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ATTORNEY GENERAL HERRING TAKES ACTION AGAINST DECEPTIVE VETERANS CHARITIES AS PART OF NATIONWIDE SWEEP

~ AG Herring has filed suit against Hearts 2 Heroes Inc., and has entered into a multistate settlement with Operation Troop Aid Inc. ~

RICHMOND (July 19, 2018) – Attorney General Mark R. Herring today announced that his office has taken legal action against two deceptive charitable organizations that he believes have conned Virginians by falsely promising their donations would help veterans, when the money really went to benefit those operating the so-called charities. Attorney General Herring has filed suit against Hearts 2 Heroes Inc., a for-profit company doing business as Active Duty Support Services Inc., and has entered into a settlement with Operation Troop Aid Inc. and its president and chief executive officer to resolve a multistate investigation of the charity. The actions are part of “Operation Donate with Honor,” a nationwide sweep to crackdown on fraudulent charities that exploit the name of America’s veteran community to solicit donations.
 
“Virginians are caring people who want to give back to veterans who have risked their lives to keep our country safe. Charities that deceptively solicit funds from donors who want to help veterans are disgraceful and should be held accountable for their efforts to make money on the good name of those who have served our country,” said Attorney General Herring. “I hope these enforcement actions send a strong message to similar organizations that they need to be honest about where their money is going, and make sure they follow through on their promises.”
 
Hearts 2 Heroes
Attorney General Herring has filed a lawsuit against Hearts 2 Heroes, a for-profit company doing business under the name Active Duty Support Services Inc. The business conducts door-to-door sales of “care packages” that will allegedly be sent to service members overseas. The lawsuit alleges violations of the Virginia Consumer Protection Act and Virginia’s Solicitation of Contributions law through misrepresentations regarding the nature of the business and the care packages purchased, and the use of donated funds. The lawsuit alleges that the charity violated state charitable solicitation laws in the following manner:
 
  • Leading prospective donors to believe that Hearts 2 Heroes is a charity, when it is not, or that donations made are tax deductible, when they are not;
  • Delivering care packages, if delivered at all, to military bases in the United States, not overseas as represented;
  • Representing to consumers that staff were veterans or volunteers when in fact those staff were not veterans or volunteers; and
  • Employing staff who would “skim” cash donations for themselves.
 
The lawsuit asks the court to prohibit Hearts 2 Heroes from continuing to solicit donations, as well as award restitution to the affected consumers or impose a constructive trust on all funds received so that they will be distributed for legitimate charitable purposes. The suit also seeks an award of civil penalties, and reimbursement of the Commonwealth’s costs, investigative expenses and attorneys’ fees.
 
Operation Troop Aid Inc.
Attorney General Herring has entered into a settlement between 16 states and Operation Troop Aid Inc. and its president and chief executive officer to resolve a multistate investigation of the charity. The settlement resolves allegations that the Tennessee-based charity violated state charitable solicitation laws, including Virginia’s Solicitation of Contributions law, by improperly spending funds for purposes other than their solicited purpose and using unfair, false, misleading, or deceptive solicitation and business practices. 
 
The multistate group alleges the charity violated state charitable solicitation laws in the following manner:
 
  • Failing to conduct proper oversight of a commercial co-venture called “Operation Teddy Bear,” in which certain retail stores sold teddy bears in military uniforms that would supposedly provide a fixed dollar amount to the charity for each bear sold for the express purpose of sending care packages to service members;
  • Failing to maintain donated funds as restricted funds, even when designated for a particular purpose, and spending funds improperly on non-charitable purposes; and
  • Using donated funds for purposes other than those expressly represented as the charitable purpose of the charity, and engaging in unfair, false, misleading, or deceptive solicitation and business practices.
 
The settlement requires the charity to dissolve and prohibits the president and chief executive officer, Mark Woods, from becoming an employee, officer, director, board member, or assuming any fiduciary role with a nonprofit corporation, and from soliciting on behalf of a nonprofit corporation. The charity and Woods are also prohibited from violating state charitable solicitation statutes. The settlement includes a $10,000 civil penalty enforceable by all the states to be held in abeyance to ensure compliance with the injunctive terms of the settlement.
 
