Illinois Attorney General alleges charity claiming to help veterans was fraudulent

Illinois Attorney General Lisa Madigan says a Tennessee-based charity that claimed to send care packages to service members failed to ensure donations actually went to their intended recipients.

The charity, Operation Troop Aid, had partnered with Harris Jewelry, which has a store near the Great Lakes Naval Base and sells teddy bears dressed in military uniforms to raise money to support military service members, according to Madigan.

Part of the proceeds from the teddy bear sales were donated to Operation Troop Aid to fund the care packages, according to a settlement agreement filed in court Wednesday. Instead, Operation Troop Aid used the money for noncharitable purposes and never documented how the funds donated by Harris Jewelry were used, the settlement said.

Madigan said Operation Troop Aid agreed to shut down as part of the settlement. Its chief executive, 21-year Navy veteran Mark Woods, will be barred from working as a fiduciary, or soliciting donations, for nonprofits, the settlement said.

Woods couldn't be reached for comment.

In a statement, Harris Jewelry said it was "disappointed" by the allegations against Operation Troop Aid, and added that it has properly documented the contribution for each teddy bear purchased.

The announcement comes as part of a broader crackdown on charities that claim to benefit veterans and active duty service members, Madigan said.

The campaign, dubbed "Operation Donate with Honor," includes the Federal Trade Commission (FTC), attorneys general and charity regulators from all 50 states, and is designed to fight what Madigan called "fraudulent charities that scam consumers by falsely promising their donations will help veterans and service members."

The crackdown involved more than 100 similar actions against charities across the country, as well as an education campaign, according to the FTC.

Madigan alleged some charities promised deceptive prizes, while others falsely claimed donations would be tax deductible. Others charities, Madigan claimed, "engaged in flagrant self-dealing to benefit individuals running the charity … or stole money solicited for a veterans' charity."

In a news release, the FTC encouraged people to research a charity before donating, to ask where money will be spent and to only pay for donations by credit card or check.

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