Attorney General Eric T. Schneiderman issued the following statement on the federal prison sentence of John Thomas Burch, Jr., president and founder of the National Vietnam Veterans Foundation:
“Mr. Burch duped generous donors and took advantage of military veterans to line his own pockets. This jail sentencing should serve as a reminder that exploiting donors and those in need have serious consequences—charitable funds cannot serve as the personal piggy bank for non-profit executives. We will continue to work with our partners in government to crackdown on charitable fraud and ensure that generous donations made by New Yorkers are put to good use.”
In November 2016, Attorney General Schneiderman shut down the National Vietnam Veterans Foundation, (the “NVVF”), and reached settlements with its former President and Founder, John Thomas Burch, Jr., and its Vice President, David Kaufman, after an investigation showed that NVVF was raising money through fraudulent misrepresentations. By 2014, NVVF was collecting nearly $9 million nationwide from its fundraising campaigns, soliciting small dollar donations from the public through direct mail and phone calls — purportedly to help Vietnam Veterans. Nearly all of the money raised through its direct mail campaigns was instead used to pay its fundraisers. For example, in 2014, $7.7 million of the $8.6 million raised was used to pay NVVF’s fundraisers. The fraction that actually made it to NVVF was further reduced by a pattern of abuse, mismanagement and misspending by NVVF’s former President, Burch.
As part of the settlement, Burch paid $100,000 to the Attorney General, the bulk of which was re-directed to a charity providing vital assistance to veterans and their families. Burch also repaid his severance pay received from NVVF and will cooperate with ongoing investigations into others associated with NVVF and its fundraisers. Burch will also be subject to a permanent nationwide bar on access to charitable.
Burch issued an apology to donors of NVVF and to Vietnam Veterans whom he exploited in order for fundraisers to collect money. Burch also admitted that NVVF had paid 90% of its donations to its fundraisers and admitted to deceptively marketing how solicited money would be spent.
The NVVF investigation was part of the Attorney General’s Operation Bottomfeeder, an ongoing effort that targets a pervasive business model of shell charities that exploit popular causes, the professional fundraisers who take the lion’s share of donations and make misrepresentations, and other entities who facilitate the abuses. Read more about the NVVF settlement here. The federal criminal case was brought by the U.S. Department of Justice.
This investigation into NVVF highlights the importance of AG’s Charities Bureau’s annual Pennies for Charities report, which reveals that charitable donations obtained by many professional fundraisers are largely spent on fundraising and administrative expenses, with only a small fraction left for charitable work. The latest Pennies for Charities report may be accessed here.
The A.G.’s Tips for Charitable Giving are available here.
Original press release can be found here.