The 16 states involved in the settlement are California, Delaware, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maryland, Nevada, New York, North Carolina, Pennsylvania, Tennessee, Virginia, and Washington.
 
Attorney General Herring has made it a priority to combat deceptive charities, especially those that target Virginians supporting veterans. In December 2017, Herring announced a settlement between 24 states and VietNow National Headquarters, Inc., an Illinois charity that falsely represented that donations would help local veterans, resulting in the organization's dissolution. The settlement appointed a receiver to dissolve VietNow, obtained an injunctive relief against VietNow's directors and officers and required their cooperation in investigations of VietNow's professional fundraisers.
 
Since 2014, Attorney General Herring's Consumer Protection Section has recovered more than $246 million in relief for consumers and payments from violators. Following a major reorganization and enhancement in 2016, the OAG's Consumer Protection Section has been even more effective in fighting for the rights of Virginians.
 
Virginians who have a question, concern, or complaint about a consumer matter should contact Attorney General Herring's Consumer Protection Section:

 
Today’s enforcement actions are being announced in conjunction with “Operation Donate with Honor,” a joint effort between Virginia, other states, and the Federal Trade Commission to crack down on fraudulent charities that falsely claim to benefit veterans and service members.

AG HERRING JOINS BI-PARTISAN EFFORT TO FIGHT LEGISLATION THAT WOULD TERMINATE STATES’ ABILITY TO PREVENT PREDATORY LENDING

RICHMOND (June 28, 2018) – Today, Attorney General Mark Herring joined a bi-partisan effort urging U.S. Congressional leadership to vote againstHR 3299 (“Protecting Consumers’ Access to Credit Act of 2017”) and HR 4439(“Modernizing Credit Opportunities Act”). The bipartisan coalition of 20 attorneys general sent a letter to leadership in the U.S. Senate expressing their opposition to the proposed legislation, which could potentially invalidate the state’s ability to limit interest rates on payday and other high interest loans, and undermine the state’s ability to enforce consumer protection laws.

“One of my top priorities as Attorney General has been to protect Virginians from predatory lenders that prey on individuals who are looking for a way out of a difficult financial position,” said Attorney General Herring. “We need stronger laws to protect Virginians and Americans from predatory loans, but these bills would weaken the consumer protection laws we already have in place. I join my fellow state attorneys general in urging Congress against the further restriction of a state’s ability to protect their citizens from abusive lenders.”

As the attorneys general expressed in the letter, HR 3299 and HR 4439 would constitute a substantial expansion of the preemption of state usury laws, which have long been recognized as the purview of the individual states. Over decades, states have crafted laws that create a careful balance between the need for access to credit and the need to ensure that loans are offered on terms that do not create consumer harm.

Attorney General Herring created the OAG's first Predatory Lending Unit to investigate and prosecute suspected violations of state and federal consumer lending statutes, including laws concerning payday loans, car title loans, consumer finance loans, mortgage loans, mortgage servicing, and foreclosure rescue services. The Unit also focuses on consumer education so Virginians are aware of the potential risks of these loans, as well as alternatives.

In recent years, Attorney General Herring and his team have focused on online lenders, which have been a growing percentage of the lending market, but can still present the same risks as any payday or motor vehicle title lender. To date, the Predatory Lending Unit has recovered more than $25 million in restitution and forgiven debt from online lenders, including $15.3 million from CashCall$4 million from MoneyKey$3.4 million from Opportunity Financial, and $2.7 million from MoneyLion.

During his administration, Attorney General Herring's Predatory Lending Unit has also successfully brought enforcement actions against, among others, motor vehicle title loan lendersonline payday lendersmortgage servicing companies, and pawnbrokers.

The coalition of Attorneys General signing the letter hail from: California, Colorado District of Columbia, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia and Washington.

You can find a copy of the letter here.

