Firefighters National Trust

• Firefighters National Trust
• Gig Harbor, WA
• Web URL: firedonations.org
• President: Mr. Stephen J. Careaga
• Secretary and Lawyer: David Martin Otto
• Director Curt Anderson
• Director Greg Heuss
• Director Marlin Eller
• Filing Date: August 6th 2001

---

As chance would have it, Firefighters National Trust (FNT) was the only online site accepting donations for firefighters' families that was up and running at the time of the 9/11 terrorist attacks.

Through a quick partnership with Yahoo, firehouse.com, and other high traffic web sites that gave the site massive exposure, firedonations.org suddenly found itself getting as many as 1,000 hits per second from concerned people worldwide looking to help.

Firefighters National Trust was a non-profit charity that was set up by Stephen Careaga a volunteer firefighter. When the attacks on 9/11 hit, the online charity grossed over $11 million dollars. Careaga was using this new acquired money to support large salaries, extravagant perks, and fund other companies so that extra money could be tied to a legimitate expense. In doing this Careaga denied the vitctims in which the donations were inteded to be foretrying to make a living selling computer software to Firehouses, in which he used Firefighters National Trust to open doors for him.

Patrick Joseph Lochrie would later partner with Stephen Careaga in Reality Wireless.

Otto would be enjoined by the SEC.

Otto appears later on as an associate of Andrew Badolato via GeoBio Energy. Otto had the title 'Vice President of Finance and General Counsel' whilst Badolato had 'Vice President of Corporate Finance and Director.' Badolato is closely associated with Steve Bannon, Donald Trumps chief of staff.

---

From 1982 to 1995, Marlin Eller served as Manager of Software Development at Microsoft Corporation. At Microsoft, Mr. Eller was the development lead for the graphics subsystem of Windows 1.0; development lead for Pen Windows; and the Designer of handwriting recognition software.

Mr. Eller also co-authored the book, Barbarians Led by Bill Gates.

He received his Bachelor of Arts, Phi Beta Kappa and magna cum laude, in Mathematics/Physics from Whitman College in 1974 and his Master of science in Mathematics from the University of Washington in 1979.

Eller went to work for Lars Brubaker at Reflexive Entertainment. According to an old interview GameZone did with Brubaker, the start-up capital for getting the company off the ground came as a loan from Marlin Eller. Reflexive was later bought by Amazon.

Other directors of Freehand Systems include, Theodore L. Schroeder:

He founded NetOctave, a Raleigh, NC-based developer sold in 2003 to Fort Lauderdale, Fl. based CyberGuard. a company linked to Gov. Rick Scott and corruption in Florida. A Cyberguard partner Ensec was involed in the security of the World trade Centre

California-based Secure Computing bought CyberGuard for $295 million in stock and cash, the acquisition of CyberGuard was announced in August 2005 and approved in January 2006. Secure Computing started out in 1984 as a research group called the Secure Computing Technology Center (SCTC), it was formed at Honeywell in Minneapolis and the centerpiece of SCTC was its work on security-evaluated operating systems for the NSA. On September 22, 2008, McAfee announced an agreement to acquire Secure Computing. The deal closed on November 19, 2008 at a price of $497 million.

Lonski

NY Post - October 05, 2008

The Port Authority needs its head examined for hiring a team of shrinks with a history of alleged Medicare fraud, shady finances and conflicts of interest to monitor hardhat behavior at Ground Zero. Life Matters, a nonprofit run by psychologists Michael and Evelyn Lonski, was handed a one-year, $300,000 no-bid contract several weeks ago to identify and treat problems among workers rebuilding the 16-acre World Trade Center site.

The Connecticut-based company came recommended, according to the PA, and it had done counseling work at the WTC before.

But The Post found at least a half-dozen glaring red flags, including an active investigation of the firm was launched by Connecticut's attorney general in August.

"We received a number of inquiries or complaints about the group's activities and their use of money that had been contributed," said Attorney General Richard Blumenthal.

The feds accused Michael Lonski of defrauding Medicare while treating elderly residents of adult homes in the 1990s through his now-defunct L&L Psychological Services.

