New York Sued Charity for Misusing Funds
The state attorney general filed a lawsuit against Healing for Heroes for allegedly diverting donor money for personal gain.
Updated on Oct. 13, 2026 in Philanthropy
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New York officials filed a civil lawsuit against the charity Healing for Heroes for allegedly misleading donors and misusing funds for personal expenses. The state is now seeking to permanently shut down the organization and ban its founders from running nonprofits.
Why it matters
This case highlights the risks of charities lacking oversight, as the organization allegedly enriched its founders while failing to support veterans. The litigation aims to protect charitable assets and ensure accountability for nonprofit leaders in the state.
Healing for Heroes raised nearly $100,000 in donations since 2024 and generated $33,312.16 in rental income from its 30-acre property. The organization operated from a facility in Bemus Point and held four retreats for insiders.
The players
Healing for Heroes
This is a charity organization that allegedly misled donors and misused funds for personal expenses.
Thomas Nelsen
He is a board member of the charity who allegedly diverted rental income from the organization's property to his personal accounts.
Jennifer Milchanoski-Nelsen
She is a board member of the charity who allegedly kept rental income derived from the organization's property for personal use.
The details
The charity allegedly accepted donations via Venmo into personal bank accounts and used funds for personal property upgrades, such as a wooden deck and a bathroom renovation. Founders Thomas Nelsen and Jennifer Milchanoski-Nelsen also reportedly rented out their 30-acre property in Chautauqua County through Airbnb 32 times, keeping the proceeds for themselves.
Timeline
The organization began raising money in 2024.
Four internal retreats were held between 2024 and 2025.
Leaders rented out the property 32 times between 2024 and 2025.
The Attorney General filed the civil lawsuit in October 2026.
Market Landscape
The lawsuit marks an enforcement action under New York State charities law to penalize violations and recover misappropriated funds. This legal move reflects a growing regulatory focus on transparency and accountability within the nonprofit sector.
Residents should exercise caution when donating to small, lesser-known charities that lack transparent financial reporting or clear conflict-of-interest policies. Always verify a nonprofit's standing with state regulators to ensure that your financial contributions are actually reaching the intended beneficiaries.
The takeaway
Donors should perform due diligence by checking the registration status of any charity before sending money via informal payment apps. Genuine charitable organizations are legally required to maintain transparent records and separate organizational funds from personal assets.
Further reading
For more on regulatory oversight, explore additional reports in our Philanthropy section.
Source note: This article includes information reported by The Times of India.
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