New York Veterans Charity Fights AG Fraud Charges

The [New York Attorney General’s Office](https://ag has accused Healing for Heroes and its founders of misusing charitable donations and Airbnb rental proceeds from a privately owned veterans retreat in Bemus Point.

The defendants are challenging the allegations in New York State Supreme Court.

The civil enforcement action, announced by Attorney General Letitia James on August 12, 2026, targets Healing for Heroes, a nonprofit established to provide free outdoor retreats for disabled veterans, and its founders, Thomas Nelsen and Jennifer Milchanoski-Nelsen.

The state alleges that the organization collected $93,091.88 in donations while directing substantial funds toward private property improvements and personal expenses. Investigators separately accuse the founders of retaining $33,312.16 from Airbnb rentals advertised as benefiting the charity.

State Lawsuit Names Charity Founders

The attorney general’s [verified petition](https://ag, submitted to Erie County Supreme Court, identifies Thomas L. Nelsen, Jennifer S. Milchanoski Nelsen, and Healing for Heroes as respondents.

Nelsen serves as the organization’s board president. His wife is the board secretary and treasurer. Both are accused of using the organization’s charitable operations to benefit themselves and other board members.

The state alleges violations involving fraudulent charitable solicitation, deceptive business practices, false advertising, inadequate financial records and improper administration of nonprofit assets.

The allegations remain contested. No judicial determination of fraud is established in the cited reporting.

Donations and Property Spending Disputed

Healing for Heroes was incorporated on March 20, 2024, to offer disabled veterans free accommodations, outdoor activities and opportunities to connect with fellow service members.

The nonprofit operated from a 30-acre wooded property along Slide Joslyn Road in Bemus Point, Chautauqua County. The property is jointly owned by the Nelsens rather than the charitable organization.

Healing for Heroes received at least $93,091.88 in monetary donations between March 20, 2024, and September 19, 2025.

The state’s petition alleges that more than half of the monetary donations were spent on the founders’ property and board members’ personal expenses rather than the advertised retreats.

Investigators identified expenditures involving bathroom renovations, construction of a deck, utilities, property maintenance, vehicle repairs, gasoline, shopping and meals.

The state also alleges inadequate documentation of donated labor, construction materials and vehicles, including multiple all-terrain vehicles and an SUV.

Airbnb Revenue Adds Financial Dispute

The attorney general alleges that the founders rented their privately owned retreat property through Airbnb on at least 32 occasions during 2024 and 2025.

The advertisements promised that 100% of rental proceeds would support the veterans charity. Instead, the founders allegedly deposited $33,312.16 in rental proceeds into personal accounts.

The state treats the rental proceeds separately from charitable contributions. Neither amount represents a judicial finding of financial misconduct.

The total amount allegedly misused has not been established as a single definitive figure. The petition identifies spending exceeding half of the $93,091.88 in donations, alongside the separately disputed Airbnb proceeds.

The allegations concern two distinct forms of possible private benefit: charitable donations allegedly financing personal property improvements and commercial rental income allegedly retained despite promises that it would support veterans.

Retreat Activities Under State Scrutiny

The attorney general’s investigation found that Healing for Heroes conducted only four overnight retreats during 2024 and 2025.

Those retreats were attended exclusively by board members, relatives and friends rather than the broader population of disabled veterans the organization claimed to serve.

Investigators also described an incident in which veterans without close personal connections to the founders were turned away before they could apply.

The founders later described overnight retreats as unaffordable and shifted toward shorter gatherings, including events advertised as “Free Pizza & Fire Night” and “Coffee and Donuts.”

The state contends that these activities differed substantially from the therapeutic retreat experiences promised in fundraising materials.

Registration and Governance Allegations

Investigators allege that Healing for Heroes began soliciting charitable contributions in 2024 before registering with New York’s Charities Bureau.

The organization completed its registration on May 1, 2025, more than a year after incorporation.

The attorney general also alleges that the nonprofit operated without an effective board structure or required conflict-of-interest safeguards.

Some cash and Venmo donations were inadequately documented and deposited into personal accounts rather than properly maintained charitable accounts.

These governance allegations form part of the state’s argument that the organization failed to protect assets contributed for disabled veterans.

Defense Challenges Attorney General Evidence

The founders have formally opposed the state’s enforcement petition through legal filings submitted to New York State Supreme Court.

Their attorney, Ryan K. Cummings of Hodgson Russ LLP, challenges the evidentiary foundation of the allegations and argues that the petition lacks sufficient firsthand admissible testimony.

The defense contends that the state’s case relies substantially on secondary assertions and attorney affidavits rather than properly established evidence supporting the requested judicial relief.

The defense argues that the petition relies on secondary attorney affidavits instead of firsthand admissible testimony. The court must resolve the evidentiary objections and determine the appropriate procedural course.

Those arguments challenge the legal sufficiency of the state’s presentation. They do not establish that the disputed expenditures or fundraising practices complied with charitable regulations.

State Seeks Dissolution and Penalties

Attorney General Letitia James is asking the court to dissolve Healing for Heroes and distribute its charitable assets to organizations providing therapeutic retreats for disabled veterans.

The state also seeks permanent restrictions preventing the Nelsens from soliciting charitable contributions or holding leadership positions at other New York-based charities.

Additional remedies include recovery of damages and civil penalties of up to $1,000 per violation of New York’s charitable solicitation law and $5,000 per violation of the FAIR Business Practices Act.

James said: “Our veterans have sacrificed so much for this country, and they deserve real supportive services when they return to civilian life.”

The proceeding is before Erie County Supreme Court, where the contested allegations and defense objections must be considered before the court determines whether dissolution, financial remedies or restrictions on future charitable activities are warranted.