Charges included billing for psychological services not actually provided, including 106 diagnostic exams for one patient.

Lonski agreed to pay back $4 million without admitting guilt and was banned from participating in all federal health programs for five years. He has since been reinstated.

Evelyn Llewellyn Psy.D Co-Founder Executive Director Director of Family and Youth Programs Life Matters New York, NY

Dr. Llewellyn is co-founder and Executive Director of Life Matters, Inc. Dr. Llewellyn facilitates education, group support, interventions and referrals for the families of uniformed and civilian first responders, teachers, medical professionals, and staff who have direct care responsibilities for chronically/terminally ill patients, geriatric populations, and those impacted by trauma, grief, and stress.

Dr. Llewellyn earned her doctorate at New York University’s School of Education, Health and Nursing Professions. She is a licensed psychologist in New York State with postdoctoral certifications in adult psychotherapy and psychoanalysis with a subspecialty in eating disorders and advanced training in critical incident stress management, she has worked closely with the victims of the September 11, 2001 terrorist attacks and other deeply traumatic events.

Michael Lonski PhD Chief of Mental Health Clinical Services 244th Medical Services New York State Division of Military and Naval Affairs Captain, New York State Guard New York, NY

Dr. Lonski, a co-founder of Life Matters, is a clinical psychologist licensed in the states of New York and Connecticut. He holds a post-doctoral certification from New York University in adult psychotherapy and psychoanalysis and from the Post-Graduate Center for Mental Health in child and adolescent therapy and analysis. For more than 20 years he was an organizational consultant/facilitator in hospital, day treatment, private school and geriatric settings and counselor, coach and assessment consultant to the Fortune 500 Employee Assistance Programs.

Following the events of September 11, 2001 Dr. Lonski volunteered for six months as a psychologist and clergy crisis responder at he World Trade Center site. Dr. Lonski currently serves as a Captain in the New York State (NYS) Guard, 244th Medical Services assigned Chief of Mental Health Clinical Services under the auspices of the NYS Division of Military and naval Affairs providing psychological services, education and training, and delivering proactive community educational awareness programs to mitigate the impact of deployment of military personnel and their families.

First responders honor Dr. Mike Lonski

Psychologist Dr Maj Mike Lonski of Old Greenwich, former director of education, training, and clinical services of Life Matters Inc., has received a commemorative recognition plaque from the Fire Department of New York-Special Operations Command Battalion Chief Joe Downey for a decade of support to first responders, military personnel, families and youth affected by the terror attacks of 9/11/01.

In a ceremony at FDNY-SOC Headquarters, B.C. Downey presented the plaque to Dr. Lonski and Dr. Evelyn Llewellyn "with gratitude and our most sincere appreciation for your selfless dedication to supporting our first responders, military, families, and youth.

After the terror attacks B.C. "Joe" Downey worked at the WTC with Dr. (Maj.) Lonski, who served in the support and recovery efforts until May 2002. In the ensuing decade, Dr. Lonski has conducted ongoing education, formal training, field support, and crisis intervention for fire personnel, family members and youth especially those assigned to the Special Operations Command. On 9/11/01, SOC lost 96 of the 343 fire personnel killed in the line of duty.

Dr. Michael Lonski is a psychologist in private practice who serves as a consultant to regional health care facilities. As a major in the N.Y. Guard-DMNA, he is assigned chief of mental health services and lead on the Joint Crisis Emergency Response Team. "Our proactive, prevention programs uniquely teach stress-resistance, resilience, and recovery capabilities that strengthen one's ability to remain healthy and safe, maintain unit morale, and achieve mission performance," he said. "In short, we help build a ready force of community support that helps one another to recover after stressful encounters, meet life's challenges, and turn stressful experiences into opportunities for personal growth."

