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I-Team: Veterans Charity Questioned

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FORT LAUDERDALE (CBS4) – Right now there are more than 250 organizations operating in Florida that use military patriotism to raise nearly $700,000,000 dollars in donations every year.

According to the Florida Department of Agriculture records at least 255 organizations are either military based or use the word “Army,” “Marine”, “Navy,” “Air Force,” “military” or “veteran” in their organization’s name. Combined those groups raised $686,788,073.76 in 2008, the latest year for which figures are available.

But CBS4 Investigates uncovered serious questions about one of those veterans’ charities which is based here in South Florida.

CBS4 investigator Stephen Stock dug up the secrets behind the charity that might make you want to think again before you give. And Stock has some tips for those who want to be smarter givers.

Motorists find them just about everywhere, seemingly on just about every intersection around.

Groups wearing camouflage or fatigues which solicit passing motorists’ patriotism to raise money for veterans and military causes.

While some of these solicitors may be legitimately trying to help struggling veterans, the CBS4 I-Team discovered one group, which records show is based in Plantation, collecting serious questions about their methods and finances.

They are called the Disabled Veterans Foundation or DVF. And their fatigue and flag bearing solicitors can be found on street corners from Fort Lauderdale to Fort Myers, from Tamarac to Tampa.

In a video that plays immediately upon opening the  front page of its website, the Disabled Veterans Foundation claims that it gives 67.59% of money collected to food and housing for homeless veterans and that none of its directors get a salary.

But the CBS4 Investigates dug further and found IRS 990 tax records showing that’s not true.

IRS 990 forms are required to be filed by charities that receive $25,000 or more every year in donations. And believe it or not, Disabled Veterans Foundation (DVF), panhandling on the street more than qualifies.

According to Disabled Veterans Foundation’s 2009 990 the charity took in $266,132 in donations, grants and gifts for the year. That was way up from the $86,468 in contributions, gifts and grants that DVF collected in 2008.

According to DVF’s tax records, in 2009, the charity spent only 50.48% or $134,356 of the money it took in on actual food and housing for the veterans in 2009.  The records show DVF’s paid its president and director Jean Luc Veraguas, $33,000 in salary.

“I worked for him about three and a half years,” said former Disabled Veterans Foundation worker David Ketchel.

Ketchel said the Disabled Veterans Foundation and president Jean Luc Veraguas actually helped him after he left the Army in 1986 and fell in with drugs. Ketchel served at Fort Riley, Kansas, and in Germany from 1979 to 1986 and he showed us his 214 discharge papers to prove it.

“I’ve got to admit he did help me when I first got out because I had a really bad drug problem when I first met him,” said Ketchel of Veraguas and DVF.

Ketchel said he went to work for DVF in 2007, panhandling for money, traveling and learning from the inside how it all worked.

“Then I started looking and looking at it and I started getting pissed off more and more and more,” said Ketchel.

Ketchel said the more he learned, the more troubled he became about where all the money was really going.

Finally he quit this past March.

“This is one of the reasons I stopped working with him (Veraguas),” said Ketchel.

The charity’s 990 tax records show he had reason to be concerned.

In 2010, the charity reports taking in $699,403.

In an itemized accounting on IRS 990 form page 10, DVF spent only 45.7% ($319,676) of the money collected on veterans services.

(See page 10 of the 2010 IRS 990)

But the 990 form shows DVF spent $107,717 on travel.

The charity spent $52,152 on booth and kiosk rentals, $12,394 on office expenses and $173,038 on salaries, payroll taxes and fees including a $42,000 salary paid to director Jean Luc Veraguas and another $33,770 salary paid to fundraising coordinator David Bailey and another $38,860 salary paid to office manager Nicolette Globus.

“Whenever you hand cash over to someone on the street there is absolutely no way of tracking how your donation is used,” said Laurie Styron of Charity Watch, based outside Chicago.

“What should be a very big red flag for donors is that if there are some discrepancies with what the charity reports on its website and what the charity’s financial reporting tells us,”  said Styron. “There are troubling discrepancies between how the charity (DVF) is portraying itself on it’s website versus what the tax for it files with the IRS reveals.”

