Veterans Charity and its Professional Fundraisers Sued for Using Deceptive Fundraising Tactics
Solicitors Allegedly Misled Donors about Use of Funds and Percentage Going to Veterans; Judge Issues Temporary Restraining Order
BOSTON – A veterans charity and its professional fundraisers have been sued for using deceptive fundraising tactics in violation of state charitable solicitation and consumer protection laws, Attorney General Martha Coakley announced today.
The lawsuit, filed today in Suffolk Superior Court, alleges that a Somerset charity, Bay State Vietnam Veterans, Inc. (“Bay State”), and its Rhode Island-based fundraiser, Dynamic Marketing Solutions, Inc. (“Dynamic”), violated the Massachusetts charitable solicitation and consumer protection laws during their phone solicitation campaign. Also named in the lawsuit are Dynamic’s president, John Chaves, of Warren, R.I., and its founder, Thomas Gity, Jr., of Pompano Beach, Fla. A temporary restraining order has been obtained against the charity and its fundraiser, requiring them to preserve fundraising records and prohibiting them from transferring funds.
“We allege that these defendants took advantage of the public’s trust by knowingly misleading potential donors while soliciting money for veterans,” said AG Coakley. “We allege that these organizations falsely claimed that all donations were going directly to benefit veterans when in fact a very small percentage was going to that purpose. There are many worthy veterans charities that deserve our support - people should be confident that they are not being misled and that their hard earned money is going to the intended purpose.”
According to the complaint, Bay State hired Dynamic to raise funds for the organization. During phone solicitations, Dynamic’s fundraisers allegedly deceived potential donors by falsely stating that 100 percent of their donations would benefit veterans. In fact, only 15 percent of the solicited funds went to support veterans and 85 percent of the funds went back to Dynamic for their fundraising services. The lawsuit further alleges that Dynamic’s professional fundraisers misled potential donors by falsely stating donations would benefit veterans living in their communities. According to the lawsuit, Dynamic’s professional fundraisers also misled potential donors by falsely claiming they were volunteers for the charity and in some cases deceptively stating that they were veterans returning from Afghanistan.
The lawsuit also alleges that the fundraisers failed to inform donors of their status as professional fundraisers, as required by Massachusetts law. The Attorney General’s lawsuit seeks $5,000 in civil penalties for each deceptive act found by a court.
Suffolk Superior Court Judge Janet Sanders issued a temporary restraining order barring the charity and fundraisers from transferring any funds they have raised and from destroying any fundraising records. Judge Sanders has scheduled a hearing for August 23 on the AG’s motion seeking a preliminary injunction that, if granted, will bar the fundraisers from continuing to use deceptive fundraising tactics and order them to account for all money raised from the public in 2011 and 2012.
This matter is being handled by Assistant Attorney General Eric Carriker of AG Coakley’s Non-Profit Organizations/Public Charities Division.