Oregon Says ‘Veterans’ Charity Is a Scam

SALEM, Ore. (CN) - Oregon claims the founder of a company who promised to spend "every penny" of the $500,000 he raised to help veterans gave a telemarketer 80 percent of the money, and spent most of the rest of it on meals, travel and personal expenses. The state claims the founder of Veterans of Oregon and Members of the Community spent "nothing or only token amounts on the programs described in its solicitations."

Oregon Attorney General John Kroger sued William "John" Neuman, Veterans of Oregon and Members of the Community (VOMC) and the for-profit telemarketer Associated Community Services (ACS), in Marion County Court.

Kroger says Neuman, apparently, a veteran himself, founded VOMC in 2003 and began the telemarketing campaign, with ACS, in 2007.

"Through a telemarketing scheme that began in or before April 2007, defendants have raised hundreds of thousands of dollars from Oregon residents through deceptive means, including by claiming falsely that donations would be used to provide food, shelter and medical care for needy veterans," the complaint states. "In reality, VOMC agreed to allow ACS, a for-profit telemarketing firm, to receive 80 percent of the donations raised in VOMC's name. To date, ACS has received more than $500,000 from Oregon donors who gave money to help the state's veterans."

The VOMC website states that "every penny of every donation is used to assist veterans, no overheads, no paid salaries or benefits to the administration - it all goes to help veterans," according to the complaint.

But Kroger says that "VOMC has spent nothing or only token amounts on the programs described in its solicitations. Instead, VOMC uses the small share of donations it receives from telemarketing for purposes not disclosed to donors. VOMC uses much of its 20 percent share of donations to pay the travel, meal, and personal expenses of defendant John Neuman, his wife, and other members or associated of VOMC as they travel to various locations in Oregon to award honorary medals to veterans, which the organization purchases for approximately $6 apiece."

Kroger wants VOMC dissolved, $25,000 fines for each violation of the Unlawful Trade Practices Act, fines for violations of the Charitable Solicitations Act, and he wants Neuman barred from serving as an officer of any charity or putative charity. Kroger also wants the donations returned, and costs.

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