Wounded Vet Charity Accuses Own Executive of Fraud

Foundation's executive director fired for allegedly misusing donation money.

ByABC News
August 20, 2008, 6:42 PM

August 21, 2008— -- The executive director of a charity for wounded veterans that pulls in more than ten million dollars per year in donations has allegedly spent tens of thousands of dollars of the charity's funds inappropriately to benefit foundation executives and given out hundreds of thousands of dollars of donated funds in exchange for family favors, according to current and former executive board members of the Military Order of the Purple Heart (MOPH).

Richard (Dick) Esau was fired from the MOPH Service Foundation after it brought in a forensic auditor to investigate Esau and the charity's finances, according to Henry Cook, outgoing national commander of the MOPH, and Ray Funderburk, former national public relations director for the MOPH.

"This investigation is ongoing and it's going to get bigger," said Cook. "It is outrageous and unfair to those who donate their hard earned money to help veterans."

The findings of the audit by a forensic independent accounting firm thus far warranted Esau's termination, according to Foundation President James Blaylock. The Foundation's Executive Committee "authorized a continued auditing process into any and all areas that the forensic auditor felt were appropriate," Blaylock wrote in the letter to MOPH members alerting them that Esau was fired.

Cook said that there appeared to be a conflict of interest with regards to several hundred thousand dollars that the Foundation allocated under Esau.

The Foundation gave $500,000 to the Intrepid Museum in New York right before the daughter of a member of the Foundation's board of directors was hired by the museum, according to Cook.

It gave another $100,000 to the Marine Corps Reserve Officers Association where Esau worked prior to joining the Foundation and where his wife worked at the time the money was given, according to Cook, who says Esau told him that $50,000 of that money went to a personal friend who was contracted to teach anti-terrorism classes to deploying National Guard troops.

And last year the Foundation's tax forms show it paid the Washington Redskins $685,000 in signage for radio and television advertisements, which Cook said was completely inappropriate and should have gone to needy veterans.