Haueter family spent most of $1.5M in donations for personal benefit, vacations

Attorney General Bob Ferguson announced a lawsuit against a Leavenworth man and his family for pocketing most of $1.5 million in donations that thousands of Washingtonians thought was going to disadvantaged children. Roy Bronsin Haueter’s family instead used most of the donations to pay themselves and go on family vacations.

The Attorney General’s investigators have not found any evidence that the charities provided any direct benefit to children since at least 2012. The charities instead only have provided a small number of gift cards to a few nonprofit entities.

The lawsuit, filed in King County Superior Court, alleges that Roy Bronsin Haueter, his wife, and his children and their spouses operated four charities and a commercial fundraiser that continually violated the state Charitable Solicitations Act and Consumer Protection Act. The Attorney General’s Office asks the court to halt all deceptive activities by the organizations. The lawsuit seeks civil penalties of up to $2,000 per violation of the Consumer Protection Act.

Ferguson also asks the court to require the Haueter family to give the charities’ ill-gotten donations to legitimate charities who provide services to the children that the Haueters’ organizations claimed to help.

“The Haueter family used their so-called charities to take advantage of thousands of Washingtonians wanting to make a difference in a child’s life,” said Ferguson. “They abused their charity status for their personal gain. That’s wrong, and we will hold them accountable.”

The Haueters registered each charity with the Washington state Secretary of State’s Office as required by law. The family self-reported the financial documents, which sometimes claimed the organizations spent up to 99 percent of donations on programs to benefit children. The Attorney General’s investigation, which included review of bank and other financial records, revealed that most of the donations instead went to the Haueter family.

Since 2012, Haueter has performed all the day-to-day operations of the charities, including controlling the bank accounts, receiving and processing donations and drafting and editing solicitations. His family members served formal roles, such as treasurer or secretary.

The Haueter family represents the Children’s Safety Bureau, Search and Rescue Charities, Emergency Relief Services and Children’s Hunger Relief Aid as charitable organizations that solicited consumers throughout Washington state. The four so-called charities operated under several names. For example, the organization Emergency Relief Services often solicited as “Back to School Helping Hands,” and Children’s Hunger Relief Aid was formerly the Children’s Hospital Emergency Fund. All four organizations deceived consumers as to how they would use donations, in violation of the Charitable Solicitations Act and the Consumer Protection Act.

For example, the website for Back to School Helping Hands claims: “A donation of $100 provides one child with new clothes, shoes, and a backpack filled with school supplies and personal hygiene items.” This was a misrepresentation. Investigators in the Attorney General’s Office found no evidence that the organization directly provided any supplies to children since at least 2012.

The Children’s Hospital Emergency Fund also implied that it was affiliated with several hospitals, including Seattle Children’s Hospital and Sacred Heart Children’s Hospital. No such relationship existed. Investigators in the Attorney General’s Office found no evidence that the charity provided any money or support to any children’s hospital in Washington, another misrepresentation by the Haueters’ charities.

The Haueters’ for-profit business, Haueter Enterprises, operated as a commercial fundraiser for the four charities, though it never registered itself as such with the Washington state Secretary of State’s Office. The Charitable Solicitations Act requires commercial fundraisers to register with the state.

Assistant Attorney General Bob Hyde is lead attorney in this case.

More information about how individuals can protect themselves from charity scams can be found here – http://www.atg.wa.gov/charities.

– Washington State Attorney General