The office was vacant. A property manager said Hampton did not leave a forwarding address.
Hampton is himself a veteran.
He enlisted in the US Army in 1968, served a year in Vietnam in “psychological operations” during the war and was in the Army Reserve from 1970 to 1992, according to a biography he has. provided in 2017 to Public Integrity and Army personnel records. and National Archives. He retired with the rank of major.
Hampton co-founded Circle of Friends for American Veterans in 1993 from a bedroom in a small co-op apartment in Virginia. He went on to form the Center for American Homeless Veterans, a non-profit “welfare” organization, and Put Vets First! CAP. The political action committee is part of a growing trend in politics, as Public Integrity reported in September.
By 2015, Hampton’s compensation had quadrupled in less than a decade to $340,126 for his work for his two nonprofits. He also started earning PAC money in 2017.
When reached by Public Integrity in 2017, Hampton defended its use of telemarketers who kept the vast majority of what they collected.
“Over the course of 24 years, I’ve tried every other fundraising technique I’ve come across in over four decades of fundraising experience, most of them over and over again, with different variations,” Hampton said in an email to Public Integrity (he declined to answer questions in person). “None of these efforts produced revenue close to the revenue generated by telemarketing.”
He also defended his remuneration: “I am at the head of three organizations. I’m always working.
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