How U.S. Pain Foundation Inflated Its Membership

By Pat Anson, PNN Editor

The U.S. Pain Foundation has long claimed to be “the leading chronic pain advocacy organization in the country,” with volunteers in 50 states and nearly a quarter of a million social media followers.

“What started as a small grassroots group now has 90,000 members nationwide and a network of 1,000 volunteers,” a U.S. Pain press release said in 2017.  

Impressive numbers like that helped the Connecticut based non-profit rise to national prominence in the pain community and raise several million dollars in donations from major healthcare companies such as Pfizer, Lilly, AstraZeneca, Novartis and Johnson & Johnson.

But PNN has learned that the tabulation of U.S. Pain’s membership and followers is unreliable and misleading. At best, they’re a product of bad metrics and marketing hype. At worst, they’re evidence of consumer fraud.  

“If they’re talking about members, then they should have a verified roll of members. And if they’ve inflated that number and there’s no rational basis for coming up with the number that they’re telling the public, then that could potentially be considered consumer fraud,” says attorney Seth Perlman, who has represented non-profits for 30 years.

In recent months, U.S. Pain has announced it is “undergoing a complete revamp of its transparency policies and procedures.” One of the first things the organization did was significantly downsize its membership from 90,000 to 15,000.

U.S. PAIN FOUNDATION 2016 PROMOTION

U.S. PAIN FOUNDATION 2016 PROMOTION

What happened to the 75,000 missing members?

“We have changed the way we classify and report members,” interim CEO and board chair Nicole Hemmenway said in an email to PNN. “Previously, ‘members’ included mailing list subscribers, support group participants, INvisible Project readers, anyone who received our print materials, and people who attend our events. Now the term ‘member’ has been redefined as the number of individuals who have signed up for our mailing list.”

Hemmenway has been interim CEO since May, when U.S. Pain’s founder and longtime CEO Paul Gileno resigned at the request of the board of directors.  “As the new leader, I am heading up a review and revision of our governance and transparency policies,” Hemmenway said. 

But full transparency has been slow in coming. Not until last week did Hemmenway and the board disclose the reason behind Gileno’s forced resignation. An internal audit found evidence of “financial irregularities” and that Gileno embezzled an undisclosed amount of money from the non-profit.  

“I am sad to say that I made some big mistakes over the past few years and took money from US Pain for my personal use. I make no excuses for this,” Gileno confessed in an email sent to U.S. Pain’s leadership.  

We asked Gileno why U.S. Pain’s membership numbers were so high while he was CEO. 

“Our stats were based on email sign ups, social media sign ups and in-person sign ups,” Gileno said. “I have no clue why they were reduced.” 

In addition to the steep drop in membership, U.S. Pain has also seen a decline in its social media following. At one time, the organization claimed to have 59,000 followers on Twitter.

That was reduced to about 13,000 followers after Twitter purged from its system millions of fake and inactive accounts. 

from US Pain foundation 2018 promotion

from US Pain foundation 2018 promotion

“The (Twitter) reform takes aim at a pervasive form of social media fraud,” The New York Times reported. “Many users have inflated their followers on Twitter or other services with automated or fake accounts, buying the appearance of social influence to bolster their political activism, business endeavors or entertainment careers.”  

Some of the followers that U.S. Pain has on Twitter were apparently bought and paid for in a promotional scheme to sign up new followers. Hemmenway says the board never authorized such an expenditure. 

“Based on records, in 2016, $515 was spent on a Twitter digital marketing initiative under previous leadership. This is not something the Board or others within the organization were aware of or approved,” Hemmenway said. 

Hemmenway has been a key member of U.S. Pain since it was founded in 2011, serving as vice-president until Gileno’s departure. According to Gileno, she oversaw the non-profit’s social media efforts. “Nicole and the board have always been in charge of that, as was director of communications,” Gileno told PNN. 

Even after the Twitter purge, U.S. Pain still appears to have an unusual number of suspicious followers. StatusPeople.com, a website that analyzes Twitter data, estimates that only a third of @US_Pain’s 13,000 followers are legitimate. The rest are either fake or inactive.

SOURCE: STATUSPEOPLE.COM

SOURCE: STATUSPEOPLE.COM

There is no similar way to analyze the legitimacy of U.S. Pain’s 216,000 followers on Facebook, a social media platform where you can also buy followers.

Consumer Fraud Issue

Marketing that misleads or exaggerates may be all too common in the for-profit world, but it’s risky business for a charity dependent on donations and public goodwill. Taken too far, it could lead to allegations of civil or even criminal misconduct, according to attorney Seth Perlman. 

“That’s only an issue if they use those numbers to impress upon the donating public or their supporters about how widespread their message is. And how much awareness the organization has with the public. If they’re using it as a way to inducing people to support the organization, it’s a potential consumer fraud issue,” said Perlman. “If you mislead the public and present information that is incorrect and is purposely inflated, the regulators take an extremely dim view of that.  

