Veterans Charity Sued by California Over Fundraising

Help Hospitalized Veterans was sued by California Attorney General Kamala Harris over claims the charity engaged in fraudulent fundraising.

The Winchester, California-based organization engaged in self-dealing and paid excessive executive compensation, Harris’s office said yesterday in an e-mailed statement.

The suit, filed in state court in Riverside, east of Los Angeles, seeks to recover more than $4.3 million that was diverted from veterans’ programs and spent on golf memberships, a condominium for the officers, and excessive compensation to the group’s former president, Roger Chapin, and current president, Michael Lynch, Harris said.

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

Harris also seeks the removal of the group’s officers and directors.

The state attorney general also claims the organization used accounting gimmicks to inflate how much it spent on veterans’ services while artificially minimizing the amount reportedly spent on fundraising, resulting in false filings to the Internal Revenue Service and the Attorney General’s office, according to the statement.

The complaint couldn’t immediately be confirmed in electronic court records.

A representative of Help Hospitalized Veterans didn’t immediately return a phone call seeking comment yesterday on the lawsuit.

The case is California v. Help Hospitalized Veterans, California Superior Court, Riverside County (Riverside).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net