VietNow National Headquarters Inc. (VietNow), a national veterans organization headquartered at 1835 Broadway in Rockford, is being dissolved to settle a lawsuit filed by Illinois and 23 other states, including California, Michigan and Ohio.
Illinois Attorney General Lisa Madigan Monday announced the settlement, calling VietNow “an alleged non-profit corporation … that falsely claimed to help veterans overcome joblessness and post-traumatic stress disorder.”
A member of VietNow says this does not apply to local chapters of the organization. Eileen Boyce, of the Attorney General's office, says that's true, and that's why the settlement focuses specifically on the actions of the national headquarters.
"It's most important for everyone to understand that all of our Chapters are separate corporate entities and have never benefited from telemarketing. Each dollar earned by the local Chapters is used in their communities," Rockford Charter Chapter Treasurer Daniel Gilgan told WNIJ News.
Gilgan said the local chapters will continue to operate as before. "Rockford Charter Chapter has a long history of positive involvement in our community," he said. "The same thing can be said about our other Chapters as well."
There are more than 20 local chapters around the country, including Freeport and Dixon in northern Illinois.
VietNow and its 14-member board agreed to settle allegations that VietNow violated laws in Illinois and other states by, among other things, misleading donors as to who was soliciting donations and how those donations were actually used.
They also settled allegations that VietNow spent the overwhelming majority of donations on paid professional fundraisers and other administrative costs rather than on programs to help Vietnam and other veterans. This issue was raised in 2015 as well.
Madigan filed a lawsuit and agreed order in Cook County Circuit Court which removes all 14 VietNow board members and bans its four controlling officers -- Joseph Lewis (who became VietNow president in 2014), Steven Rucki, Richard Sanders and Terry Buscher -- from any future fundraising, charity management or oversight of any charitable assets in Illinois.
"I am very heartbroken," Lewis told the Chicago Tribune in a phone call. "This is the culmination of 34 years of helping veterans, and to go down this way really hurts," he said.
A receiver will be appointed by the court to shut down VietNow’s operations. Any remaining assets from VietNow will be distributed equally to two national veterans’ charities, both of which provide services to Illinois residents. They are:
- Fisher House Foundation Inc., a non-profit based in Rockville, Md., that provides housing for military families when loved ones are hospitalized for an illness, disease or injury.
- Operation Homefront Inc., a San Antonio-based charity that provides relief and family support programs to help military families overcome short-term obstacles so they don’t become long-term chronic problems.
“For years, VietNow has scammed donations from people who thought their money would be used to support necessary services for our military veterans,” Madigan said. “Instead, VietNow pocketed donations and did virtually nothing for veterans. Today’s settlement finally will put an end to VietNow’s egregious fraud.”
Each of the other 23 states involved will enter into a state-specific settlement agreement containing terms similar to those in the Illinois order.
In June 2017, Madigan settled a three-count complaint she filed in January 2016 against professional fundraiser Safety Publications that was soliciting donations for VietNow. That complaint alleged that Safety Publications:
- misled the donating public as to who was making the solicitation and how the donations would be used;
- acted on behalf of a charity without maintaining the required registration and failing to disclose or account for fundraising activities; and
- violated the consent decrees Safety Publications and its owners had previously entered into with Madigan’s office.
Madigan’s allegations stemmed from Safety Publication’s work with VietNow to raise money. Records showed only a fraction of the contributions Safety Publications collected actually went to pay for charitable programs.
Safety Publications failed to disclose that it was a paid fundraiser when making solicitation calls. The firm also failed to disclose or account for its paid fundraising activities on behalf of VietNow in annual financial reports filed with Madigan’s office. Records also showed that Safety Publications was not registered with Madigan’s office for a portion of the time that it was soliciting donations.