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
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
“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
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.”