GOVERNOR NORTHAM SIGNS ATTORNEY GENERAL HERRING’S BILL TO PROTECT VICTIMS OF HUMAN TRAFFICKING

~ Bill adds offenses related to human trafficking to the list of crimes for which bail can be denied, keeping traffickers in jail and protecting victims ~

NORFOLK (June 25, 2018) – In front of legislators, human trafficking victim advocates, and law enforcement officials, Governor Ralph Northam today signed human trafficking legislation championed by Attorney General Mark Herring. HB1260 (Mullin), recommended by the Hampton Roads Human Trafficking Task Force and carried by Delegate Mike Mullin, adds offenses related to human trafficking to the list of crimes for which bail can be denied, keeping traffickers in jail and better protecting trafficking victims.

“Human trafficking is a threat to public safety here in Virginia and across the United States,” said Governor Northam. “This legislation will help us prevent these crimes by making it more difficult for human traffickers to post bail and leave jail to intimidate witnesses or continue their criminal activity. I am proud to sign this legislation today and I thank Delegate Mullin and Attorney General Herring for their commitment to this issue.”

“Human trafficking is a dehumanizing crime that robs its victims of their dignity, their identity, and their freedom,” said Attorney General Mark Herring. “This legislation is critical to protecting victims of human trafficking by keeping traffickers in jail and taking their control away. I want to thank the Hampton Roads Human Trafficking Task Force for their tireless work fighting this atrocious crime, and Governor Northam, Delegate Mullin and Delegate Dawn Adams for standing with me against human trafficking.”

While prosecuting traffickers, local law enforcement found that traffickers would pay their own bail and bail out their victims continuing the cycle of abuse and trafficking. This legislation, recommended by the Hampton Roads Human Trafficking Task Force, will keep traffickers in jail and better protect their victims.

This legislation adds the following offenses that are attributable to human trafficking to the list of crimes for which there is a rebuttable presumption against admission to bail:

  • Taking or detaining a person for the purposes of prostitution or unlawful sexual intercourse,
  • Receiving money from procuring or placing a person in a house of prostitution or forced labor,
  • Receiving money from the earnings of a prostitute, and
  • Commercial sex trafficking, where the alleged victim is a family or household member.

“I am proud to see HB 1260 be signed into law today. This piece of legislation aims to disrupt the cycle of abuse in human trafficking here on the Peninsula and across the Commonwealth of Virginia,” said Delegate Mullin. “I want to thank the Hampton Roads Human Trafficking Taskforce for their tireless efforts, and Governor Northam, Attorney General Herring, and Delegate Dawn Adams for seeing it through the process of becoming law.”

“Protecting people that have been trafficked and abused is our mission, when legislation promotes survivor safety, it’s a shared win every time,” said Robin Gauthier, Executive Director, Samaritan House.

“In order to have successful human trafficking investigations, we must rescue and stabilize victims. The fact that now, in Virginia, bail can now be denied for offenses related to human trafficking serves as a significant tool in ensuring victims’ safety,” said Patrick J. Lechleitner, special agent in charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.

Human trafficking is a $150 billion dollar enterprise worldwide, and is widely considered one of the fastest growing criminal industries in the world. The United Nations' International Labor Organization estimates that there are 20.9 million victims of human trafficking globally, with hundreds of thousands of victims here in the United States.

Combating human trafficking in Virginia has been a top priority for Attorney General Herring. In November 2016, the Attorney General announced a $1.45 million grant that would help fund the Hampton Roads Human Trafficking Task Force, which then launched in January of 2017. The Office of the Attorney General partnered with U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HSI), Samaritan House, the U.S. Attorney's Office, Virginia State Police, and law enforcement agencies from Newport News, Hampton, Norfolk, Virginia Beach, Portsmouth and Chesapeake for the task force. HB1260 is a recommendation from the Hampton Roads Human Trafficking Task Force.

