Tag: Washington State

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AG Ferguson files lawsuit against founder of Vancouver charity for misusing more than $1.2 million meant to serve BIPOC communities

Attorney General Bob Ferguson today announced a lawsuit against Vancouver nonprofit Noble Foundation and its founder and executive director, Ophelia Noble, along with foundation directors, and Noble’s family and friends. Ferguson asserts since 2019, Noble misappropriated or failed to account for $1 million in charitable grants the foundation received to serve communities of color in southwest Washington. 

In a lawsuit filed in Clark County Superior Court, Ferguson asserts Noble paid herself hundreds of thousands of dollars from foundation funds, used foundation money to buy vehicles for herself and her mother and directed the foundation to buy her father’s house then resell it to her at a deep discount. The lawsuit names Noble, the Noble Foundation, foundation directors Douglas Noble (Noble’s father), Alice Prejean (Noble’s mother), Alyce Noble, Joann Hampton and Virginia Prioleau. 

Noble’s misconduct includes numerous violations of Washington’s Nonprofit Corporation Act, with potential penalties of up to $5,000 per violation. Ferguson will ask the court to order Noble and her co-defendants to return the diverted money so that it can be directed to an organization that can use it for its intended charitable purposes, dissolve the foundation and bar Noble and her other co-defendants from serving on the boards of any Washington nonprofit in the future. 

“Preying on the generosity of Washingtonians is shameful — and unlawful,” Ferguson said. “We will hold those responsible accountable and work to ensure the diverted money is paid back and directed towards its intended purpose: advancing racial equity and serving communities of color.”

Noble Foundation was founded to serve BIPOC communities

Ophelia Noble started The Noble Foundation in 2012 to serve communities of color in Vancouver, Kelso and Longview. 

In 2019, the foundation expanded rapidly, securing hundreds of thousands of dollars from the Washington State Office of Financial Management as part of a state effort to encourage members of undercounted Black, Indigenous and People of Color (BIPOC) communities to register for the 2020 Census.

The foundation continued to grow when the pandemic hit. Operating as Our Place/Nuestra Casa Multicultural Center, the foundation provided emergency rent assistance, cash assistance for general household needs, and community education about the dangers of COVID-19 and the importance of vaccinations. It subsequently secured major contracts with counties and the state to facilitate the Treasury Rent Assistance Program and Eviction Rent Assistance Program, disbursing more than $1.3 million on behalf of Clark County and the Washington State Department of Commerce between 2021 and 2023.

As public attention focused more sharply on racial justice and policing issues, the foundation created Southwest Washington Communities United for Change, a tax-exempt social welfare organization. Southwest purportedly focused on organizing protests and trying to increase participation and political representation for BIPOC communities in Clark and Cowlitz counties. Southwest brought in several hundred thousand dollars from grantors interested in establishing a BIPOC-led political organization serving Southwest Washington.

It appears that most of the public dollars received by the foundation and its related entities were spent properly and not misappropriated. However, large grants from private and community foundations, were not subject to the same level of fiscal controls. The nonprofits raised approximately $1.5 million from such foundations including the Northwest Health Foundation, Social Justice Fund Northwest, the Satterberg Foundation, the Community Foundation for Southwest Washington, Group Health/Inatai Foundation and the Seattle Foundation. 

Misappropriations go back years

Beginning in 2019, Noble used her position as executive director to misappropriate large sums of donated charitable funds from the foundation’s accounts. 

The Attorney General’s investigation revealed that Noble and her family received direct, documented payments or benefits of nearly $1 million. Some examples:

  • In July 2021, Noble caused the foundation and Southwest to pay her $355,000 in “back pay,” for “contract services” purportedly provided between 2015 and 2021. There is no evidence that any contracts existed, any money was owed, or that these payments were approved by the entities’ boards.
  • The foundation paid Noble’s consulting company $310,000 for unspecified “executive director services” that were never approved by the board.
  • $200,000 was either withdrawn from the various foundation entities’ bank accounts without explanation or issued to unknown individuals in the form of cashier’s checks. Only Noble and the directors were authorized signers on these accounts.
  • In 2020, Noble directed the foundation to purchase her father’s house for approximately $200,000, but she put her name on the deed as well as the foundation’s. The following year, she paid the foundation $100,000 for its interest in the home. When the foundation transferred title to Noble in 2022, the house was worth at least $324,000, meaning Noble gained $224,000 in equity. There is no evidence the foundation’s board reviewed and approved these transactions, which were clearly a conflict of interest for Noble. 
  • In 2020, Noble used foundation money to purchase a 2019 Nissan Armada, which she used as her personal vehicle. She used foundation funds to make upgrades to the vehicle and cover maintenance and gas. The foundation also purchased a second vehicle, which Noble later transferred to her mother.
  • Noble, her family, and other directors used foundation money to fund over $65,000 in additional purchases that lack a clear connection to the entities’ charitable purposes, including for gift cards, meals, groceries, gas, travel, cell phones, personal clothing, and even alcohol and cigarettes.

Other charity lawsuits

The Legislature identified the Attorney General’s Office as the agency tasked with enforcing the Nonprofit Corporation, Charitable Solicitations and Charitable Trust Acts. These laws ensure that nonprofits and entities that solicit charitable donations or manage charitable assets follow the laws adopted by the Legislature. These laws ensure that funds intended for charity are not misused.

The Attorney General’s Office has three attorneys who specifically focus on charity cases involving the misuse or misappropriation of funds solicited for a charitable purpose.

