Editor's note: Watch Part One of Drew Griffin's investigation and tune in on Tuesday at 8 and 10 p.m. ET for Part Two.
A national charity that vows to help disabled veterans and their families has spent tens of millions on marketing services, all the while doling out massive amounts of candy, hand sanitizer bottles and many other unnecessary items to veteran aid groups, according to a CNN investigation.
The Disabled National Veterans Foundation, based in Washington, D.C., and founded in 2007, received about $55.9 million in donations since it began operations in 2007, according to publicly available IRS 990 forms.
Yet according to the DNVF's tax filings with the IRS, almost none of that money has wound up in the hands of American veterans.
Instead, the charity made significant payments to Quadriga Art LLC, which owns two direct-mail fundraising companies hired by the DNVF to help garner donations, according to publicly available IRS 990 forms.
Quadriga's other clients include Charity Watch F-rated National Veterans Foundation, F-rated, megawealthy Paralyzed Veterans of America, F-rated animal scam SPCA International and the D-rated, megawealthy Humane Society of the United States. HSUS pays Quadriga over $10 million a year to hoodwink animal lovers. Quadriga also has an extensive overseas fundraising operation and boasts of half a billion dollars in annual revenue.
It is way past time to strenghen the laws for commercial fundraising contractors and enforce the existing ones. Canada and the UK both do a better job protecting the public from charity con artists. In the meantime, media exposure is equally important. I admire and thank David Fitzpatrick and Drew Griffin for airing this important story in the face of legal threats from Quadriga and bullying from DVNF.
Quadriga takes advantage of struggling nonprofits by convincing them to sign contracts that ultimately make it impossible for them to ever pay off their debts. Quadriga charges outrageously for their services and uses all their own companies and facilities so the charities have no chance of even knowing what is happening until it is too late. .
They bill for consulting which determines what is mailed using the charities non-profit mail status and often the charities donor list to mail as a for-profit company at a rate reserved for charities, they own the rental list company, the china-based factories that make all the silly premiums, and print all the outrageous packaging in their china factories, the phone solicitor company, and Brickmill who receives and processes all the mail so the charity never even sees what is happening.
After all the upcharging for all the different services, there is no possible way for the charity to ever pay their debt while the Schulhof family gets richer and richer at the cost of the donors, the charity and worst of all, the mission of the charity and those in need for whom the charity was originally established.
There are many other charities in the same boat as the ones mentioned above. The charities are certainly at fault for breaking the rules of their nonprofit status, but the devil is in the details to which they are unaware at the time of the negotiations.
It is very sad to think that the Schulhof family got so caught up in the millions going into their pockets that they forgot how many less fortunate people there are that truly rely on the gifts of donros and legitimate charities for their very existence. Shame on them!
AC 360 needs to go after Quadriga Arts. They are an international corporation, with an LLC subsidiary in the US, but at least in the US they can be directly confronted through the state where they are organized. They are headquartered in NYC, but wherever they are organized, the state attorney general there can initiate proceedings to revoke their LLC status for fradulent activity and thus render their contracts with customer groups void. 360 should start dealing with political figures like a state attorney general to get action. Alternatively, state consumer protection agencies or the FTC might prove helpful in going after Quadrigga. Please, Anderson. You would be doing a real public service!
why can't they be prosecuted for false advertising. if you donate, you have an assumption that your money is going to be used wisely and not for m&m's
It seems that the group HEZBOLLAH, has a few new members working mortgage frauds in usa
we have learned that top ranking members Mahmoud Razzaghi,Maryam Khavar,Mike Khavar,
and many other names used by these people, including Khavari, Bayat, Khaleghi,Zaghami,Imani,
Just to name a few names that mortgages have been obtained through the Bank of America,
Bank of New York, US Bank,
properties are bought forclosed on and short saled to other family members ,,using false ids, when the properties are sold they use insurance fraud to upgrade them
I am sure one door slammed in your face and one bizzare song lyrick will not deter you from getting to the bottom of this agency. They are praying on the emotion and genuine caring of all Americans to care for our veterens to somehow enrich themselves. Follow the money.
looks like a job for the FBI
The logo of this group is painfully familiar to me. My father has Alzheimer's and I am trying to allow him some financial freedom while seeking to find ways to limit solicitations as he is no longer able to understand his financial limits. Trying to track down groups such as these to speak with a human being to correct the problem is nearly impossible. We have received these packets with calculators, gloves, patches, etc many a time in the mail. Furthermore these companies sell the lists to other similar companies (or any of the other groups who use the same "fundraising" company) PACS are much the same, and are often impossible to reach with physical addresses being replaced on mailers with processing centre addresses. You cannot sent a POA document with a formal request to cease solicitations. Palin PAC is one I have never been able to track. Trust look on the website – you can submit info or become a supporter, but just try to get a response to a request to be removed from a solicitation list. I could find no phone or mailing address and I have yet to recieve a response from the online request for information. In the meantime, these organizations, in our case religious, conservative and veterans groups, continue to prey upon my dad. It is insidious.
