SAN FRANCISCO (Legal Newsline) - California Attorney General Kamala Harris announced a settlement Friday with a hospitalized veterans charity to resolve allegations that the charity's officers improperly diverted funds.
Harris sued the executive officers and directors of Help Hospitalized Veterans in August 2012 for allegedly diverting funds away from programs serving veterans and active-duty military. Roger Chapin, the charity's former president, Michael Lynch, the charity's current president, Thomas Arnold, Robert Beckley, Gorham Black III and Leonard Rogers allegedly diverted funds toward fundraising and excessive compensation.
"Veterans face many challenges when they return home - it's unconscionable that Help Hospitalized Veterans officials misused charitable money intended for those who served and have sacrificed for our country," Harris said. "I am pleased this settlement forces these officials to resign, in addition to paying restitution."
The lawsuit alleged the defendants wasted charitable assets on golf memberships and a condominium for use by executives. The defendants also allegedly authorized excessive compensation for Chapin and Lynch.
Under the terms of the settlement, Help Hospitalized Veterans will receive $2 million from the Chapin Trust and the charity's director and officer liability insurance policy will pay $450,000 to the charity in restitution on behalf of the defendant officers and directors. Chapin passed away in August and Lynch will retire from his position as president of the charity and resign from the board.
Lynch, Arnold, Beckley, Black and Rogers will be permanently barred from acting as a trustee, fiduciary, director or officer of any California charity. The directors will resign on a rolling basis to transition to new management.