Virginia attorney general slaps veterans charity founder with $100,000 fine

Introduction

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FALLS CHURCH, Virginia — The Virginia attorney general’s office has shut down two veterans charities that allegedly misused $13 million in donations from unsuspecting Americans.

The Circle of Friends for American Veterans and the Center for American Homeless Veterans were the focus of a 2017 Center for Public Integrity investigation, along with Put Vets First! PAC, a related political action committee all based out of the same Falls Church office.

The organizations promised to help homeless veterans with food, shelter and job training, but they spent almost all of their money on professional telemarketers, which Public Integrity has also investigated.

As part of a settlement agreement with the state, retired Army Maj. Brian Arthur Hampton, the founder and operator of the three groups, has been permanently banned from soliciting donations and from serving any financial role for other nonprofits.

He also must split $100,000 among three charities “which provide real support” to homeless veterans, according to a news release issued today by Virginia Attorney General Mark Herring’s office. The charities are: Virginia Supportive Housing, the Bob Woodruff Family Foundation and Homes for our Troops.

Hampton also must cooperate in Herring’s ongoing investigation into third-party companies that contracted with Hampton’s organizations.

If Hampton doesn’t comply with the settlement agreement, he’ll have to pay more than $3.7 million for charities that help homeless veterans.

The New York Attorney General’s office, which had launched its own investigation into Hampton’s organizations, has also reached a “substantially similar” settlement agreement with Hampton, according to Virginia officials. 

Hampton could not be reached for comment.

Public Integrity has written extensively about the vast telemarketing networks run by Mark Gelvan and Richard Zeitlin, whose companies both contracted with Hampton’s organizations to raise millions of dollars. The telemarketers keep as much as 90 percent of what they raise for charities and political action committees.

“It is despicable that there are organizations out there that will deceive kind-hearted Virginians who just want to help homeless veterans in our communities,” Herring said. “My office will vigorously go after these bad actors who take advantage of the kindness of Virginians to benefit themselves.”

In a press release, Herring’s office also drew attention to an accounting maneuver revealed in 2017 by Public Integrity: Telemarketing expenses were “misleadingly” classified as program expenses rather than fundraising expenses “to lead prospective donors to believe that the organization was providing more support to homeless veterans than it actually was.”

James Edgar, a former staffer who worked for Hampton’s organizations, said today’s settlement agreement “means the end of a two-plus decade scam being pulled on the American people.”

Edgar said he believes action on the state level rather than the federal level shows that the Federal Trade Commission — the regulator tasked with enforcing telemarketing laws — lacks enforcement.

“I think it shows a great flaw in the use of our telephone system,” Edgar said, “where these numbers are so easily used for fraud.”

After he left Hampton’s organizations, Edgar filed an IRS complaint in October 2018, asking that the two nonprofits’ tax-exempt status be revoked. But Edgar said the IRS informed him that Hampton’s tax returns had been filed correctly from an accounting perspective.

If he wanted to pursue further action alleging misuse of donations, the IRS wrote, Edgar would need to reach out to a different department. He dropped the matter.

In July 2019, Hampton’s Put Vets First! PAC filed a termination report with the Federal Election Commission. By then, the PAC’s website had been taken down, as had the sites of the two nonprofits.

A Public Integrity reporter visited the longtime Falls Church-based headquarters of Hampton’s three organizations in June. The office was vacant. A property manager said Hampton did not leave a forwarded address.

Hampton is himself a veteran.

He enlisted in the U.S. Army in 1968, served a year in Vietnam in “psychological operations” during the war and was in the Army Reserves from 1970 to 1992, according to a biography he provided in 2017 to Public Integrity and personnel records from the Army and National Archive. He retired with the rank of major.

Hampton co-founded Circle of Friends for American Veterans in 1993 out of a bedroom in a small co-op apartment in Virginia. He later formed the Center for American Homeless Veterans, a “social welfare” nonprofit, and Put Vets First! PAC. The political action committee is part of a growing trend in politics, as Public Integrity reported in September.

By 2015, Hampton’s compensation had quadrupled in less than a decade to $340,126 for his work for his two nonprofits. He also started earning money from the PAC in 2017.

When reached by Public Integrity in 2017, Hampton defended his use of telemarketers that kept the vast majority of what they raised.

“Over the course of 24 years, I have tried every other fundraising technique known to me in over four decades with fundraising experience, most of them over and over again, with different variations,” Hampton said in an email to Public Integrity (he declined to answer questions in person). “None of those efforts produced revenue remotely close to the revenue generated by telemarketing.”

He also defended his compensation: “I am the head of three organizations. I am always working.”