Maj. Mike Lonski of Old Greenwich, a psychologist and former director of education, training, and clinical services for Life Matters, Inc., has received a commemorative plaque from Special Operations Command Battalion Chief Joe Downey of the Fire Department of New York for a decade of support to first responders, military personnel, families and youth affected by the Sept. 11 terrorist attacks. As a major in the NY Guard-Division of Military and Naval Affairs, Lonski is chief of mental health services and lead on the Joint Crisis Emergency Response Team. Downey, whose father, Deputy Chief Raymond Downey, died in the line of duty at the WTC, presented the plaque to Lonski and Dr. Evelyn Llewellyn in a ceremony this fall. It contains patches from FDNY's five rescue units, seven squads, hazardous materials and marine divisions, Special Operations Command, and Technical Rescue School.

Michael W. Lonski, Ph.D. Co-Founder; Director of Education, Training and Clinical Services; Director of Program Development; Doctoral Level Clinician Dr. Lonski creates the innovative programs that bring educational, self-help and intervention to affected populations. He developed Life Matter's signature resiliency program, The Psychological Third Alarm, which is a program of mental health preparedness for emergency responders and family members. He also has worked with firefighting and military personnel, local and regional municipal agencies, labor unions, medical providers, financial entities and the military to advise, develop and educate their workforces in comprehensive crisis management, stress and grief-counseling programs. He was instrumental in creating a Youth Leadership outreach program in Chinatown, which was heavily affected by September 11th and whose residents continue to face linguistic and cultural barriers to the delivery of mental health services. Dr. Lonski co-founded Life Matters as an outgrowth of his personal work with uniformed and civilian emergency responders after September 11th. He has emerged from his intensive work at Ground Zero, in firehouses and at fire scenes throughout the New York metro area as a recognized authority in Critical Incident Stress Management, Post Traumatic Stress Disorder (PTSD) and disaster response. He earned certification as a Level 1 HazMat Technician, enabling him to better understand rescue personnel on hazardous duty. A clinical psychologist licensed in the states of New York and Connecticut, Dr. Lonski holds post-doctoral certification from NYU in Adult Psychotherapy and Psychoanalysis and from the Post-Graduate Center for Mental Health in Child and Adolescent Therapy and Analysis. For more than 20 years he has served as an organizational consultant and facilitator in hospital, day-treatment, private school and geriatric settings, and as counselor, coach and assessment consultant to Fortune 500 Employee Assistance Programs.

At the World Trade Center, the New York Naval Militia acted as a first responder and a force multiplier in a joint service effort. On September 11, 2001, BGEN Robert L. Wolf led the Naval Militia operations at the NYC OEM HQ.

Article about Firefighters National Trust

A Charity Fails Families Of Fallen Firefighters After 9/11 September 7, 2008

On a mild day in late November 2001, Stephen Careaga stood under the brick façade of a storied New York fire station, an unlikely benefactor from the Pacific Northwest who traveled to Manhattan with a cashier's check for nearly $4 million.

Three miles downtown, workers were still recovering the bodies of firefighters entombed in the twisted wreckage of the World Trade Center, and the New York Fire Department's hastily assembled funeral desk was scheduling the last few dozen memorials for the 343 firefighters killed on 9/11.

Careaga, a one-time volunteer firefighter and reserve police officer, had been trying to make money selling computer software to rural fire departments in Washington state. To get a foot in the door, he created a tiny nonprofit called FireDonations, with a website that would-be customers could use to collect online donations for fallen firefighters.

That was in August 2001.

A month later, when jumbo jets plowed into the World Trade Center towers and hundreds of firefighters trudged up the stairs to their deaths, Fire-Donations was the only fire-services charity on the Internet equipped to take online contributions for the cause.

Boosted by links on Yahoo and other national websites, money poured in from around the globe, peaking at a rate of $250,000 an hour. The nonprofit, hastily registered with the IRS and renamed Firefighters National Trust, collected $4 million in a week's time, and $6 million by the end of September.

In all, donors contributed $11 million to Firefighters National Trust, which promised that the money would go "directly to the spouses and children of the New York Firefighters and Rescue workers who lost their lives in the World Trade Center tragedy."

But after that high-profile trip to New York, and a follow-up check for about $400,000, the largesse from Careaga's charity came to an abrupt halt. Millions promised in scholarships were never distributed. More than $1.6 million went to money-losing ad campaigns. Celebrity endorsement deals lost money, too.