I should also add the phone solicitation component which is also highly problematic. Anyone speaking with my dad on the phone can hear that he has a memory disorder.
I have been trying to have him removed from solicitation lists (both phone and mail) for a year now. I have sent well over 100 letters to different organizations. I cannot express how frustrating this has been. I feel like we need legislation to regulate this 'indiustry'.
Interesting, just try to contact these folks to ask "why". Not only will they not respond to your inquires but they make it almost imposible for folks like me to contact them and ask for ourselfs.
They arn't taking questions.
Reguarding the foiled terror plot...what's scary is the we don't know what we don't know. How many test bombs have been sent and made it through undetected via an airline?
Thank god your back and great to see your program once more at a ok time in INDIA
hope it was not just another mistake that the Indian guys seem to make on a regular basis.
Dear Anderson Cooper: I was horrified to see the story about this abominable charity that raised millions that never went to the disabled veterans on your 360 hour tonight!! These owners/administrators, should all be held responsible! Many of us who establish and/or work as volunteers and advisory boards with non-profits to aid wounded warriors/disabled veterans DO give the money we raise directly to helping these men and women who have given so much of themselves to their country! I work with Sanctuary Island, Inc., a tiny, new but determined to help the wounded, non-profit charity in Florida. News like this will hurt our efforts but we understand the rats have to be flushed out of the ratholes. We at Sanctuary Island, Inc. certified nonprofit are unpaid volunteers. We recently held our first Golf Tournament to help fund therapeutic riding classes for Wounded Warriors. Sanctuary Island Inc was founded by my nephew, a young man born with Cerebral Palsy, now in his late 40's, who earned a college degree, and learned to ride and jump horses back in the days of college, and now wants to "give back" by sponsoring this therapy for wounded warriors who cannot afford to pay for it. He began it with my sister, a nurse/administrator, (also his Mom), to help these warriors returning with injuries from Iraq and Afghanistan, and their families, to recover using the therapy that was such a great help to him: Horseback Riding. We just held our very first fundraiser for this cause. Our local citizens and businesses not only graciously contributed and sponsored seven wounded warriors to join in the day's golf outing and paid all their fees to participate, plus breakfast and lunch, they were proud and honored to play the round along with them at Spessard Holland Golf Course in Melbourne Beach, an Arnold Palmer designed course, just recently, on April 28th. We have wonderful photos of that event, that I'd be proud to share with you and I think you'd be very interested to see the diversity of people who participated, and of the warriors (who signed photo releases) and who courageously played to help raise funds for the next group of "home on the range" wounded buddies in this area to enjoy the therapeutic benefits of horseback riding that they are just completing. There are photos of them on horseback at these riding classes, too. At this golf outing, they enjoyed "a day of fun and being with people at home again"... at no cost to them or their families. It was a wonderful day, and wonderful to know that the money DOES GO to help these wounded service people regain their connection with their home world as they recover. So please, Americans and Anderson, don't think ALL veterans' charities are not doing what they say they are. You're welcome to check out http://www.sanctuaryisland.org
Wel welcome CNN's sharing in our cause! We don't have much, we're a new kid on the block, but what we have and what we can do, and the funds we raise, are for helping our wounded and recovering troops. Thank you for exposing this other fundraising scheme that has hurt not only the donors but the wounded troops' morale and recovery, and will likely adversely affect other honest charities like ours, where there's hard work and no paid staff. All volunteers. Thanks for standing up for our courageous troops in this matter. They deserve champions at home, cause they keep us safe here. Keep up the good work!
Melbourne Beach, Florida
I find this very disturbing, I donate to this cause a couple of times a year. I just never would have imagined that the money was not being handled properly. Why on earth would someone hurt our vets ? Who can we trust ?
Anderson Cooper goes beyond the headlines to tell stories from many points of view, so you can make up your own mind about the news. Tune in weeknights at 8 and 10 ET on CNN.
Questions or comments? Send an email
Want to know more? Go behind the scenes with AC361°