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August 14, 2012 > Lawsuit seeks removal of directors and recovery of funds for veterans charity

Lawsuit seeks removal of directors and recovery of funds for veterans charity

Submitted By the Office of the state Attorney General

Attorney General Kamala D. Harris filed a civil lawsuit on August 9, 2012 seeking the removal of officers and directors of Help Hospitalized Veterans, a California charity. The complaint alleges that those running the organization engaged in self-dealing, paid excessive executive compensation and engaged in fraudulent fundraising and other unlawful activities.

The lawsuit also seeks to recover more than $4.3M in funds improperly diverted from Help Hospitalized Veterans. Those funds were meant to support several programs serving veterans and active-duty military, including providing arts and craft kits to hospitalized veterans. Instead, they were used to enrich the organization's officers and fundraisers.

"The officers of Help Hospitalized Veterans improperly diverted money that hard-working and patriotic Americans donated to support injured vets," said Harris. "We must protect veterans, active-duty military and donors from scam artists who see them as little more than prey for their financial frauds."

The lawsuit alleges the directors and officers of Help Hospitalized Veterans breached their fiduciary duty by wasting its charitable assets on such things as golf memberships and a condominium (for use by officers) and authorizing excessive executive compensation to the group's former President (Roger Chapin) and its current President (Michael Lynch).

Controversy around the performance of veteran's charities like Help Hospitalized Veterans was brought to the public's attention in 2007 by Rep. Henry A. Waxman who, as Chairman of the House Oversight and Government Reform Committee Hearings, held hearings into their fundraising practices and overhead.

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