Sweep of veterans fundraising fraud nets local nonprofit

0

State Attorney General Bob Ferguson has announced a crackdown on three deceptive charities that claimed to benefit veterans. These organizations told potential donors that their donations would benefit veterans when, in fact, little to none of the money raised did.

The sweep includes two lawsuits filed by Ferguson: one against Spanaway-based Fallen Hero Bracelets and another against Florida nonprofit Healing Heroes Network. The lawsuits allege these organizations violated the Consumer Protection Act, which prohibits unfair or deceptive conduct in the marketplace, and the Charitable Solicitations Act, which prohibits false, misleading or deceptive charitable solicitations.

“These organizations used the promise of improving veterans’ lives to mislead donors,” Ferguson said. “Their illegal actions are not only disrespectful to donors, but also to the veterans they claim to help.”

Fallen Hero Bracelets sells bracelets engraved with names of soldiers killed in action, along with hats, pins, badges, coins and pens. Its website claims that the proceeds from these purchases will be used to help veterans, including providing scholarships to children of soldiers killed in Iraq or Afghanistan, giving trained service dogs to soldiers suffering from severe PTSD and helping families dealing with separation and divorce. The website lists 40 organizations that it says benefit from sales. The nonprofit has neither provided any scholarships, trained service dogs or assistance to families, nor given any money to the claimed beneficiaries.

In addition to not providing any money to charity, Friedmann has been known to sue customers who complain about slow delivery. For example, a consumer in Washington bought a $40 t-shirt on Friedmann’s website. When she did not receive her purchase for more than 60 days, she complained to her credit union. Her credit union then sent a chargeback notice to Friedmann.

Friedmann eventually sent the shirt. The consumer returned it, wanting her money back. Next, Friedmann reported the customer to four different collection agencies, which promptly dropped the collection efforts after the consumer showed proof of the return. He then sued the consumer for $1,182.50 and the credit union for $5,000 in small claims court.

Ferguson’s lawsuit, filed in Pierce County Superior Court, alleges Friedmann violated the Consumer Protection Act and Charitable Solicitations Act by failing to benefit veterans as claimed by the Fallen Hero Bracelets website and by retaliating against and suing aggrieved consumers. Ferguson asks the court to require Fallen Hero Bracelets to end its deceptive conduct, provide restitution to affected consumers, impose penalties of up to $2,000 per violation and pay attorney costs and fees.

Ferguson filed a separate lawsuit against Florida-based Healing Heroes Network, also known as the Injured American Veterans Foundation, and its directors, Stacey Spiegel and Allan Spiegel, for misleading donors. The organization promised to use donations to help veterans of the wars in Iraq and Afghanistan receive medical treatments that the Department of Veterans Affairs does not readily provide. The organization raised around $20 million nationally in the nearly 10 years it operated.

Despite more than $2.5 million in revenues in both 2016 and 2017, the organization spent less than 1 percent of its revenue on direct services to wounded veterans in those years.

Almost 4,000 Washingtonians donated more than $100,000 to Healing Heroes Network from 2015 to 2017 through its telemarketing alone. Another nearly 3,800 Washingtonians donated through Healing Heroes Network’s sweepstakes promotion over the same time period.

The Florida-based organization dissolved in December 2017 after learning of the state’s investigation. However, executive director Stacey Spiegel immediately formed a new, similar business under the Hero Giveaways name. With the help of her son, Neal Spiegel, she continued selling t-shirts and stickers from HeroGiveaways.com, still claiming that proceeds would benefit wounded veterans.

In fact, the suit alleges, Stacey Spiegel’s new operation was a for-profit business that has given nothing to wounded veterans or any other charity.

The lawsuit, filed in King County Superior Court, alleges the defendants violated the Charitable Solicitations Act and the Consumer Protection Act by misleading donors with claims that donations or purchases would go to treat wounded veterans, when very little actually did. The lawsuit asks the court to require Healing Heroes Network to end its deceptive conduct and provide restitution to consumers affected by the Spiegels’ conduct or designate the money for legitimate veterans’ charities. Additionally, Ferguson requests penalties of up to $2,000 per violation and payment of attorney costs and fees.

The actions are part of Operation Donate with Honor, a nationwide sweep coordinated by the Federal Trade Commission and the National Association of State Charities Officials. Ferguson and Washington Secretary of State Kim Wyman joined officials from around the country to combat veterans’ fundraising fraud through education and enforcement. Ferguson sued Spanaway-based Fallen Hero Bracelets and its director, Michael Friedmann, alleging that they misled customers into believing their purchases were benefiting veterans’ charities. In reality, his nonprofit has provided no funds to any such organization.

Subscribe to our newsletter

To stay updated with all the latest news, and offers.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.