Friday, September 22, 2017 Elyria 86°


Area AMVETS posts settle with the state


ELYRIA — AMVETS posts in Elyria, Lorain and Vermilion have entered into settlement agreements with Ohio Attorney General Mike DeWine’s office as part of a statewide investigation into the misuse of charitable gaming profits by the veterans group.

DeWine’s investigation concluded that 59 AMVETS posts across the state and other organizations connected to AMVETS Department of Ohio improperly spent millions of dollars, money that was supposed to go toward helping veterans find jobs.

Court documents filed this week indicate that the Elyria post alone misspent approximately $885,000.

Under state law, 25 percent of the net profit from charitable gambling, such as instant bingo games, is supposed to be donated to a charity, which in the AMVETS case was supposed to be their career centers. The posts are allowed to keep the remaining 75 percent of funds they raise through gambling to use for post expenses.

The charitable cut of gambling money was sent to AMVETS Career Center Inc., which was supposed to oversee the satellite career centers at the various posts. Court documents showed that the nonprofit kept about 15 percent of the money sent in to cover administrative costs and forwarded the remaining money back to the posts to pay the cost of operating the career centers.

“Investigators discovered that most satellite career centers were facades, designed to give only an appearance of a career center,” the settlement agreement with the state AMVETS organizations stated.

Most posts instead improperly used the money that was supposed to fund their career centers to cover operating and other post expenses, the investigation concluded.

Dan Tierney, a DeWine spokesman, said the investigation has been referred to Franklin County Prosecutor Ron O’Brien for consideration of criminal charges. O’Brien’s office did not return a call seeking comment Thursday.

AMVETS posts in Sheffield Lake and Wellington weren’t subjected to settlement agreements because there was no evidence they were involved in the kind of behavior that led to problems at other posts, Tierney said.


AMVETS Post 32, which sits just outside of Elyria in Carlisle Township, had a legitimate career center and routinely received an “A” rating for its program, according to court documents.

The post had a separate building with a paid director — Terry Stone, who has since left that role to serve as executive director of Lorain County Veterans Service Commission. DeWine’s investigation found that 274 veterans completed online courses through the Elyria center over the years.

But the investigation concluded that while the Elyria career center was providing services to vets, such as online and machinery-related courses, the post wasn’t using all of the money it was receiving properly.

Between 2006 and mid 2011, the Elyria post received $987,318 in charitable proceeds from AMVETS Career Center Inc., according to the documents.

“However, (the post) utilized approximately $885,000 of those charitable proceeds (roughly 90 percent) for non-career center purposes including to pay ‘rent’ to the Post, to pay payroll for bar employees, to fund repairs and expansion of the Post’s parking lot and to pay for instant bingo tickets for the canteen,” the statewide settlement agreement said.

Rick Piscione, the post’s commander, said he was told to refer all calls to the national AMVETS organization and declined to comment.

Lorain County sheriff’s Chief Deputy Dennis Cavanaugh said his office is conducting a separate investigation into the Elyria post’s finances.

Stone, whose resignation from the AMVETS Career Center Board of Trustees was a condition of the statewide agreement, said while he was running the Elyria career center it helped many veterans looking for work.

He also said he had no control over the finances. He said some members raised questions about how the post’s finances were being managed, but nothing was ever done because that was how the statewide AMVETS executive director, George Ondick, had set up the system.

Ondick and AMVETS officials across the state were forced out as part of the investigation and settlement.

“There were no checks and balances,” Stone said.

Stone also said that he cooperated with investigators when they showed up at the career center, which he said the post is trying to keep alive with a volunteer staff.

His description to investigators of how the AMVETS career center system operated, which he equated to “money laundering,” was included in the court documents.

“So we’ve got a career center opening up somewhere in our area that there was no way they were planning on doing the right thing,” the report quoted Stone as having said. “They just wanted a career center so that they could get some of that money sent back to them.”

Robert Mackin, a member of the Lorain post and president of the Veterans Service Commission, said he still has full faith in Stone’s ability to lead Veterans Services, which was rocked by the firing of its former director, Don Bates, last year.


Post 47 of the AMVETS in Lorain was used in the court documents as an example of a post that was routinely given an “F” grade for failing to live up to the organization’s career center standards.