ATTORNEY GENERAL MARK HERRING AND HAMPTON ROADS HUMAN TRAFFICKING TASK FORCE LAUNCH NEW REGIONAL AWARENESS CAMPAIGN

~ Billboards going up on major highways across Hampton Roads to bring awareness to the realities of human trafficking and engage victims ~

    

NORFOLK (May 22, 2018) – Attorney General Mark Herring today announced that the Hampton Roads Human Trafficking Task Force will launch a new awareness campaign across the Hampton Roads region. Beginning this week, billboards will be placed on major highways across the region encouraging victims or those with information about possible human trafficking to contact the National Human Trafficking Resource Center’s hotline. The billboards are estimated to make 2.5 million impressions while they are up across the region. Additionally, the campaign will include bilingual digital advertising which will run in the region. In 2017, Virginia has had thefifteenth highest number of human trafficking cases referenced on the hotline, and experts believe human trafficking occurs in Virginia because of its location on the east coast, international air and sea ports, and large number of major interstates.
 
“Human trafficking robs its victims of their dignity, their identity, their freedom, and in a tragic number of cases, their childhood,” said Attorney General Herring. “Virginia has made great strides in combating this crime and my team and I have been proud to be a part of those efforts. By raising awareness about the existence and impact of human trafficking and promoting critical resources, we can help restore victims and seek justice against those who perpetrate this dehumanizing crime. I want to thank our Hampton Roads Human Trafficking partners for their continued efforts to combat this heinous crime.”
 
Human trafficking is a $150 billion dollar enterprise worldwide, and is widely considered one of the fastest growing criminal industries in the world. The United Nations' International Labor Organization estimates that there are 20.9 million victims of human trafficking globally, with hundreds of thousands of victims here in the United States.
 
Hampton Roads billboard locations include:
  • 3210 Bainbridge Boulevard, near the intersection of Rosemont Avenue, Chesapeake, VA
  • US 60, near the intersection of Elmhurst Street East, Newport News, VA
  • 3601 Chestnut Avenue, near the intersection of 36th Street, Newport News, VA
  • 2720 Hampton Boulevard, near the intersection of 35th Street, Norfolk, VA
  • 2019 Granby Street, near the intersection of 21st Street, Norfolk, VA
  • 3001 Lafayette Boulevard, near the intersection of Ballentine Boulevard,Norfolk, VA
  • 2561 Airline Boulevard, near the intersection of Victory Boulevard,Portsmouth, VA
  • 3307 George Washington Highway, Portsmouth, VA
“No one anticipated how prevalent the problem would be, we have opened three new shelters and served over 60 victims since the inception of the program 16 months ago,” said Robin Gautheir, Executive Director, Samaritan House.
“We know that awareness and outreach are two important tools in identifying victims of human trafficking, and we hope this billboard campaign will encourage the public to report suspicious activity to us,” said Dewey Mann, supervisory special agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Norfolk. “One of the task force’s first successful investigations began with a tip to the National Human Trafficking Hotline.”
 
In November 2016, Attorney General Herring announced a $1.45 million grant that would help fund the Hampton Roads Human Trafficking Task Force, which we then launched in January of 2017. The Office of the Attorney General partnered with Homeland Security, Samaritan House, the US Attorney’s Office, Virginia State Police, and law enforcement agencies from Newport News, Hampton, Norfolk, Virginia Beach, Portsmouth and Chesapeake for the task force. Since October 2016, just before the launch of the Hampton Roads Human Trafficking Task Force, there have been a total of 108 new trafficking investigations, 45 arrests, and 76 victims have been identified.

ATTORNEY GENERAL HERRING ALLEGES ILLEGAL PREDATORY LOANS IN SUIT AGAINST ONE OF VIRGINIA’S LARGEST ONLINE LENDERS

~ AG Herring’s suit against Net Credit, one of the largest online lenders operating in Virginia, seeks restitution on behalf of affected consumers ~

RICHMOND, VA (May 4, 2018) - Attorney General Mark R. Herring announced today that his Predatory Lending Unit has filed a lawsuit against Net Credit, one of the largest online lenders operating in Virginia, for lending and collections practices that allegedly violate the Virginia Consumer Protection Act. The lawsuit alleges that Chicago-based Net Credit issued loans of $1,000 to $10,000 to more than 47,000 Virginia borrowers between 2012 and 2018 with interest rates from 34% to 155%. In one loan cited in the complaint, a Virginia borrower was responsible for more than $6,000 in repayments for just $2,000 borrowed.

