State of Minnesota suing fundraiser for veterans' charity

When the phone rang in November 2015, Danette Crenshaw of Glencoe, Minn., declined to donate $20 to an organization called the Foundation for American Veterans.

So she was confused when she got a call from the same group a few days later, claiming that she had pledged $20 and asking that she immediately pay over the phone.

Things became more perplexing when the pledge reminders started appearing in the mail. Meanwhile, she and her husband, Jan, a U.S. Army veteran, kept getting the calls.

Concerned by what he thought were high-pressure tactics and deceptive messaging, Jan did some research and didn't like what he discovered.

"Basically it amounts to an outfit preying on senior citizens and ex-military," said Jan Crenshaw, who served in the Army from 1960 to 1967.

He contacted the Minnesota attorney general's office to file a complaint and in the process joined a growing number of Minnesotans who have found themselves swept up in a fundraising scheme that Minnesota Attorney General Lori Swanson says engages in deceptive solicitation and fails to provide required disclosures about what it is.

Swanson's office on Wednesday sued a Michigan company and its affiliate for sending the false "pledge reminders" and making other deceptive statements in a campaign to solicit donations.

The lawsuit against Associated Community Services Inc. (ACS) and one of its affiliates is the latest legal battle for the organizations, which have been the subject of at least 10 prior legal settlements with state regulators.

ACS entered into a judgment in 2011 with Oregon regulators in which it agreed not to misrepresent people who had pledged to donate. And it entered into settlements with Ohio and South Carolina for not disclosing its professional fundraiser status in calls it made for the Foundation for American Veterans, a Michigan-based charity.

"By sending fake pledge reminders, we believe they were trying to guilt people into donating money they otherwise didn't want to donate," Swanson said.

At least 28,000 Minnesotans have donated nearly $930,000 to the Foundation for American Veterans since 2011, according to Swanson's office. More than 35,000 Minnesotans asked ACS to put them on the foundation's do-not-call list.

Filed in Hennepin County District Court, the lawsuit alleges violations of state charity and consumer protection laws and seeks to have the company stopped from engaging in the illegal behavior. It also seeks monetary damages.

ACS did not return calls for comment.

Swanson said her office is still investigating the Foundation for American Veterans, which, according to the lawsuit, has only two employees who work out of their homes but generated $38.5 million in revenue from 2010 to 2014.

The foundation's website says it assists veterans where the federal and local governments leave off, through veterans' hospitals, homeless programs, educational programs and crisis programs.

According to Swanson's office, the foundation has paid ACS and its affiliates more than $27 million since 2010 to conduct its fundraising campaign. The foundation spends about 10 percent of its cash donations to help vets, while ACS and its affiliates get about 85 percent of the donations.

Mark Brunswick • 612-673-4434