Millions of dollars meant for veterans has been stolen by con men or misspent by charities in recent years, according to Ohio officials who tell the Dayton Daily News they are stepping up enforcement.
Recently a sweeping investigation by the Ohio Attorney General of AMVETS found 59 locations around the state, including 15 locally, were diverting money for career training for veterans from its intended purpose.
Meanwhile, a man accused of bilking donors out of $100 million in 41 states by claiming the money was going to Navy veterans faces trial in Cleveland on fraud charges. Investigators say Donald Cody — who went by the alias Bobby Thompson — had an office in Cincinnati and collected nearly $2 million in Ohio.
And just last week the Attorney General’s office announced it had shut down a Riverside-based charity whose director was accused of spending money on herself instead of helping incarcerated veterans charged with wartime crimes as it claimed.
“I think there’s always been people who have tried to take advantage of the public’s sympathy for veterans and our love of veterans,” Attorney General Mike DeWine said. “I think with two wars going on in Iraq and Afghanistan … people were much more focused on veterans and it was an environment these con artists can flourish in.”
Increased outreach and better tools have led to more effective enforcement of charity rules, according to Pete Thomas, chief of the attorney general’s charitible law division.
“I frankly do think we’re doing a better job of what we’ve been doing all along,” he said.
Charity head says motives were pure
Cari Johnson founded A Dollar to Care in 2010. She said her son had joined the military and she was learning about military life online when she stumbled across an article about soldiers serving time for crimes committed in war zones.
“These are guys that went and fought for our country and maybe they didn’t kill the enemy in the politically correct way, but they killed them,” she said. “I could just imagine if my son were to be over there.”
Johnson asked donors for a dollar at a time and sent gift cards for turkeys and Christmas gifts to children of about 15 families over the years, she estimates.
But instead of paying monthly bills and household expenses for soldiers’ families as Johnson claimed, she was spending the money on herself, according to a settlement agreement she signed with the Ohio Attorney General. State officials say she used charity money at Redbox movie kiosks and liquor stores.
The agreement required her to shut down the charity and pay a $20,000 fine, half of which the state will give to a registered charity.
Johnson disputes much of the state’s claims. She said she helped one soldier’s wife and three kids move across the country, bought another art supplies in prison and did more. She said there were some paperwork errors and the charity struggled financially; a motorcycle ride and concert fundraiser brought in $3,000 but cost $3,700 to put on.
But she said she was never in it for herself.
“If I was in this to make money, if I was in this to support myself … I would have picked a hell of an easier cause,” she said. “It was so difficult to get donations, it was so difficult of a mission, and I wouldn’t have (just) asked for a dollar.”
She said her ex-husband did accidentally rent two movies for $1.07 apiece from Redbox with charity money, and she may have bought cigarettes at a drive-thru while picking up cards with charity money. And her live-in ex-boardmember misused the card, she alleged.
She admitted to paying her electric bill from charity funds, but said she only did that after depositing a Social Security check for $932 into the organization.
“Yeah, there were some stupid mistakes made,” she said. “It was my organization and I have to take responsibility.”
‘Trying to take advantage’
The attorney for one of the soldiers Johnson claimed to be helping said she did more harm than good.
Tim Parlatore, attorney for Corey Clagett, said he attended the concert fundraiser and it was terribly run. Clagett’s family had to pay their own expenses despite her promise to pay. The family tried to cut ties with Johnson, he said.
Parlatore said she may have provided art supplies and a magazine subscription to Clagett.
“When you’re raising thousands of dollars for an organization but you send the guy $20 worth of stuff is that really why you’re raising all the money?” he said.
“My impression was that she was just trying to take advantage of the situation,” he said. “Through her online presence she tried to really create a cloak of legitimacy and try and make it seem that she was doing all this for the veterans, but it all really struck me as a scam, especially once I got out there and met her.”
Clagett is in Leavenworth military prison on a murder conviction. The charges stem from 2006 when the then-21-year-old followed orders with another soldier to release three Iraqi detainees and shoot them when they ran.
Money could have helped vets
The number of complaints about charities received by Ohio’s attorney general has stayed steady between a high of 1,320 in 2008 to a low of 1,247 in 2010. There have been 311 so far this year.
The outcome of those complaints can range from nothing to a written warning to criminal prosecution.
The attorney general’s office has taken some kind of action against 259 organizations since the beginning of 2008. This includes 20 AMVETS posts, 40 VFW posts and 33 American Legion posts. The majority of these were violations of the state’s bingo laws, which require 25 percent of bingo proceeds go to charity.
“A lot of times it comes down to they haven’t given the right amount of money because they haven’t been keeping the books properly,” Thomas said, attributing this more to incompetence than fraud.
This does not include the 59 Ohio AMVETS posts that entered into settlement agreements with the state saying they did not use all of their charitable proceeds for veteran career training as they claimed. Locally that included posts in Montgomery, Greene, Clark, Butler, Warren and Miami counties.
A state investigation found that from Jan. 1, 2006, to May 31, 2012, these AMVETS posts made $50.28 million in net profit from the sale of instant bingo tickets.
They handed 25 percent of this over to AMVETS Career Center, Inc., which provides training for veterans. But the career center non-profit then handed 85 percent of the money back to the posts for supposed “career centers” that were largely idle or inoperable computer stations.
Like all of these cases, DeWine said the worst part is all of the help this money could have done.
“The sad thing is if they’d done what they were supposed to do there was millions of dollars that should have been spent on jobs training for veterans,” he said.
Recent veteran-related allegations:
A Dollar to Care
A Riverside woman was forced to shut down her charity after an attorney general’s investigation found the money wasn’t helping with the monthly bills of soldiers incarcerated for crimes allegedly committed during combat, but instead was going for her personal uses. The charity also wasn’t registered with the state. Cari Johnson agreed to pay a $20,000 fine, half of which will go to a charity of the state’s choosing.
American Heroes Alliance
The Ohio Attorney General in April filed suit against a Columbus woman and her two children alleging they misappropriated more than $150,000 in charitable assets, didn’t register as a charity and misled people into thinking donations would go to veterans and their families. Instead, state officials said she used charity funds “as an extension of her own bank account” to pay for meals, hair salon services, car repairs and other personal expenses.
Just 4 Vets
While Just 4 Vets is a legitimate non-profit created to help veterans and their families, they had no idea two men had started soliciting for donations in their name in front of Kroger and Walmart in the Columbus area, nor did they get any of the money. The two men signed an agreement in April with the attorney general’s office to stop illegal solicitations on the charity’s behalf.
The Ohio Attorney General in March ended an investigation into AMVETS career centers across Ohio that uncovered the misappropriation of millions in charitable funds. The state found 59 posts across the state received more than $10 million since 2006 — money raised at local bingo games — to provide career centers for veterans, but was using the money for non-charitable purposes.
U.S. Navy Veterans Association
A Florida man is facing fraud charges in Cuyahoga County for allegedly bilking donors out of more than $100 million meant for Navy veterans, including nearly $2 million in Ohio. The charity was based in Florida and had offices in Cincinnati and raised donations from 41 states until newspaper investigations found the charity was allegedly a farce. The trial for John Donald Cody — who goes by the alias Bobby Thompson — is scheduled for September.