“We’ve seen more and more Virginians turn to online lenders in a time of need only to find they’ve signed up for a debt trap that is going to cost them hundreds if not thousands of dollars in finance charges and interest,” said Attorney General Herring. “I believe we need stronger laws to protect Virginians from predatory loans, whether issued online or in-person, but until we get those, I’m going to make sure the laws we have are enforced and make sure that companies can’t come into our state and abuse financially vulnerable Virginians.”

Attorney General Herring’s complaint alleges that Net Credit operated without a license in Virginia and misled borrowers about its licensure status in Utah in an attempt to avoid interest rate caps when loaning money to Virginians. Unless a lender qualifies for an exception, Virginia law caps the interest rate on loans at 12% per year. Instead, Net Credit forced borrowers to repay loans at exorbitant rates that cost Virginia consumers thousands of dollars.

The Complaint also alleges that Net Credit tried to illegally collect money from borrowers who had filed for bankruptcy and were entitled to protection from collections activities. This conduct allegedly occurred in the form of automatic withdrawals from consumers’ bank accounts and collections emails while court-ordered bankruptcy stays were in effect.

The lawsuit has been filed in Fairfax County Circuit Court. Attorney General Herring is seeking restitution on behalf of consumers who were charged illegal interest, civil penalties, attorneys' fees, and a court order banning Net Credit from further violating the Virginia Consumer Protection Act.

The Commonwealth is represented in this matter by attorneys in Attorney General Herring’s first of its kind Predatory Lending Unit, which has recovered more than $22 million from online lenders including CashCallMoneyKeyMr. Amazing LoansOpportunity Financial, and MoneyLion. Overall, Attorney General Herring’s Consumer Protection Section has recovered more than $243 million in relief for consumers and payments from violators.

Herring Joins 11 State Attorneys General in Opposing Offshore Drilling

By George Copeland, Jr., Capital News Service

RICHMOND -- Twelve attorneys general, including Virginia’s Mark Herring, called on the federal government Thursday to halt its plans for gas and oil drilling off their coasts.

In a letter to U.S. Secretary of the Interior Ryan Zinke, the attorneys general said the offshore drilling proposal “represents disregard for vital state interests, economies, and resources.”

Drilling off Virginia’s coast would pose a risk to the state’s marine environment, industries, revenue and military assets, Herring said.

"The Commonwealth of Virginia and our coastal communities have made it abundantly clear that we are not interested in putting our economy and citizens at risk as part of President Trump's giveaway to oil and gas companies," Herring said in his statement accompanying the letter.  “The federal government should not force this risk upon us.”

The letter follows Gov. Ralph Northam’s call last month that Zinke exempt Virginia from the drilling plans.  Like Herring, Northam, a fellow Democrat, cited ecological and financial costs.  Northam also noted that Zinke had exempted Florida at the request of that state’s Republican governor,  Rick Scott.

The language used by the attorneys general is more forceful, promising to challenge the proposal “using appropriate legal avenues.”

In addition to Herring, the letter was signed by attorneys general from North Carolina, California, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Rhode Island and Oregon.

The letter also follows comments made by Herring and five other attorneys general to the U.S. Bureau of Safety and Environmental Enforcement on Monday.  The group criticized the proposed revisions to the Interior Department’s regulation of safety systems for offshore gas and oil production.  

These regulations were put in place in 2016 after the 2010 explosion on the Deepwater Horizon drilling rig led to the deaths of 11 people and the spilling of 210 million gallons of oil into the Gulf of Mexico.

Virginia Swears In Lieutenant Governor, Attorney General

By George Copeland Jr., Capital News Service

RICHMOND – A new voice formally joined Virginia’s government Saturday afternoon as Justin Fairfax was sworn in as lieutenant governor, and a familiar figure, Mark Herring, took the oath of office to continue his role as attorney general.

