He promised a resource center for Veterans in Loris. Now he’s facing federal fraud charges
The founder of a nonprofit that planned to open a Veterans resource center in Loris is facing federal fraud charges after allegedly using donated funds for his personal use.
A federal grand jury indicted James “Billy” Arehart, 45, in November on charges including mail fraud, wire fraud, money laundering and making false statements to federal agents, according to a news release from the U.S. Department of Justice.
Arehart, who initially established Providing Hope VA in 2018 while living in Virginia, was able to raise more than $9 million for the charity through 2021, primarily by selling tickets to raffles for high-end vehicles that were advertised on the nonprofit’s Facebook page, the indictment states.
An attorney representing Arehart did not immediately respond to a request for comment, and attempts to reach Arehart through the charity — including a voicemail, email and knock at the door of its Loris office building — were unsuccessful.
Arehart told participants that money spent on the raffle tickets was tax deductible even though the Internal Revenue Code specifically restricts deductions for purchases of games-of-chance tickets, according to the indictment. He attempted to evade this prohibition by providing receipts to raffle ticket purchasers that referred to the money spent as a donation.
Arehart, who had sole control of the nonprofit’s finances, awarded himself an increasing amount of salary and bonuses from its funds, including $162,000 in 2019, $292,000 in 2020 and $525,000 in 2021, the Department of Justice alleged. Meanwhile, he represented to potential donors that he was only taking a salary commensurate to his previous job as a government contractor, though the indictment states he never earned more than $97,000 from that employer.
Arehart solicited funds for Providing Hope VA by advertising its mission as aiding homeless and other at-risk Veterans with a specific goal of building a center that could provide housing, clinical care, counseling and employment workshops for veterans in need.
The nonprofit held a groundbreaking ceremony in January at the proposed site, next to its office in Loris off Highway 701 South, but a visit to that property Friday showed minimal progress.
Loris Mayor Todd Harrelson told The Sun News that property had been annexed into the city as part of their support for the project, and he was hopeful Providing Hope VA or another charity would fulfill the promise of this center to provide needed support for local Veterans.
But the “building fund” meant to fund the project that Arehart had assured donors was separate and growing never existed, the indictment states, and Providing Hope VA actually had just one bank account, which Arehart used “as he saw fit.”
Those purchases included veterinary services for his own pet, which he listed in IRS filings as “direct relief” to veterans and improvements to his personal residence, according to the indictment.
Arehart purchased a Myrtle Beach house in his name in September 2019 and then began leasing the home that December to Providing Hope VA, paying himself $4,000 a month from the nonprofit’s funds, purportedly for their “Vacations for Heroes” program, offering one week stays for active service members, the indictment states.
He then spent more than $360,000 from the nonprofit’s bank account to improve the property, including adding a pool, patio and garage, the DOJ alleged, then used the home for the Veterans vacation program for just six months before terminating the lease and taking it back as his full-time residence without reimbursing the charity.
The Providing Hope VA Facebook page remained active this week, advertising its latest raffle for a 2023 Chevy Corvette plus $25,000 in additional cash prizes.
Arehart’s bond conditions state he’s not allowed to personally participate in fundraising activities, and he must relinquish decision-making authority over the nonprofit’s finances.
He faces up to 20 years in prison if convicted, according to the news release.
