NY Attorney General Filed Suit Against Charity Founder
The state seeks to dissolve Healing for Heroes over allegations of donor fraud and misuse of funds.
Updated on Oct. 13, 2026 in Philanthropy
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The New York Attorney General has filed a civil lawsuit to shut down Healing for Heroes, alleging its founders misled donors and diverted funds for personal use. The organization, which targeted donors to support veterans, operated out of a Bemus Point property.
Why it matters
The suit highlights critical risks for donors and operators regarding the lack of financial controls and oversight in small non-profits. The state alleges the charity prioritized self-enrichment over its charitable mission by commingling funds.
Healing for Heroes raised nearly $100,000 in donations since 2024, while founders diverted $33,312.16 in rental income from their 30-acre property. The state is pursuing penalties of $1,000 per charities law violation and $5,000 per FAIR Business Act violation.
The players
Thomas Nelsen
Founder and board member of Healing for Heroes.
Jennifer Milchanoski-Nelsen
Founder and board member of Healing for Heroes.
Healing for Heroes
A non-profit organization that claimed to serve veterans.
New York Attorney General
The top law enforcement official responsible for regulating non-profits in the state.
The details
The lawsuit alleges that founders Thomas Nelsen and Jennifer Milchanoski-Nelsen listed the organization's Bemus Point property on Airbnb 32 times, routing income into personal accounts. Donors were further misled as funds were allegedly used for home upgrades, including a deck and bathroom. The charity failed to maintain independent oversight or conflict-of-interest policies, even accepting Venmo payments directly into personal accounts.
Timeline
2024: The organization began raising funds.
2024-2025: Founders rented out the property 32 times.
2024-2025: The charity held four retreats for insiders only.
October 2026: The Attorney General filed the civil lawsuit.
Market Landscape
This litigation follows established state precedents regarding the enforcement of New York's charities law. It highlights the regulatory risks for organizations that fail to maintain necessary conflict-of-interest protocols.
Business operators managing or supporting non-profits must maintain strict separation between organizational funds and personal assets. Failure to implement independent board oversight or clear conflict-of-interest policies can trigger state enforcement and permanent dissolution.
The takeaway
The case serves as a warning on the necessity of formal financial segregation when operating as a tax-exempt entity. Owners should ensure their internal board policies are actively enforced to prevent accusations of illegal self-dealing.
Further reading
Learn more about organizational governance and best practices for non-profit entities in New York Philanthropy.
Source note: This article includes information reported by The Times of India.
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