Click Here to Link to Charity Watch

At our request Styron analyzed DVF’s 990 forms and found troubling questions that she said should serve as a red flag to potential donors.

“From a governance perspective this charity is a one man operation. The president of this charity gave himself voting right for the entire board of directors,” Styron said. “This is unheard of in the charity world.”

The 990 shows that director and that president Jean Luc Veraguas “has voting rights for all directors.”

“Nobody other than the president has any real power,” said Styron of DVF and Veraguas. “You are putting your trust in this one person and how much do you know about this person.”

(See page 21 of the 2010 990 form.)

What’s more, the CBS4 Investigates discovered that Jean Luc Veraguas is the registered agent and vice president of a FOR PROFIT business called Neu Ways Inc. Neu Ways Inc.’s business address is the exact same address as the Disabled Veterans Foundation.

Florida Department of State business records also show that Neu Ways, Inc.’s CEO is the fundraising coordinator for the Disabled Veterans Foundation: David Bailey. The same state business records show Neu Ways, Inc.’s president is Jean Luc’s wife.

“It was getting to be he was taking more money and more money,” said former DVF worker David Ketchel.

CBS4 Investigator Stephen Stock asked Ketchel “He was taking more money?”

“He was taking more yeah,” said Ketchel.

Stock asked, “Jean Luc?”

“Oh you know him?” replied Ketchel.

CBS4 Investigates knows him because we’ve been trying for more than a month to get Jean Luc Veraguas to explain what he’s doing and where all this money is going.

“Jean Luc… Stephen Stock I’ve been trying to get you,” said CBS4 Investigator Stephen Stock.

“I’m a busy guy,” replied Jean Luc Veraguas.

We went to the address listed as his FOR PROFIT business, Neu Ways, Inc.

“I wondered if we could talk to you real quick?” asked CBS4 Investigator Stephen Stock. “Can we talk to you real quick?”

“No,” replied Jean Luc Veraguas while standing outside the address which is also listed as the headquarters for the Disabled Veterans Foundation on its 990 tax forms in 2008 and 2009.

Property records show this same address is also Veraguas’ house.

  • Click Here to View the Veraguas Property Records.

“Do you run a legitimate business?” asked CBS4 Investigator Stock.

“You don’t come to my house,” replied Veraguas.

This same address was also listed for two years as the headquarters for the Disabled Veterans Foundation.

“Do you still not take a salary?” CBS4 Investigator Stock asked.

“Ok. Look. You know. You need to get off my property,” replied Veraguas.

“Is DVF legitimate?” asked Stock.

“Of course. Of course it is,” said Veraguas.

“How much money do you give to the veterans?” asked Stock.

“You need to get off my property,” said Veraguas.

Veraguas would not give any explanation about how a charity that claims to raise 700 thousand dollars in one year panhandling on the streets operates with the same directors as a FOR PROFIT business.

“Can you tell me what Neu Ways does?” Stock asked. “How much money do you give to the vets actually?”

Veraguas then shut the garage door on CBS4 Investigators.

CBS4 Investigates had one last question about the relationship between DVF and Neu Ways: Did the two companies co-mingle funds in any way?

So we went to another address listed for both.

In 2010 the Disabled Veterans Foundation changed its address from Jean Luc Veraguas’s house to an address around the corner and up the road at 1802 North University Drive in Plantation.

And according to Florida Department of State records, earlier this year, in 2011, Neu Ways, Inc., also changed its address from Veraguas’ house to the same address as DVF, 1802 North University Drive, Suite 102-322, in Plantation.

But when CBS4 Investigates went there to get answers, CBS4 Investigates found bulldozers turning the place into rubble.

So how can you make sure the money you actually give, goes to the people you want to assit?

Experts say you have to do your homework. Check out the charity and see how much money they keep for expenses and how much they give to actual programs.

And experts say if the charity won’t answer your questions beware.

Finally experts advise not to hand money out the window to anyone on the street because it’s very difficult to tell exactly who they are and where that money is going.

Click on the links below for more information or to search charities to see how they operate or how independent agencies rate the charities.

Florida Dept. of Consumer Services

Charity Navigator

Better Business Bureau

IRS

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