“It’s almost always a civil matter, unless it rises to the level of an absolute egregious fraud where there is absolutely no basis for making the claims that they did and it was simply a rip off.  Then that could turn into criminal (fraud). But the civil remedies are significant, including removal of the board of directors.” 

As PNN has reported, U.S. Pain is now under investigation by the Connecticut Attorney General’s office and the Connecticut Department of Consumer Protection, which regulates charities in the state.  Because its registration as a charity recently expired, U.S. Pain at this time cannot legally solicit donations in Connecticut. 

Federal prosecutors at the U.S. Attorney’s Office would neither confirm or deny if they were investigating U.S. Pain and its former CEO, although Gileno anticipates going to prison for fraud or tax evasion.  

“I will have to go to jail maybe as long as 3 years for taking the money from US Pain,” Gileno said in his confession. 

U.S. Pain is also in danger of losing its tax-exempt status.  The non-profit’s tax returns for 2016 and 2017 have not been filed and are delinquent.  Under IRS rules, a non-profit that does not file returns for three consecutive years automatically loses its tax exemption. Hemmenway blames Gileno for the long delay in filing, but expects the tax returns to be completed in coming weeks. 

“Because of the inaccurate and incomplete information provided by the former CEO, it has taken a significant amount of time to compile accurate books and records,” she said. “The organization has been working diligently with its new team to prepare the 2016 and 2017 returns, with the goal of filing them by the end of the year.”

U.S. Pain Foundation Under Investigation

By Pat Anson, PNN Editor

The Connecticut Attorney General’s office has opened an investigation into allegations of financial irregularities and embezzlement at the U.S. Pain Foundation, PNN has learned.

“I can confirm that our office has had contact with a representative from the U.S. Pain Foundation and that our office has opened an investigation into this matter. We’re unable to comment further,” said Jaclyn Severance, a spokesperson for Connecticut Attorney General George Jepsen.

U.S. Pain released a statement late Friday accusing former CEO Paul Gileno of misusing funds. Gileno resigned at the request of the non-profit’s board of directors in May and later sent an email to U.S. Pain leadership confessing to the crime.

“I am sad to say that I made some big mistakes over the past few years and took money from US Pain for my personal use. I make no excuses for this,” Gileno wrote.

+uspainlogo.jpg

Until last week no explanation was made to U.S. Pain’s members, volunteers or donors about the reasons behind Gileno’s resignation. The Connecticut-based non-profit has still not disclosed the amount of money stolen, when the thefts occurred, or if others were involved.

“We have been working diligently to rectify the situation. Steps that we’ve taken include alerting the appropriate legal authorities and cooperating fully in the investigation; seeking restitution of the misused funds; implementing a more robust system of checks and balances; and hiring a new interim chief financial officer, new counsel, and a new tax accountant,” U.S. Pain said.

PNN has confirmed the state Attorney General’s Office was recently contact by U.S. Pain, but lawyers there say the non-profit probably should have acted sooner.

“There is no requirement under the law to report embezzlement, but it is typically in their best interest to do so,” said Severance.

U.S. Pain was founded by Gileno in 2011 and has received several million dollars in mostly corporate donations to fund programs that raise awareness about chronic pain.

Lapsed Registration

The Connecticut Department of Consumer Protection, which regulates charities in the state, recently opened a second investigation of U.S. Pain after its registration lapsed on December 1. Without an active registration, U.S. Pain cannot legally solicit charitable donations in Connecticut. 

“They have not submitted renewal paperwork. So technically they’re not supposed to be soliciting in Connecticut,” said spokesperson Lora Rae Anderson. “They can’t make phone calls or put ads in Connecticut newspapers. They cannot actively solicit in the state.” 

In addition to U.S. Pain’s legal problems, it is in danger of losing its tax-exempt status. The non-profit’s tax returns for 2016 and 2017 have not been filed and are delinquent.  Under IRS rules, a non-profit that does not file returns for three consecutive years automatically loses its tax exemption. U.S. Pain’s 2015 tax return was filed in October 2017, over a year overdue.

“Because of the inaccurate and incomplete information provided by the former CEO, it has taken a significant amount of time to compile accurate books and records,” interm CEO and board chair Nicole Hemmenway said in an email to PNN last week.

Hemmenway has been a key member of U.S. Pain since its founding and sources say it is unlikely she was unaware of the financial irregularities that Gileno is accused of.

Tax returns open a rare window into how much money a non-profit has raised and how it was spent. Non-profits are not required by law to disclose who their donors are or the size of their donations, but their tax returns need to provide a detailed account of what was spent on salaries, travel, office supplies, accounting and other expenses. According to U.S. Pain’s 2015 tax return, Gileno was paid a salary of $403,000.