AG Ferguson: Sham charity must pay $95,000 to be donated to legitimate veterans’ charity
Healing Heroes Network spent less than one percent of its revenue on veterans’ medical care
SEATTLE — Attorney General Bob Ferguson today announced that a sham veterans’ charity is legally required to pay $95,000 to Washington state. Healing Heroes Network Inc. deceived donors into believing most of their donations would help provide medical care for wounded veterans. In fact, it spent less than one percent of individuals’ donations on veterans’ medical care. For example, in 2016, the charity received $2.7 million in donations nationwide, yet spent only $1,128 to fund veterans’ medical care.
Today’s consent decree, filed in King County Superior Court, resolves Ferguson’s lawsuit against the Florida-based charity and its directors, Stacey and Allan Spiegel, for misleading donors. Thousands of Washingtonians made donations to Healing Heroes Network, also known as the Injured America Veterans Foundation. Consistent with the donors’ intent, Ferguson will donate the $95,000 recovery to a nonprofit that legitimately helps veterans receive medical care.
“Few illegal acts are more appalling than exploiting the sacrifice of wounded veterans to line your own pockets,” Ferguson said. “My office will continue to hold accountable perpetrators of sham charities — and we will continue standing up for Washington’s veterans.”
Washington will donate the full recovery amount to a legitimate charity that helps veterans nationwide, including veterans in Washington, receive medical care. This charity will be confirmed at a later date.
The consent decree requires Healing Heroes Network to permanently stop soliciting donations. Healing Heroes ceased its operations in 2018 after learning of the states’ investigation, but this judgment ensures the charity will remain closed. Its owners, Stacy and Allan Spiegel, are also now legally prohibited for five years from overseeing or managing any nonprofit organization.
This consent decree resolves both Washington’s lawsuit and a multistate investigation into the sham charity’s practices. Washington led a multistate investigation into Healing Heroes Network in partnership with Florida, Ohio, Oregon, Illinois, Maryland, Minnesota, Missouri, New Mexico, California, and Virginia.
The company received many of its donations through telemarketing campaigns. Nearly 4,000 Washingtonians donated to Healing Heroes Network from 2015 to 2017 through its telemarketing alone.
The charity’s main claim in its promotions was that it helped veterans receive medical care. One of its telemarketing scripts claimed that it referred veterans to a “nationwide network of providers” and “provides financial assistance for services not covered, or delayed under the U.S. Department of Veterans Affairs benefits.”
Healing Heroes maintained a list of 164 providers in 34 states. Most were chiropractors, massage therapists, hyperbaric oxygen specialists or acupuncturists. However, some providers reported that they rarely received a referral from Healing Heroes. Of the reported eight providers listed in Washington, two never received a single referral and three stopped practicing by 2017. One provider’s office was unaware of Healing Heroes.
One Washington massage therapist billed Healing Heroes for $1,200 worth of massages for a patient. The same provider eventually received a check for $300. Healing Heroes advised the provider to consider the remaining $900 balance her donation.
In some years, the charity did not provide any medical assistance to any Washington veterans at all, even as it raked in donations from thousands of Washingtonians. From 2015 through 2017, the sum total of services provided to wounded Washington veterans consisted of one tablet computer given to one veteran.
Healing Heroes spent the vast majority of its revenue on fundraisers, advertising, salaries, rent, insurance, t-shirts and decals to sell, office expenses and accounting services. It claimed in its 2016 reporting to the Internal Revenue Service that it spent $250,000 on “program expenses,” which included advertising and “community outreach” such as pub crawls it organized as advertising.
From 2015 through 2017, Healing Heroes bought at least $533,000 worth of T-shirts and decals from Charity Resources, also known as Spiegel Outfitters — a company owned by Neal Spiegel and Benjamin Spiegel, Stacey and Allan Spiegel’s two sons. Stacey Speigel then sold this merchandise for profit under a new company, “Hero Giveaways.”
Stacey Spiegel formed the new company immediately after Healing Heroes dissolved under pressure from the states’ investigation. She sold the merchandise on the Hero Giveaways website, claiming that proceeds would benefit wounded veterans. In fact, Ferguson’s suit asserts, Stacey Spiegel’s new operation was a for-profit business that has given nothing to wounded veterans or any other charity.
Ferguson’s lawsuit asserts that this conduct violates the Charitable Solicitations Act, which prohibits false or misleading solicitations for charitable donations. The suit also asserts Healing Heroes Network violated the Promotional Advertising of Prizes Act in one of its promotions: a sweepstakes letter to consumers that failed to properly inform consumers of the odds of winning the sweepstakes prize.
Assistant Attorneys General Craig Rader and Ben Brysacz are leading the case for Washington.
Operation Donate with Honor
Today’s judgment is part of Operation Donate with Honor, a nationwide effort against veterans’ fundraising fraud coordinated by the Federal Trade Commission and the National Association of State Charities Officials. Attorneys General and other state agencies from all 50 states, the District of Columbia, Puerto Rico, Guam and American Samoa are joining the project by leading more than 100 education and enforcement efforts.
Other lawsuits part of this initiative include one against Fallen Hero Bracelets, which resolved in November 2020 when a Pierce County Superior Court judge ordered the sham charity to pay nearly half a million dollars to legitimate veterans charities.
Scammers can use charities to prey on generosity. Do plenty of research before donating money. To make sure a charity is legitimate:
• Ask for detailed information about the organization, including an address, phone number and name
• Ask the organization what percentage of donations benefit the actual cause
• Check if the charity is registered with the Washington Secretary of State
Visit ftc.gov/charities for more information on how to avoid charity scams.
Consumers affected by these charities’ deceptive conduct, or any other charity or business, may file a complaint with the Attorney General’s Office at https://www.atg.wa.gov/file-complaint.