SALEM, Ore. (Legal Newsline) - Oregon Attorney General John Kroger announced on Tuesday that he has filed a lawsuit against the founder of two charities who allegedly kept money that was earmarked for Oregon veterans.

Gregory Warnock and his corporations -- the Oregon War Veterans Association and Military Family Support Foundation -- allegedly used charitable donations to make unreported political contributions. The suit alleges that more than $690,000 was misused.

"The Department of Justice is committed to cracking down on charities that misuse donations raised to benefit veterans, law enforcement and other worthy causes," Keith Dubanevich, chief of staff and special counsel to Attorney General Kroger, said. "Oregonians deserve absolute assurances that their generous charitable contributions are spent properly."

Kroger alleges that Warnock misrepresented that Military Family Support had been granted charitable status by the IRS and that all donations to it were tax-deductible, which was not true. The suit also alleges that the business was little more than a corporate shell used by the defendant to solicit donations. The money was then allegedly transferred to Warnock or entities under his control.

The suit also alleges that Warnock allowed OWVA to make unreported political contributions, misrepresenting that donors could claim a charitable tax deduction for the contributions. This is against the law under the state's campaign finance laws, Internal Revenue Service regulations and OWVA's status as a charitable, public-benefit corporation.

Kroger is seeking a court order shutting down OWVA and preventing Warnock from operating any charity in the future. He also wants Warnock to repay amounts he allegedly improperly diverted and the money used for charitable organizations that provide assistance to veterans.

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