New York Attorney General Letitia James filed a civil lawsuit Wednesday against Healing for Heroes – A Disabled Veteran's Retreat and Wooded Oasis, Inc., accusing the Bemus Point charity of defrauding donors and misusing charitable assets for personal gain. The organization, which marketed itself as a free retreat provider for disabled service members, is instead accused of funneling donor money and renting out its 30-acre property for private profit.
“I'm suing Healing for Heroes, a purported veterans' charity that claimed to provide free retreats for disabled veterans, then used the property for their own gain,” James wrote in a statement announcing the case. “I won't allow bad actors to profit off of the generosity of New Yorkers,” she added. The lawsuit names Board President Thomas Nelsen, a 20-year Marine Corps veteran, and Board Secretary and Treasurer Jennifer Milchanoski-Nelsen as defendants, according to a press release from the Attorney General's office. The couple established the non-profit in 2024 on a 30-acre property in Bemus Point, located in Chautauqua County in Western New York near Chautauqua Lake.
Free Retreats Promised, Few Delivered
Despite advertising free retreats for disabled service members, state investigators found that Healing for Heroes hosted just four retreats since its 2024 founding — and all of them exclusively served board members and their personal friends and family, the AG's office reports. The organization had marketed itself around peer connection and outdoor recreation, positioning itself as a resource for veterans seeking community and healing.
Locally, the group built goodwill by promoting the site as an eco-friendly “woods therapy” venue, according to My CHQ, featuring three freshwater streams and wooded trails. The founders actively solicited support from the local Chautauqua County community and engaged with area nature centers and veteran events, building a public profile that state investigators say masked the property's actual use.
Paradise Lodge on Airbnb
Instead of reserving the land for veterans, the Nelsens rented the charity's property on Airbnb at least 32 times during 2024 and 2025 under the listing name Paradise Lodge, pocketing all $33,312.16 in proceeds. Investigators say the couple falsely assured guests that the rental income supported veterans, even as that money went directly into their own pockets rather than the charity's stated mission.
The financial diversion extended well beyond the rental listings. Out of nearly $100,000 raised in public donations, state prosecutors say nearly half was funneled toward capital improvements on the Nelsens' own property — including a bathroom renovation and a new deck — along with personal shopping, meals, vehicle repairs, and gas.
What the State Is Seeking
Attorney General James is seeking court orders to dissolve the corporation entirely, redistribute its remaining assets to legitimate veterans charities, and order full financial restitution from the Nelsens. Her office is also asking the court to permanently ban both founders from soliciting charitable funds or serving in leadership positions for any non-profit in New York.
Under New York's Not-for-Profit Corporation Law and Executive Law Article 7-A, officers and directors of charities owe strict fiduciary duties of loyalty to the organizations they run, according to background provided by the Unified Court System. Those statutes give the Attorney General's Charities Bureau the authority to dissolve non-profits found to have engaged in fraudulent conduct and to recover assets that were misapplied.
Part of a Broader Pattern
This is not the first time a veterans-focused charity has drawn state scrutiny. In January 2021, New York joined ten other states in securing a fraud settlement against Florida-based Healing Heroes Network, Inc., a separate sham charity that had spent less than 1% of the millions it raised on veterans' medical care, according to the California Department of Justice.
That case was part of a larger national effort. Federal and state charity regulators launched Operation Donate With Honor in July 2018, bringing more than 90 law enforcement actions across all 50 states to combat deceptive fundraising that targeted military and veterans causes, per the Federal Trade Commission. The Bemus Point case now joins that history as another example of regulators stepping in after donors' trust in veterans' causes was allegedly exploited for personal gain.
It remains unclear how quickly the court proceedings against Healing for Heroes will move, or exactly how any remaining assets would be liquidated and redistributed to legitimate Western New York veterans organizations. Whether the civil case could lead to any criminal charges against the Nelsens has not been addressed in the filings made public so far.
