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Local

Rockford-based VietNow will dissolve to settle fraud suit; Dixon chapter not affected

ROCKFORD — Illinois Attorney General Lisa Madigan announced a settlement Monday to dissolve VietNow National Headquarters Inc., a Rockford nonprofit agency that claimed to help veterans overcome joblessness and post-traumatic stress disorder, but spent millions of dollars on telemarketers and administration.

VietNow will cease operation and its assets will be split between two legitimate organizations that aid Vietnam veterans. The court order affects only the national VietNow organization and not the more than 20 local chapters across the country, including groups in Rockford, Freeport and Dixon.

Madigan sued the national charity after a 2015 Chicago Tribune investigation found that VietNow had raised more than $20 million between 2003 and 2014 and spent 80 percent of those donations on payments to for-profit telemarketers. Much of the remainder went to administrative expenses, according to the newspaper's investigation, leaving little for programs to help military veterans.

"For years VietNow has scammed donations from people who thought their money would be used to support necessary services for our military veterans," Madigan said. "Instead, VietNow pocketed donations and did virtually nothing for veterans. Today's settlement finally will put an end to VietNow's egregious fraud."

Madigan filed a lawsuit and agreed order Monday in Cook County Circuit Court against VietNow. The order dissolves the agency's 14-member board of directors and bans its four controlling officers from any future fundraising, charity management or oversight of any charitable assets in Illinois.

"It's a little frustrating because we're separate from the national VietNow organization," said Darrell Gilgan, treasurer of the Rockford VietNow chapter. "We'll continue on, and all of the local chapters will continue on."

In a phone interview with the Chicago Tribune on Monday, one of the board's controlling member, Joseph Lewis, said, "I am very heartbroken."

He said there was "no malice" on the charity's part but that he and other officers failed to provide proper oversight of its finances. "This is the culmination of 34 years of helping veterans, and to go down this way really hurts," he said.

A receiver will be appointed by the court to shut down VietNow's operations. Two employees who were at the Rockford office on Broadway declined to comment Monday.

The organization's assets will be distributed equally to Fisher House Foundation Inc., a nonprofit based in Rockville, Maryland, that provides military families housing when loved ones are hospitalized for an illness, disease or injury and Operation Homefront Inc., a San Antonio-based charity that provides relief and family support programs to help military families overcome short-term obstacles so they don't become long-term chronic problems. Both organizations provide services to Illinois residents.

The settlement was led by Illinois, California, Michigan and Ohio and joined by 20 other states. Each of the other 23 states investigating VietNow will enter into a state-specific settlement agreement with VietNow and its controlling directors containing terms similar to those in the Illinois order.

LOCAL CHAPTER

Rock River Valley VietNow will next meet at 7 p.m. Nov. 14 at VFW Post, 1560 Franklin Grove Road, Dixon.

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©2017 Rockford Register Star, Ill.

Visit Rockford Register Star, Ill. at www.rrstar.com

Distributed by Tribune Content Agency, LLC.

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