Recent enforcement actions include:

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AG Ferguson: Sham charity must pay $95,000 to be donated to legitimate veterans’ charity.

Attorney General Bob Ferguson today announced that a sham veterans’ charity is legally required to pay $95,000 to Washington state. Healing Heroes Network Inc. deceived donors into believing most of their donations would help provide medical care for wounded veterans. In fact, it spent less than one percent of individuals’ donations on veterans’ medical care. For example, in 2016, the charity received $2.7 million in donations nationwide, yet spent only $1,128 to fund veterans’ medical care.

Today’s consent decree, filed in King County Superior Court, resolves Ferguson’s lawsuit against the Florida-based charity and its directors, Stacey and Allan Spiegel, for misleading donors. Thousands of Washingtonians made donations to Healing Heroes Network, also known as the Injured America Veterans Foundation. Consistent with the donors’ intent, Ferguson will donate the $95,000 recovery to a nonprofit that legitimately helps veterans receive medical care.

 “Few illegal acts are more appalling than exploiting the sacrifice of wounded veterans to line your own pockets,” Ferguson said. “My office will continue to hold accountable perpetrators of sham charities — and we will continue standing up for Washington’s veterans.”

Washington will donate the full recovery amount to a legitimate charity that helps veterans nationwide, including veterans in Washington, receive medical care. This charity will be confirmed at a later date.

The consent decree requires Healing Heroes Network to permanently stop soliciting donations. Healing Heroes ceased its operations in 2018 after learning of the states’ investigation, but this judgment ensures the charity will remain closed. Its owners, Stacy and Allan Spiegel, are also now legally prohibited for five years from overseeing or managing any nonprofit organization.

This consent decree resolves both Washington’s lawsuit and a multistate investigation into the sham charity’s practices. Washington led a multistate investigation into Healing Heroes Network in partnership with Florida, Ohio, Oregon, Illinois, Maryland, Minnesota, Missouri, New Mexico, California, and Virginia.

Case background

The company received many of its donations through telemarketing campaigns. Nearly 4,000 Washingtonians donated to Healing Heroes Network from 2015 to 2017 through its telemarketing alone.

The charity’s main claim in its promotions was that it helped veterans receive medical care. One of its telemarketing scripts claimed that it referred veterans to a “nationwide network of providers” and “provides financial assistance for services not covered, or delayed under the U.S. Department of Veterans Affairs benefits.”

Healing Heroes maintained a list of 164 providers in 34 states. Most were chiropractors, massage therapists, hyperbaric oxygen specialists or acupuncturists. However, some providers reported that they rarely received a referral from Healing Heroes. Of the reported eight providers listed in Washington, two never received a single referral and three stopped practicing by 2017. One provider’s office was unaware of Healing Heroes.

One Washington massage therapist billed Healing Heroes for $1,200 worth of massages for a patient. The same provider eventually received a check for $300. Healing Heroes advised the provider to consider the remaining $900 balance her donation.

In some years, the charity did not provide any medical assistance to any Washington veterans at all, even as it raked in donations from thousands of Washingtonians. From 2015 through 2017, the sum total of services provided to wounded Washington veterans consisted of one tablet computer given to one veteran.

Healing Heroes spent the vast majority of its revenue on fundraisers, advertising, salaries, rent, insurance, t-shirts and decals to sell, office expenses and accounting services. It claimed in its 2016 reporting to the Internal Revenue Service that it spent $250,000 on “program expenses,” which included advertising and “community outreach” such as pub crawls it organized as advertising.

From 2015 through 2017, Healing Heroes bought at least $533,000 worth of T-shirts and decals from Charity Resources, also known as Spiegel Outfitters — a company owned by Neal Spiegel and Benjamin Spiegel, Stacey and Allan Spiegel’s two sons. Stacey Speigel then sold this merchandise for profit under a new company, “Hero Giveaways.”

Stacey Spiegel formed the new company immediately after Healing Heroes dissolved under pressure from the states’ investigation. She sold the merchandise on the Hero Giveaways website, claiming that proceeds would benefit wounded veterans. In fact, Ferguson’s suit asserts, Stacey Spiegel’s new operation was a for-profit business that has given nothing to wounded veterans or any other charity.

Ferguson’s lawsuit asserts that this conduct violates the Charitable Solicitations Act, which prohibits false or misleading solicitations for charitable donations. The suit also asserts Healing Heroes Network violated the Promotional Advertising of Prizes Act in one of its promotions: a sweepstakes letter to consumers that failed to properly inform consumers of the odds of winning the sweepstakes prize.

Assistant Attorneys General Craig Rader and Ben Brysacz are leading the case for Washington.

Operation Donate with Honor

Today’s judgment is part of Operation Donate with Honor, a nationwide effort against veterans’ fundraising fraud coordinated by the Federal Trade Commission and the National Association of State Charities Officials. Attorneys General and other state agencies from all 50 states, the District of Columbia, Puerto Rico, Guam and American Samoa are joining the project by leading more than 100 education and enforcement efforts.

Other lawsuits part of this initiative include one against Fallen Hero Bracelets, which resolved in November 2020 when a Pierce County Superior Court judge ordered the sham charity to pay nearly half a million dollars to legitimate veterans charities.

Scammers can use charities to prey on generosity. Do plenty of research before donating money. To make sure a charity is legitimate:

  • Ask for detailed information about the organization, including an address, phone number and name
  • Ask the organization what percentage of donations benefit the actual cause
  • Check if the charity is registered with the Washington Secretary of State