New Development in Fraud Scandal Around HSUS Money Man

We wrote a few months ago about Arthur Benjamin, a man who has helped raise millions of dollars for the Humane Society of the United States and who sits on HSUS’s National Council. ATI, a for-profit training center that Benjamin founded and ran for a number of years, was sued by the U.S. Justice Department for violating the federal False Claims Act, a law concerning fraud in federal government contracts.

ATI is now a former business after agreeing to a settlement with the government to close its doors and pay $3.7 million. ATI doesn’t admit any wrongdoing, but let’s skip the legalese—the allegations leveled against ATI in the lawsuit seem pretty damning to us.

The scheme is complicated, but here’s how we understand the nuts and bolts: ATI allegedly recruited students from homeless shelters and strip clubs, doctored transcripts, and fudged grades, all with the goal of being able to apply for federal grants—receiving a whopping $236 million. The more students, the more grant money. But since the idea was simply to maximize federal aid money, the students themselves were allegedly left to the wayside.

David Halperin reports at The Huffington Post (emphasis added):

According to the [federal] complaint, top ATI officials “were aware of and / or encouraged the fraud.”

ATI’s current interim CEO, Michael Gries, told a reporter that all of the alleged misconduct at ATI happened under the leadership of Arthur Benjamin.

Benjamin was CEO from 2005 to 2011 and also was chairman of ATI’s board. And remember, $3.7 million is a settlement. Had ATI gone to court and lost, the sanctions likely would have been considerably higher.

Benjamin describes himself as a “philanthropist” with “a heart bigger than his body,” yet it appears that Benjamin has made a pretty penny over the years from a business that (allegedly) ripped off students and taxpayers. Benjamin the Braggart even says in his bio that his “educational activities impact career education nationwide.” No kidding.

Is it fair to say that Benjamin’s money is dirty, and if so, how much dirty money has HSUS taken from him over the years? At two lavish NYC galas, Benjamin reported helping raise more than $2,500,000 for HSUS. HSUS has received $235,000 in contributions from Benjamin’s foundation and a separate nonprofit group.

That certainly has meant HSUS CEO Wayne Pacelle has had reason to lavish praise on Benjamin. “Arthur Benjamin is the sort of person who emerges on the scene, and has an electric effect on an organization and its donors,” says Pacelle. (That’s Pacelle at right, pictured with Benjamin.)

Maybe it’s no surprise that Pacelle likes Benjamin’s mojo. Benjamin’s organization was sued by the feds for allegedly ripping off taxpayers. Pacelle’s organization is being sued in federal court for allegedly engaging in a witness-payment and racketeering scheme. Pacelle himself personally signed at least one check implicated in this system. (The ASPCA settled this lawsuit in December for nearly $10 million but admitted no wrongdoing.)

And it appears Benjamin hung in plenty of elite circles, not only running the ritzy charity event circuit with HSUS and other organizations, but also getting his picture taken with former Presidents. Wayne Pacelle, meanwhile, seems to enjoy hobnobbing with the Hamptons and Hollywood crowds.

All things considered, Pacelle and Benjamin are kind of a fitting duo, aren’t they?

Benjamin reportedly contributed to a number of political campaigns; really, we’d be surprised if this scandal doesn’t grow bigger. Stay tuned.

Posted on 09/05/2013 at 11:53 am by Humane Watch Team.

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  • Bonnie Thompson Jensen

    They are all a bunch of crooks, they need to investigate all of this further! H$U$ is nothing but a money making, Company, they make money off people who see their tear jerking adds on TV! Kind hearted give their money to them, they don’t realize that, only about 1% of it actually goes toward helping animals!!!!!!!!!!!!

  • Lorry Montano

    My heart aches when I see those poor animals in the HSUS commercials but I switch stations now. I can’t stand the “propaganda” HSUS foists on the public. I’ve said it before and I’ll say it till I die. Give your donations to your local no kill shelters. If you don’t have money to give but can give time; do it. Even donating newspapers and old towel and linens will help. Just don’t fall for the HSUS scam.