The two, alongside newly instated Gov. Ralph Northam, headlined an inaugural ceremony attended by approving guests.

Rita Williams, who had worked with Fairfax’s campaign when he lost the Democratic nomination for attorney general to Herring in 2013, said she was proud of his accomplishments.

“He is a very, very intelligent young man, a gifted young man, and he will make an excellent lieutenant governor,” she said.

Fairfax is the second African-American elected to a Virginia state position, following Douglas Wilder as governor in 1989. He was sworn in by former U.S. District Judge Gerald Bruce Lee. Before retiring, Lee oversaw a number of high profile cases, including the convictions of Brian Patrick Regan for espionage and Ahmed Omar Abu Ali for conspiracy to assassinate then-President George W. Bush.

Thomas Horne, a former judge and commonwealth’s attorney from Loudoun County, returned to administer the oath of office for Herring as he had done four years ago. Herring spent his previous career as a lawyer in Horne’s Loudoun County courtroom.

Mia Masten, director of advocacy and professional relations for Pfizer in Washington, D.C., attended the event. She said she was unfamiliar with the two politicians but was enthusiastic about Virginia’s future with “the new influx of new energy, new blood, new excitement.”

Charles Cockrell, communication and business director at NASA’s Langley Research Center in Hampton, was also optimistic.

“I think we have great leadership in Virginia,” he said.“We see a lot of progress in technology and what we’ve done to foster economic growth in the Commonwealth. We look forward to seeing that continue in the next administration.”

Attorney general praises injunction blocking travel ban

By Amelia Heymann, Capital News Service

RICHMOND – Attorney General Mark Herring praised a federal judge for issuing a preliminary injunction against the Trump administration’s temporary ban prohibiting people from seven mostly Muslim countries from entering the United States.

Herring said the ruling suggests that he will win his lawsuit alleging that the ban violates the Constitution’s guarantee of freedom of religion.

The injunction issued Monday by U.S. District Judge Leonie M. Brinkema of Alexandria will last until the case goes to trial. Herring said people affected by the ban “can have a lot more confidence knowing that the commonwealth will likely win at trial.”

In granting the motion for a preliminary injunction, Brinkema cited Herring’s argument that President Trump’s executive order violated the Establishment Clause of the First Amendment to the U.S. Constitution, which guarantees freedom of religion.

“The Commonwealth has produced unrebutted evidence supporting its position that it is likely to succeed on an Establishment Clause claim,” Brinkema wrote. “The ‘Muslim ban’ was a centerpiece of the president’s campaign for months, and the press release calling for it was still available on his website as of the day this Memorandum Opinion is being entered.”

Trump said he issued his executive order to ensure national security. He said he was putting a temporary halt on admitting visitors from seven countries that the Obama and Bush administrations had identified as terrorist threats.

“It is the policy of the United States to protect its citizens from foreign nationals who intend to commit terrorist attacks in the United States; and to prevent the admission of foreign nationals who intend to exploit United States immigration laws for malevolent purposes,” the executive order said. It put a 90-day ban on people coming to the U.S. from Iran, Iraq, Syria, Sudan, Libya, Yemen and Somalia.

In a telephone conference call with reporters Monday night, Herring said the Trump administration had “no evidence to support the bald claim that it was about national security.”

Herring said the Virginia case differed from other cases challenging the executive order. The states of Washington and Minnesota also sued over the issue and received a temporary injunction to block the executive order. A three-judge federal appeals court panel last week refused to toss out the injunction and reinstate the travel ban.

“While Washington and Minnesota alleged other violations including the Establishment Clause, the court was really focusing on due process – where in Virginia, the judge really went to the heart of the Establishment Clause case,” Herring said.

Herring, a Democrat, called Trump’s travel ban “unlawful, unconstitutional and un-American.”

“The overwhelming evidence shows that this ban was conceived in religious bigotry and is actually making Americans and our armed forces less safe at home and abroad,” Herring said.

On Twitter, Trump criticized the injunction, saying, “The threat from radical Islamic terrorism is very real, just look at what is happening in Europe and the Middle-East. Courts must act fast!”

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