(WNY News Now) – New York Attorney General Letitia James has filed a lawsuit against Healing for Heroes and its leaders, alleging charitable donations were misused and the organization failed to provide the veteran retreats it advertised.

New York Attorney General Letitia James has filed a lawsuit against Healing for Heroes – A Disabled Veteran’s Retreat and Wooded Oasis Inc., along with its leaders Thomas L. Nelsen and Jennifer S. Milchanoski Nelsen.

The verified petition, filed Aug. 12 in Erie County Supreme Court, alleges the Bemus Point-based nonprofit engaged in deceptive fundraising, improper financial practices and self-dealing. The filing seeks monetary and injunctive relief, as well as dissolution of the charity. The court filing carries a notice stating it had not yet been reviewed and approved by the Erie County Clerk at the time of the document’s printout.

According to the Attorney General’s allegations, Healing for Heroes was formed in March 2024 to provide disabled veterans with free retreat-style stays at a 30-acre property on Slide Joslyn Road in Bemus Point. The property is jointly owned by Nelsen and Milchanoski-Nelsen, who serve as the organization’s president and secretary-treasurer, respectively.

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

The lawsuit also alleges Healing for Heroes began soliciting donations in 2024 before registering with the Attorney General’s Office as a charitable organization on May 1, 2025 following the resignation and threat of legal action by former board member Joshua Larsen.

Larsen, on February 26, 2025, submitted a complaint to the OAG, alleging that Nelson was misusing funds for his and his wife’s personal benefit rather than helping veterans and that he would not allow the board to inspect the organization’s books, records, or financials.

The Attorney General alleges more than half of the donations procured were spent on utility bills, maintenance and improvements to the Nelsens’ personally owned property, along with expenses including meals, shopping, vehicle repairs and gasoline.

The petition further alleges the organization conducted only four overnight veteran retreats during 2024 and 2025. According to the filing, the participants included board members, family members and friends. The Attorney General also alleges that at least some veterans who were not connected to the organization’s leadership were turned away before they could apply.

The organization later shifted its focus from overnight retreats to shorter day programs, according to the petition, claiming that they “couldn’t afford the retreats.” The expenses listed for the retreat-style stays consisted of meals, lodging at the property, a house cleaner after the retreats, and incidentals. However, the meals were sponsored and the lodging was already paid for since the property is owned by the Nelsons.

The day events included pizza and fire, coffee and donuts, bonfires, and a family barbecue potluck. The Attorney General alleges the day programs did not fulfill the organization’s advertised mission of providing disabled veterans with free retreat-style stays.

The lawsuit also focuses on the property’s use as an Airbnb rental.

The Nelsens advertised the property as “Paradise Lodge” and stated that 100% of Airbnb proceeds would support Healing for Heroes. The Attorney General alleges the property generated more than $51,000 in Airbnb income between January 2023 and August 2025, including more than $33,000 received during the period covered by the charity’s operations.

According to the petition, the Airbnb proceeds were deposited into the Nelsens’ personal bank account rather than the nonprofit’s account.

The Attorney General also alleges Healing for Heroes had inadequate financial controls and board oversight.

The petition states that some donations were deposited into personal accounts, including $5,525 in Venmo donations deposited into Milchanoski-Nelsen’s personal checking account. It also alleges that cash donations and Airbnb proceeds were not fully reflected in the organization’s financial statements.

The filing further alleges the organization spent approximately $17,020.52 from its nonprofit bank account between June 2024 and August 2025 on vehicle gasoline, purchases, shopping, restaurants and property utility bills. Another $7,445 in cash donations was allegedly spent on gasoline, food, vehicle expenses, repairs and board-member reimbursements.

The Attorney General alleges the charity did not have adequate conflict-of-interest procedures during much of the period in question. The petition states that a formal conflict-of-interest policy was not adopted until November 2025, more than 20 months after the organization began operating.

The Attorney General is asking the court to dissolve Healing for Heroes and direct that any remaining assets be used for charitable purposes consistent with the organization’s stated mission.

The petition also seeks an order preventing the organization and its leaders from soliciting charitable funds, removal of Nelsen and Milchanoski-Nelsen from their leadership positions, and permanent restrictions on their serving as officers, directors or trustees of charitable organizations in New York.

The state is also seeking restitution and damages related to the alleged misuse and waste of charitable assets.

The allegations in the petition have not been established as facts by a court. The case will proceed through the judicial process, where the respondents will have an opportunity to respond to the claims.