    • Iheartzooanimals

      that’s really hogwash about only giving to no-kill shelters. Anyone who thinks no-kill shelters never have to euthanize is living in lala land. And where do you think they take those animals. Let’s be realistic now, and not fall for all the AR rhetoric. People should support their worthy local shelter. Whether or not it euthanizes is irrelevant. No kill very often is not what it’s cracked up to be. And Nathan Winograd is just another vegan ARist with a gimmick.

      • Lorry Montano

        I don’t believe it’s hogwash and I checked my address. It’s not lala land. I realize that no kill shelters can’t take all animals and have to turn some away. There are no kill shelters (including the one I volunteer for) that will turn away animals there is no room for and sometimes they have to be euthanized as a last resort for medical or severe behavioral problems. No kill shelters sometimes have animals for years at their shelters or in foster homes. I don’t care about Nathan Winograd or his gimmicks. I care about the animals and will continue to give my donations and support to NO KILL SHELTERS.

  • WORSEKarma

    It’s amazing how fast the H$U$ and its various satellites and hangers-on are racking up legal problems, now that they no longer have the IRS’s Lois Lerner to run interference for them…

  • Kathy R.

    So, why is HSUS still in business? Does the corruption go deeper and farther and more into the government than we first thought? Inquiring minds want to know, no, sorry, DEMAND TO KNOW!!!

  • DC

    Did the people recruited to get loans and be students ever get to take any classes? I understand that the school falsified employment success for their students so how are these people going to repay the loans that ATI kept as income? No wonder they are willing to pay $3 milion to get away with over $200 million.

  • MisterCadet

    HSUS should be publicly shamed into returning all the money they chose to accept from this known dirt bag. That $235,000 should be used to create a new charity benefiting the thousands of people victimized by Mr. Benjamin’s cruel education mills. Ellen DeGeneres could host a fundraiser to raise awareness and provide restitution to former ATI students up to their eyeballs in debt. It could called “To the Rescue” and held in New York this Fall.

    HSUS should be ordered to sever all ties (and Wayne, all bonds) with this inhumane miscreant. An independent overseer could conduct background checks on all of the remaining National Council Members.

    Wayne Pacelle might want to consider trying out for the next season of “Dancing With The Stars.” He still looks dapper in a fancy suit, and no one in the animal welfare field takes him seriously anymore, anyway.

    • vicky

      MisterCadet……………………. Ellen DeGeneres supports HSUS. She promotes Halo dog Food and that is connected with HSUS and probably PETA. please learn more about your celebraties before promoting them. I use to watch her until I learned this……………….

      • MisterCadet

        Hi Vicky,
        I was being sarcastic. I can’t stand Ellen DeGeneres. She has known about HSUS’s corruption for many years, and chooses to support them anyway. She even gets her audience to donate to HSUS. Ellen is a world class hypocrite and her golden image, well crafted by PR teams, is bogus. Read “Ellen DeGeneres Disappears Another Dog” – her animal loving image isn’t all it’s cracked up to be either.

        HSUS holds a fundraising gala in NYC every fall called “To The Rescue.” Ellen attended last year’s lovefest. HSUS honored Ellen at their Genesis Awards in Hollywood earlier this year.

        HSUS’s Animal Rescue Team is as bogus as Arthur Benjamin’s American Dog Rescue Foundation. In my comment, I was trying to turn it all around on them, proposing that instead of celebrating themselves and using the work of real animal rescuers as a cash cow, they all convene to raise money for their victims.

        We’re on the same side, believe me. Take care.

    • fearnot

      who could partner with Wayne?/ only one person I can think of.. Wayne himself.. no one else would be good enough for him

  • ellowe13

    Yet another reason to support LOCAL rescues and No Kill shelters…not the behemoths lining their retirement coffers.

  • fearnot

    “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”