Archive for Thursday, September 1, 2011

Tonganoxie-based nonprofit being sued for trademark infringement

September 1, 2011

A Tonganoxie-based nonprofit, the Purple Heart Veterans Foundation, has been sued in federal court by the Military Order of the Purple Heart — founded in 1932 — for trademark infringement, according to documents obtained by the Journal-World.

The lawsuit, which was filed Friday in U.S. District Court, is the latest of potential issues with the charity highlighted in recent weeks by a Journal-World investigation.

The lawsuit’s main allegations against the Purple Heart Veterans Foundation include:

• “Repeated use of the Purple Heart trademark in a misleading manner to divert consumers by attracting them through confusingly similar names and logos.”

• Usage of “the website www.purpleheart-donations.org to advertise their services and to collect money.”

• Usage of the “Purple Heart trademark to draw attention from people entering large retail stores such as Walmart and has then used the trademark to further solicit in person donations from such people.”

The lawsuit seeks a permanent injunction against the nonprofit from using the Purple Heart name and registered logos. The Military Order of the Purple Heart is being represented by the Kansas City, Mo.-based law firm Berkowitz Oliver. Attorneys involved in the lawsuit were not immediately available for comment.

Several analysts from nonprofit watchdog groups expressed concerns about the local charity and its director, Andrew Gruber, in two recent Journal-World articles. Analysis of the foundation’s IRS documents showed that only 11 cents of every $1 donated to the group — which has been seen soliciting donations in front of a local Walmart and Dillon’s store — actually goes to support armed services veterans. In addition, Gruber spent six months in a Kansas prison after pleading guilty to stealing a rental car. Gruber had also been paying a fundraising company, run by his brother Scott Gruber, who also had several criminal convictions.

Gruber had stopped responding to Journal-World inquiries, but discussed the lawsuit and his foundation on Wednesday.

Gruber said he wasn’t aware of the Military Order of the Purple Heart when he founded his organization in 2009 and didn’t intend to deceive anyone with his organization’s soliciting and marketing practices.

He’s aware of the lawsuit, and he said that because his nonprofit has few financial resources he expects he’ll soon dissolve the foundation. Gruber also founded another nonprofit, Kids vs. Cancer, which is operated by another brother, Steven Gruber, in Texas. Andrew said that he plans on transferring leadership of that organization to Steven.

The Kansas Attorney General’s Office had been contacted by the Journal-World, as the office has the authority to file a restraining order against a nonprofit if anyone involved in soliciting funds has been convicted of theft. Jeff Wagaman, spokesman for the attorney general, said his office was aware of Gruber’s case but would not make any further comments.

Spokespeople for both Walmart and Dillon’s have not returned repeated calls from the Journal-World asking whether Gruber’s foundation has been banned from soliciting in front of their stores.

Gruber said he took issue with those who believe he is operating a scam, and he said information brought to light by the Journal-World’s investigation “kind of opened my eyes.”

Gruber said he meant well in his charitable endeavors, but “didn’t have the proper skills to get it done.”

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