The donations also evaporated in six-figure salaries for Careaga and an associate, hundreds of thousands in legal fees to a board member's law firm, and thousands more to the software company Careaga created.

By the time Firefighters National Trust shut down in 2005, after less than four years, more than $1 million ended up in the hands of key employees and their companies, tax filings show.

In the charity's final act, Careaga transferred the $2 million still in the bank to a psychologist in Greenwich who had set up a nonprofit counseling service after a federal fraud case cut off his access to lucrative Medicare reimbursements.

Soon afterward, tax records show, that Greenwich nonprofit paid $150,000 to a consulting company Careaga had set up out of his house. Careaga acknowledges being paid by the charity, but says he can't recall specifically what he did or for how long he worked.

Americans give hundreds of billions of dollars to charity every year, and are never more generous than in the wake of mass disasters. But experts in philanthropy say that generosity can easily be lost when charities — particularly new charities — face a windfall of cash.

That is how Marlin Eller sees the rise and fall of Firefighters National Trust.

"They started on a shoestring with not much idea of how they were going to go about running it. And then all of a sudden, they found themselves with far more money than they had ever been expecting," said Eller, a computer programmer involved in Careaga's software company who later became chairman of the charity's board of directors.

"It took time to discover how little we knew."

Firefighters National Trust took an improbable path to the national stage.

After launching Civil Communications, his software sales company, Careaga saw the charity as a way to "introduce Civil Communications to fire departments and police departments, who might be interested in purchasing the software we were creating for them," he said in a 2004 court case.

Then came 9/11 and millions in donations. Careaga abandoned Civil Communications and focused on the suddenly flush charity, though not before his private software company received $50,000 from Firefighters National Trust for "web development services."

Careaga and others worked long hours keeping up with the initial outpouring of money. By November, when he carried a check for $3,980,730 to Engine 1, Ladder 24 — the New York City firehouse that was home to Fire Chaplain Mychal Judge, who died in the Twin Towers — Firefighters National Trust had climbed out of obscurity and solidified its place as a significant post-9/11 firefighter charity.

With that prominence came the trappings of a major player. Although it was originally envisioned as a volunteer operation, Careaga took a $125,000 salary, while his No. 2 official received $100,000 a year. The charity also ran up large legal bills — nearly all of which went to the Otto Law Group, led by the charity's secretary, David M. Otto, who was also the lawyer for Civil Communications. Overall, Firefighters National Trust paid Otto's firm $400,000.

There were laptops and BlackBerrys and airport lounge memberships for the charity's officers. In time, there were $10,000-a-month marketing deals with prestigious New York ad agencies, and discussions with Creative Artists Agency, one of the top talent houses in Hollywood. The stars of the television show "Ally McBeal" were working on a public-service announcement. Professional sports arenas hung banners with the charity's website address. The curator of a Salvador Dali exhibit offered to donate proceeds from a New York show. There were parties with Robert DeNiro and photo-ops with Ivana Trump.

There also were allegations of misspending, including airline tickets, expensive meals and other perks for the spouses of charity officials. Eighteen days after the terrorist attacks, according to a lawsuit filed by a former employee, charity funds were used to pay a $695 bill at Le Salon Paul Morey Spa in Seattle for Careaga's wife and the wives of two associates. More than two years later, after complaints to state and federal officials, Careaga wrote a personal check reimbursing the charity.

That same weekend, Firefighters National Trust paid nearly $5,000 at a resort lodge and spa outside Seattle for six people affiliated with the charity, and five of their spouses. Careaga's room bill was nearly $1,300. Officials said it was a business gathering, although Careaga later reimbursed Firefighters National Trust part of the $575 the charity paid for gift baskets of wine, snacks and spa products.

But in the months after 9/11, Firefighters National Trust had a stellar public reputation and remained a popular choice for donors. By July 2002, Firefighters National Trust had received more than $9 million, with nearly half of it still in the bank.

