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Florida veterans charity accused of being a ‘sham’

By ZAC ANDERSON | Sarasota Herald-Tribune, Fla. | Published: March 29, 2019

SARASOTA, Fla. (Tribune News Service) — A Sarasota veterans charity has agreed to "a permanent ban on soliciting charitable donations" after being accused of being a "sham charity" by the Florida Attorney General's office and the Federal Trade Commission.

Attorney General Ashley Moody announced Thursday that Sarasota-based American Veterans Foundation Inc. and founder Paul K. Monville signed the order agreeing to the solicitation ban, which appears to effectively ends the charity's existence. Monville also agreed not be involved in "oversight and management of charities in the future."

A complaint filed in federal court this week by the attorney general's office and the FTC alleged that American Veterans Foundation "is a sham charity created and controlled by Monville to benefit private interests."

The complaint states that donors gave more than $6.5 million to the charity between 2014 and 2017.

"Defendants falsely tell donors that their contributions will be used to send care packages to service members deployed overseas and to provide immediate assistance to veterans facing homelessness," the complaint states. "Instead, donations almost entirely benefit Monville — the founder, president, and executive director of AVF — and the for-profit fundraisers he hires. Any spending on the programs Defendants described to donors is merely incidental."

The complaint says American Veterans Foundation operated out of a suite at 1950 Northgate Blvd. in Sarasota. The charity's board included Monville's sister and son.

Using for-profit fundraisers, AVF solicited donations from across the country, mostly in small amounts "ranging from $10 to $50," according to the complaint.

"AVF's contracts with these fundraisers grant the fundraisers ownership of its donor lists, and agree to pay them 80 to 85 percent of the all funds raised," according to the complaint, which says Monville approved the telemarketing scripts and brochures and pledge letters sent to potential donors.

The complaint states that AVF's solicitation materials are "false or misleading" and that a "miniscule fraction of donations" are spent on veterans.

"The vast majority of every donation — over 92 percent — goes directly to the for-profit fundraisers, compensation for Monville and his son, and other administrative costs," the complaint states.

To illustrate the charity's alleged false claims, the complaint notes that despite saying it sends care packages to veterans, AVF spent only $47,246 out of $3.5 million raised between 2014 and 2016 on care packages. The charity's donations jumped from $929,963 in 2015 to $2.1 million in 2016, but the amount spent on care packages dropped from $15,351 in 2015 to $1,845 in 2016, according to the complaint, which documents similarly low amounts spent on the charity's other big claim, that it helped homeless veterans.

"In fact, AVF provides only de minimus immediate support to veterans, homeless or otherwise," according to the complaint, which goes on to say that "AVF reported spending 2.7 percent of donations on helping homeless veterans in any way. Under these circumstances, it was deceptive for Defendants to tell donors that their contributions would provide immediate assistance to veterans facing homelessness."

Monville earned nearly $80,000 a year in compensation and bonuses from the charity, and his son also was paid by the charity, according to the complaint. The charity also spent thousands on "meals, airline flights — including for a board member's spouse — hotels, rental cars and gas" for Monville's son's personal vehicle.

"The board allowed such expenses without question or oversight; Monville alone oversaw use of the AVF AmEx car by himself and son," according to the complaint.

The complaint details seven different federal and state charges. The defendants were accused of violating the FTC Act, the Telemarketing Sales Rule, the Florida Deceptive and Unfair Trade Practices Act and Florida's Solicitation of Contributions Act.

The settlement reached with American Veterans Foundation and Monville "imposes a monetary judgment of approximately $6.5 million," according to the press release from Moody's office.

"All remaining charitable assets will be paid to a legitimate veterans charity, subject to court approval," the release states.

"This fraudulent charity took in millions of dollars from generous donors who believed the funds would go to active military members and veterans," Moody said in a press release. "Deceiving donors by exploiting the brave men and women who protect our country is disgraceful. My office will work to ensure that any recovered money from this sham charity will go to legitimate organizations helping our amazing military members."

©2019 Sarasota Herald-Tribune, Fla.
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