Mass. AG announces lawsuit against deceptive veterans charity
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a lawsuit Thursday against a veterans charity and its professional fundraisers for allegedly using deceptive fundraising tactics.
The lawsuit alleges that the Somerset-based Bay State Vietnam Veterans Inc. and the Rhode Island-based Dynamic Marketing Solutions Inc., a professional fundraising company, violated the state's consumer protection and charitable solicitation laws during a phone solicitation campaign. John Chaves, Dynamic's president, and Thomas Gity, Jr., Dynamic's founder, were also named in the lawsuit.
Suffolk Superior Court issued a temporary restraining order against the charity and its fundraiser prohibiting them from transferring funds and requiring them to preserve records of fundraising.
"We allege that these defendants took advantage of the public's trust by knowingly misleading potential donors while soliciting money for veterans," Coakley said. "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."
Bay State hired Dynamic to raise funds for its veterans charity. During phone solicitations, fundraisers for Dynamic allegedly deceived potential donors by falsely saying that 100 percent of the donations would benefit veterans. Only 15 percent of the solicited funds actually went toward veteran support while 85 percent of the funds went to Dynamic for its fundraising services.
Dynamic's professional fundraisers also allegedly falsely told possible donors that donations would benefit veterans in their communities. The fundraisers also allegedly claimed they were volunteers for the charity and said that they were veterans returning from Afghanistan when that was not the case. Dynamic's fundraisers also allegedly failed to inform donors that they were professional fundraisers, a requirement of state law.
Coakley's lawsuit seeks $5,000 in civil penalties for each deceptive act determined by the court.
Suffolk Superior Court Judge Janet Sanders issued the temporary restraining order that barred the fundraisers and the charity from destroying any fundraising records or from transferring any funds. Sanders scheduled a hearing for Coakley's motion seeking a preliminary injunction for August 23. If the motion is granted, the fundraisers will be barred from using deceptive fundraising tactics and will require them to account for all money raised from the public in 2011 and 2012.