Charity officials had said that all of the money raised in the wake of the Sept. 11 attacks would be transferred to the New York Firefighters 9-11 Disaster Relief Fund, which was administered by the International Association of Fire Fighters. But after a dispute over the pace of payments, the union broke off ties with Firefighters National Trust, and the charity stopped sending money directly to New York. Instead, Careaga announced plans to set up a $3.5 million scholarship program for the children and spouses of New York firefighters.

"We felt very strongly that all of the money donated as a result of September 11th should go directly to the families in New York," Careaga said in a press release introducing the program. "It was clear to us that was the intention of the donors, and we are honoring those wishes."

But it never happened.

The "FDNY September 11th Scholarship Fund" was supposed to dole out $3,000 scholarships to children and spouses attending four-year schools, and grants of up to $1,000 for students at two-year colleges or vocational-technical schools.

But in tax filings, the charity reported granting just five $1,500 scholarships by the time Firefighters National Trust shut down.

Throughout the charity's second year, operational expenses dwarfed charitable giving, swallowing more than 90 cents of every dollar the nonprofit spent, including a million-dollar marketing campaign that failed to make a profit.

The charity also was being pulled apart by internal battles. In May 2002, Careaga fired the director of operations, Joseph Gagnon. Careaga cited Gagnon's poor performance and frequent absenteeism as he juggled his charity job with his work as a firefighter. Gagnon claimed he was terminated in retaliation for raising questions about the charity's finances.

Gagnon sued, and also contacted several of the charity's high-profile supporters in New York, claiming — according to a countersuit — that Careaga was embezzling money and that the charity was about to be shut down.

One by one, would-be deals — including the Dali exhibit and Hollywood endorsements — fell apart. The donations were drying up, too. From July 2003 to June 2004, Firefighters National Trust raised just $80,000 — less than it made in an hour in the days after 9/11 — even as the charity maintained a $300,000 payroll and reported half a million dollars in fundraising costs.

Careaga, meanwhile, had started looking at other opportunities, and in early 2004 became chairman and chief executive of both Nannaco Inc. and Reality Wireless Networks Inc., the first of a string of penny-stock companies — most operated from a rented mailbox — with which he and Otto, the charity's lawyer, would become associated. Both men were compensated with millions of shares of the low-priced stocks, while Careaga continued to collect his $125,000-a-year salary from Firefighters National Trust.

By the beginning of 2005, the fundraising was over and Careaga made plans to shut down the charity and transfer all remaining funds — more than $1.9 million — to Life Matters, a Greenwich charity run by husband-and-wife psychologists Michael W Lonski and Evelyn Llewellyn that provided psychological counseling to firefighters.But the money flowed both ways.

While Careaga was working to send the leftover cash to Life Matters, he was also negotiating to have the charity hire a company he had recently created out of his home, called CDF Consulting. Within the year, Life Matters sent $150,000 to CDF Consulting.

Careaga defended the payment. "There was a significant amount of knowledge that needed to be transferred, and Life Matters felt it was in their best interest to get that knowledge and to have some assistance setting up some programs, so that's what I did," he said in a recent interview.

Careaga initially said he helped develop a counseling program, a post-traumatic stress program and scholarship programs, though he later acknowledged that LifeMatters has no scholarship program.

"You might want to talk to them specifically about the programs," he said, "because it's been quite a few years and I don't really recall off the top of my head what the programs were." Peter Chavkin, a lawyer speaking for Life Matters and Lonski, said Careaga was not hired to help the charity develop counseling programs, but rather to help find new sources of funding, as well as identify additional firehouses and other sites that might benefit from Life Matters' services.

He said Life Matters retained Careaga's company for two years, but terminated the arrangement after a year because it was dissatisfied with Careaga's work.

When Firefighters National Trust forwarded its dissolution plan to Washington state officials, as required by law, an assistant attorney general warned against financial conflicts of interest.

"I would ... suggest exploring the possibility that any individuals currently associated with the Firefighters National Trust may personally benefit from a transfer to Life Matters," Jeffrey T. Even, an assistant attorney general, wrote in a January 2005 letter to Tracy Shier, one of the lawyers in Otto's law firm.

