Family of ex-head of California veterans charity joins insurance company to settle lawsuit

A California veteran's charity that supplies arts and crafts to hospitalized servicemen and women agreed Friday to pay $2.45 million and purge its leadership to settle a lawsuit filed by the state alleging misuse of funds.

State Attorney General Kamala Harris filed the suit in Riverside County last year after Legislative hearings suggested leaders of the Temecula-based Help Hospitalized Veterans were paying executives too much and spending donated finds on golf membership, a condominium and other items, with little or no benefit to the charity's one function of assisting hospitalized veterans.

Harris said the estate of former group President Roger Chapin will pay back the charity $2 million in excessive salary he collected over several years. Chapin died in August.

In addition, a company that insured officers and directors also agreed to pay the charity $450,000.

Furthermore, Harris said the current president, Michael Lynch, and four board members will step down and all have agreed to be banned from ever serving a charity again in an executive capacity.

Lynch and the charity's lawyers didn't return phone calls Friday.

"Veterans face many challenges when they return home — it's unconscionable that Help Hospitalized Veterans officials misused charitable money intended for those who served and have sacrificed for our country," Harris said.

The charity was launched in 1971 to serve hospitalized Vietnam War veterans.