Washington State Attorney General cracks down on veterans’ charities misleading Washingtonians

  • Sun Jul 22nd, 2018 7:00am
  • News

Submitted by the Washington State Attorney General’s Office

On July 19, Attorney General Bob Ferguson announced a crackdown on three deceptive charities that claimed to benefit veterans. These organizations told potential donors that their donations would benefit veterans when, in fact, little to none of the money raised did.

The crack down includes two lawsuits filed by Ferguson: one against Spanaway-based Fallen Hero Bracelets and another against Florida nonprofit Healing Heroes Network. The lawsuits allege these organizations violated the Consumer Protection Act, which prohibits unfair or deceptive conduct in the marketplace, and the Charitable Solicitations Act, which prohibits false, misleading or deceptive charitable solicitations.

“These organizations used the promise of improving veterans’ lives to mislead donors,” Ferguson said. “Their illegal actions are not only disrespectful to donors, but also to the veterans they claim to help.”

The actions are part of Operation Donate with Honor, a nationwide sweep coordinated by the Federal Trade Commission and the National Association of State Charities Officials. Ferguson and Washington Secretary of State Kim Wyman joined officials from around the country to combat veterans’ fundraising fraud through education and enforcement.

The actions are also part of the Military and Veterans Initiative, Ferguson’s longtime effort to support and educate military service members and veterans about their rights and the resources available to them.

Fallen Hero Bracelets

Ferguson sued Spanaway-based Fallen Hero Bracelets and its director, Michael Friedmann, alleging that they misled customers into believing their purchases were benefiting veterans’ charities. In reality, his nonprofit has provided no funds to any such organization.

Fallen Hero Bracelets sells bracelets engraved with names of soldiers killed in action, along with hats, pins, badges, coins and pens. Its website claims that the proceeds from these purchases will be used to help veterans, including providing scholarships to children of soldiers killed in Iraq or Afghanistan, giving trained service dogs to soldiers suffering from severe PTSD and helping families dealing with separation and divorce. The website lists 40 organizations that it says benefit from sales.

The website claims that Fallen Hero Bracelets has made over 1.2 million sales worldwide.

Friedmann also uses websites for his other nonprofit, The Benjamin Foundation, also doing business as The Roberts Ridge Foundation, to make the same claims.

However, Fallen Hero Bracelets allegedly has not provided any scholarships, trained service dogs or assistance to families, nor has it given any money to any of its 40 claimed beneficiaries.

In addition to not providing any money to charity, Friedmann has been known to sue customers who complain about slow delivery. For example, a consumer in Washington bought a $40 t-shirt on Friedmann’s website. When she did not receive her purchase for more than 60 days, she complained to her credit union. Her credit union then sent a chargeback notice to Friedmann.

Friedmann eventually sent the shirt. The consumer returned it, wanting her money back. Next, Friedmann reported the customer to four different collection agencies, which promptly dropped the collection efforts after the consumer showed proof of the return. He then sued the consumer for $1,182.50 and the credit union for $5,000 in small claims court.

The Attorney General’s Office received 11 complaints concerning Fallen Hero Bracelets, almost all of which referenced the same conduct by Friedmann: delivery delays, being unable to contact Friedmann regarding order status and harassment as a result of consumers complaining or returning items.

In correspondence with customers, Friedmann calls himself the “chief legal officer” of his nonprofit. He is not and never has been an attorney.

Business Bureau of America logo used on Fallen Hero Bracelets websiteFriedmann uses an emblem similar to that used by the well-known Better Business Bureau, claiming that Fallen Hero Bracelets is accredited and has an A+ rating from the Business Bureau of America. The Business Bureau of America does not appear to exist. Fallen Hero Bracelets is not accredited by the Better Business Bureau and has an F rating.

Ferguson’s lawsuit, filed in Pierce County Superior Court, alleges Friedmann violated the Consumer Protection Act and Charitable Solicitations Act by failing to benefit veterans as claimed by the Fallen Hero Bracelets website and by retaliating against and suing aggrieved consumers. Ferguson asks the court to require Fallen Hero Bracelets to end its deceptive conduct, provide restitution to affected consumers, impose penalties of up to $2,000 per violation and pay attorney costs and fees.

Healing Heroes Network

Ferguson filed a separate lawsuit against Florida-based Healing Heroes Network, also known as the Injured American Veterans Foundation, and its directors, Stacey Spiegel and Allan Spiegel, for misleading donors. The organization promised to use donations to help veterans of the wars in Iraq and Afghanistan receive medical treatments that the Department of Veterans Affairs does not readily provide. The organization raised around $20 million nationally in the nearly 10 years it operated.

Despite more than $2.5 million in revenues in both 2016 and 2017, the organization spent less than 1 percent of its revenue on direct services to wounded veterans in those years.

Almost 4,000 Washingtonians donated more than $100,000 to Healing Heroes Network from 2015 to 2017 through its telemarketing alone. Another nearly 3,800 Washingtonians donated through Healing Heroes Network’s sweepstakes promotion over the same time period.

The sweepstakes promotions implied that the recipient won over $10,000 and only needed to send back the form to claim the prize. The form included a request for a donation. For several years, Healing Heroes Network sent out hundreds of thousands of these letters annually to consumers across the country. Every month, one consumer won $100, with the request that the consumer donate the money back to Healing Heroes Network. Only two people won the grand prize over the course of the sweepstakes promotions.

Healing Heroes Network also sold merchandise, including decals and t-shirts. It sold much of the merchandise through its website, HeroGiveaways.com. Net revenue from merchandise alone accounted for more than $700,000 in 2017. That same year, only $19,409 went toward grants and assistance to veterans.

The Florida-based organization dissolved in December 2017 after learning of the state’s investigation. However, executive director Stacey Spiegel immediately formed a new, similar business under the Hero Giveaways name. With the help of her son, Neal Spiegel, she continued selling t-shirts and stickers from HeroGiveaways.com, still claiming that proceeds would benefit wounded veterans.

In fact, the suit alleges, Stacey Spiegel’s new operation was a for-profit business that has given nothing to wounded veterans or any other charity.

The lawsuit, filed in King County Superior Court, alleges the defendants violated the Charitable Solicitations Act and the Consumer Protection Act by misleading donors with claims that donations or purchases would go to treat wounded veterans, when very little actually did. The lawsuit asks the court to require Healing Heroes Network to end its deceptive conduct and provide restitution to consumers affected by the Spiegels’ conduct or designate the money for legitimate veterans’ charities. Additionally, Ferguson requests penalties of up to $2,000 per violation and payment of attorney costs and fees.

Senior Counsel David Horn is handling both cases for Washington.

Operation Donate with Honor

The lawsuits are part of Operation Donate with Honor, a nationwide effort against veterans’ fundraising fraud coordinated by the Federal Trade Commission and the National Association of State Charities Officials. Attorneys General and other state agencies from all 50 states, the District of Columbia, Puerto Rico, Guam and American Samoa are joining the project by leading more than 100 education and enforcement efforts.

Scammers can use charities to prey on generosity. Do plenty of research before donating money. To make sure a charity is legitimate:

  • Ask for detailed information about the organization, including an address, phone number and name
  • Ask the organization what percentage of donations benefit the actual cause
  • Check if the charity is registered with the Washington Secretary of State

Consumers affected by these charities’ deceptive conduct, or any other charity or business, may file a complaint with the Attorney General’s Office at www.atg.wa.gov/file-complaint. Anyone who donated to Healing Heroes or Injured American Veterans Foundation and does not wish to file a complaint may contact AGO Investigator MaryBeth Haggerty-Shaw at MaryBethH@atg.wa.gov.