Former Orlando mayoral candidate Paul Paulson is being sued after six states and the Federal Trade Commission accused him of running his nonprofit Help the Vets Inc. as a "sham charity."
The lawsuit was settled
before it was filed, with Paulson agreeing to pay $1.75 million to legitimate veterans charities, which is more than double the amount he personally received from Help the Vets, Florida Attorney General Pam Bondi's office said.
Help the Vets received $11 million from 2014 to 2016 from donors who were promised their contributions would help wounded and disabled military veterans, according to a federal lawsuit filed in the U.S. District Court for the Middle District of Florida. But more than 95 percent of that money was not used to help veterans – instead the funds "almost entirely benefited" Paulson and the for-profit fundraisers he hired.
"Any benefit to veterans was merely incidental," the complaint says.
The lawsuit was filed by the FTC, Bondi and attorney generals in California, Maryland, Minnesota, Ohio and Oregon. Orlando Weekly
reached out to Paulson for a comment but did not hear back immediately.
Paulson, a Republican, ran against incumbent Mayor Buddy Dyer in 2015, ultimately losing by 30 points despite spending about $800,000. During the campaign, he was accused by a local artist of refusing
to pay for using an illustration without permission. The Orlando Sentinel
also reported on his veterans' charity, which had a number of "red flags," according to a nonprofit watchdog. Paulson, who most recently ran for state Agriculture Commissioner before dropping out, was elected
as the Orange County state Republican committeeman.
Paulson was president of Help the Vets until the end of 2016, after which he later assumed the role of secretary and treasurer. He was the nonprofit's only employee for most of the time and was in charge of negotiating and signing contracts with fundraising telemarketers – even going so far as to approve telemarketing scripts and direct mail materials used by fundraisers, the lawsuit states.
Help the Vets solicited donations via several fictitious business names, including American Disabled Veterans Foundation, Vets Fighting Breast Cancer and Military Families of America. The organizations all claimed to "fund veterans' medical care, operate a suicide prevention program for veterans, offer retreats for veterans recuperating from the stress of war and offer assistance to U.S. veterans fighting breast cancer," according to the complaint.
The different names allowed fundraisers to ask the same people to donate multiple times to what appeared to be different charities. The telemarketers were paid 85 to 90 percent of every dollar they raised, the lawsuit said.
The complaint alleged that any claims by Help the Vets that the nonprofit would use donors' contributions to help veterans were "false and misleading." The medical services that Help the Vets claimed to provide were actually just vouchers Paulson distributed for chiropractic treatment redeemable only at one Winter Garden clinic.
"Help the Vets engaged in virtually no special efforts to help amputees and severely injured vets," the complaint said.
The lawsuit also notes that a "24-hour suicide prevention hotline" that Help the Vets said it operated was actually just Paulson's personal cellphone. A "family retreat" program offered to veterans recovering from the stress of war consisted primarily of timeshare vouchers that could be used in Mexico. Only two timeshare vouchers were ever used, including once by Sherwood Shoff, a veteran who was on the board of Help the Vets at the time and later became its president.
The settlement agreement, which has not yet been approved by the federal court, permanently bans Paulson from soliciting charitable contributions and running a charity. Help the Vets will relinquish its remaining assets in the agreement and is no longer registered with the Florida Department of Agriculture and Consumer services.
"It is reprehensible that anyone would prey on the good intentions of people trying to help our heroes and I will not let the immoral actions of a few bad actors taint the good work of our legitimate charities," Bondi said in a statement.
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