The post’s “career center consisted of two locked cabinets and a table in the corner of a large meeting hall,” the statewide agreement said. “A post official reported that the post’s satellite career center had not been used by a veteran in two years.”

During the six-year period review by investigators, the Lorain post received $171,009 to fund its career center, but veterans who did sign up for online courses took the classes elsewhere, the agreement said.

Since 2009, the investigation found, only 21 veterans completed online classes through the Lorain career center.

The Lorain post set up a bank account that was purportedly for the career center, but the investigation determined that account “appeared to act as a payroll account for the post. Individuals receiving payments from the account were not listed as ‘career center’ coaches and did not appear to have an official relationship with the career center.”

And when DeWine’s office asked the post for career center and financial records, the post’s leadership didn’t turn over the requested documents.

Post Commander Mike Kachure did not return calls seeking comment Thursday.

Mackin said that many veterans seeking services in Lorain were referred to the Elyria career center because it was better equipped to serve them.

“It’s just a sad day for AMVETS,” Mackin said of the investigation’s findings.


DeWine’s office didn’t release details of what exactly was found during its review of AMVETS Post 22 in Vermilion, which received $318,757 for its career center over the course of the six years reviewed by DeWine’s office.

The post was given a “C” grade for its career center between October 2011 and September 2012.

A photo of the Vermilion career center, provided by DeWine’s office, shows two desks with computers, a printer and chairs in the corner of a room.

The post’s commander, Art Shull, signed an agreement that mirrors those imposed on posts across the state with troubled career center programs.

Those agreements call for the posts to follow the law regarding how charity bingo money is handled and to return all career center assets in their possession to the AMVETS Career Center Inc., which is now being run by a new independent board.

The settlement stated that the misspent money won’t be repaid because doing so would financially ruin the AMVETS organization and not help the veterans they are supposed to serve.

Shull said he was told to refer media calls to the national AMVETS organization. He hung up the phone when asked to discuss what issues the state found at the Vermilion career center and how those problems were addressed.

Jay Agg, spokesman for the national AMVETS organization, said he couldn’t comment on what had happened at specific posts.

“We’re pleased with the response that AMVETS Department of Ohio has taken in the wake of this investigation,” Agg said. “They’ve been very proactive.”

He said to his knowledge no one connected with AMVETS appears to have taken money for their personal use but rather spent charity money on improper expenses.

The investigation found that Sam Pierce, an assistant director at AMVETS Department of Ohio, used an AMVETS credit card to buy $2,800 worth of items for his home remodeling business.


In his news release, DeWine said the need for services to help veterans find jobs in Ohio was vitally important because of the higher unemployment rate among veterans compared to the general population.

A national report stated while Ohio’s unemployment rate was 7.9 percent statewide at the end of 2011, among veterans the figure was 10.7 percent. The figure shot up to 19.4 percent unemployment for veterans who had served after the Sept. 11, 2001, terrorist attacks.

Statewide, AMVETS posts with career centers took in just under $50.3 million between 2006 and 2012 and were legally entitled to keep around $37.7 million for their own purposes. Around $12.6 million was sent to the AMVETS Career Center Inc. and just under $10.7 million was retuned to the posts across the state to run their career centers.

But rather than using the money for its intended purpose, the posts followed Ondick’s belief that “you use the money for whatever you want to do,” one AMVETS official told investigators.

There were also problems with how AMVETS Career Center Inc. handled the nearly $1.9 million it held back to cover administrative costs. The investigation determined that almost $1.1 million of that money was transferred to AMVETS Department of Ohio, where it was used to keep the financially troubled statewide organization afloat.

Additionally, there were problems with how roughly $3.4 million raised by the AMVETS Service Foundation was spent.

The investigation found that only $302,666 of that money was actually spent on the scholarships and grants it was supposed by be used for. The remaining $3.1 million was funneled to AMVETS Department of Ohio to cover payroll and administrative costs.

Sandy Vorhies, commander of the AMVETS Department of Ohio, said in a statement that the veterans group has already begun making changes to fix the problems exposed by the investigation.

“We are angry that veterans did not receive needed services,” Vorhies said. “We have worked with the Attorney General to resolve these issues, and we have terminated several individuals who have contributed to theses problems.”

Contact Brad Dicken at 329-7147 or

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