Shier, who was later disbarred in an unrelated matter, assured regulators that the transfer was clean, and Even sent another letter approving the plan "based on your representations that the distribution of assets is not conditioned upon any agreement to provide employment or any other financial arrangements to benefit any officer or director" of Firefighters National Trust.

Careaga said the Washington attorney general's office was aware of the arrangement. "We were very upfront with the attorney general and the attorney general approved," Careaga said in a recent interview. "They were completely fine about it."

But Even said last week that he didn't recall the consulting deal or the $150,000 payment.

"That doesn't sound like anything that was explained at the time," he said.

Even said he planned to review his correspondence with the charity to determine if he had been misled.

Eller, the charity's chairman, said he, too, was unaware of the $150,000 payment to Careaga's consulting company, although he later said it was possible it was mentioned at a board meeting, but "just didn't stick with me as anything that was unusual."

Chavkin, the lawyer for Life Matters, said the paperwork committing the $1.9 million from Firefighters National Trust was completed before Life Matters had finalized its consulting deal with Careaga.

"My clear impression from Mike [Lonski] and from the lawyer that handled this is that on Mike and Life Matters' side of things, there was no link between the distribution of moneys and the ultimate retention for one year of CDF," Chavkin said. "And Mike had been told that the attorney general's concern was only that the two not be linked as a quid pro quo."

Lonski and Llewellyn created Life Matters in April 2002, at the same time federal investigators were probing millions in questionable Medicare claims made by Lonski and his private practice, L & L Psychological Services. In October 2002, Lonski and L&L agreed to pay $4 million to settle allegations that they had bilked the federal government by filing false claims in the 1990s.

According to a civil complaint filed by the Justice Department, Lonski submitted bills to Medicare for as many as 106 diagnostic exams for the same patient, and for performing as many as 67 diagnostic exams in a single day. The complaint also alleged that Lonski charged Medicare for services provided to relatives, claimed movie screenings as "group therapy" and then billed the government for as many as 75 clients who watched the movies, and charged for specialized psychological services that were never delivered.

Under the settlement, Lonski was required to pay $750,000 up front, and the remaining $3.25 million in monthly installments based on his income.

The settlement also cut him off from reimbursements by Medicare and every other federal health program. But by the time the settlement was signed, Lonski and Llewellyn had already set up Life Matters, registering the charity at their home in Old Greenwich, which was recently valued at more than $3 million.

Careaga said he was introduced to Lonski by New York firefighters who had high regard for the Greenwich couple's programs. In late 2003, Firefighters National Trust began sending money to Life Matters to pay for grief counseling and training, and grants to the Greenwich charity topped $700,000 by the end of 2004 — accounting for nearly half of Life Matters' income.

Bolstered by the funding, Lonski and Llewellyn paid themselves more than $480,000 in 2004, and an average of about $360,000 in the following two years. Lonski is still paying off his debt to the federal government — and still counseling those affected by 9/11; on Friday, Chavkin said, Lonski was working at the World Trade Center site.

Careaga, meanwhile, has left the nonprofit arena and returned to the business world. But he said he is proud of his tenure at Firefighters National Trust.

"We did, I think, an amazing thing, and we worked very hard to be completely legitimate from the very first day, even before 9/11, and treated it with the utmost integrity and ethics," Careaga said. "And the bulk of the donations — as much as 90, 95 percent — went to its intended purpose, and as far as charities go, that's above and beyond the gold standard."

But those numbers aren't correct. Even by the charity's own bookkeeping, just 65 percent of the millions that poured into Firefighters National Trust went for what it counted as charitable purposes.

In its early promotional material, Firefighters National Trust said it was created partly out of frustration that many firefighter charities spend far too much on fundraising and administration. They pledged that overhead would never exceed 10 percent.

With charitable spending falling to pennies on the dollars while fundraising and administrative costs soared, board members decided it was time to pull the plug.

"Our charter was to take the money and spend it charitably, rather than spend it on us trying to learn how to run a charity," Eller said. "After a certain amount of time, the board was pretty much behind: You know, it would be better if we would just not continue.

"Whether we wasted more money than we needed to along the way, boy, that's a hard one to know."