Vermont man’s barefoot trek runs into trouble

STAFF WRITER – Published: January 31, 2010

via http://www.rutlandherald.com/article/BT/20100131/NEWS01/1310350/0/WW2

Tellman Knudson told the world last September he would run barefoot the equivalent of a marathon a day from New York City to Los Angeles to raise $100 million for homeless teens.

But after spending four months and $500,000 in road expenses to reach West Virginia, Knudson has returned to his Vermont home to “regroup.” He’s now facing questions about why his charity says it’s an officially registered nonprofit even though its name doesn’t appear on the Internal Revenue Service’s list of recognized organizations.

The 33-year-old Brattleboro resident and self-described millionaire Internet marketer made big promises Sept. 9 when he took off his shoes and began to trot westward toward a finish line more than 3,000 miles away.

“Look for me on the cover of Guinness Book 2011,” Knudson wrote on his fundraising Web site www.runtellmanrun.com.

At the time, the Vermont attorney general’s Consumer Assistance Program had received complaints about Knudson’s marketing business, and the word “scam” was showing up as a popular search when you Googled his name. Nevertheless, most reporters simply have parroted the runner’s press releases in print or on air.

Off camera, however, Knudson wasn’t running his promised 26 miles a day. He didn’t hit that goal until Oct. 25, his Web site reports, then dropped to seven miles on Oct. 26, three miles on Oct. 27 and no miles on Oct. 28, when he took one of several multiday breaks because of problematic weather or persistent foot injuries.

Knudson, meanwhile, has been reluctant to say how much money he has raised.

In interviews before the kickoff, he said he was running to help Virgin Unite, the nonprofit foundation of Sir Richard Branson’s Virgin Group that aids the RE*Generation USA network of shelters and volunteers for homeless youth.

Virgin Unite reaped about $250,000 in donations credited to Knudson, www.virginunite.com reports. According to the runner, most of that money came from two Internet businesses, geniusnetwork.com (run by Piranha Marketing Inc. of Tempe, Ariz.) and Maverick Business Adventures (a Web company with an “invitation-only membership exclusively for successful entrepreneurs, CEOs and business owners who want to live life to the fullest”).

Knudson publicized his tie to Virgin Unite during training last summer, only to drop that donation link from his fundraising materials upon the run’s start last fall, when he replaced it with a referral to his own charity, the newly formed Tellman.org.

People who tracked donation totals on virginunite.com no longer could do so on runtellmanrun.com. After two weeks on the road, for example, a crew member volunteered to shave his beard if the run collected $2,000 over the next seven days. Upon the deadline, the Web site acknowledged “only about $600 came in” and hasn’t reported its day-to-day earnings since.

As for expenses, the runner spent his own money for at least one recreational vehicle equipped with a kitchen, bathroom and bedroom yet often stayed with his four-man crew in hotels, his Web site reports. When costs for the first 660 miles ate up the original budget for the 3,200-mile trek, he decided to return home to “regroup.”

“The budget is exhausted – I’ve spent over $500,000 since the start of the run,” Knudson wrote this month on his Web site, “all of which came from my own bank account.”

‘Completely legal’?

The Internet marketer, now nursing a bruised heel, is vowing to raise more expense money so he can return to the road.

“My marketing staff and I,” he recently wrote on his Web site, “plan to get $1,000,000 into a separate RunTellmanRun bank account before we head back out again. … (note: this is money I am raising through my company, NOT through donations to RunTellmanRun).”

Contributors, however, may have questions. People who clicked runtellmanrun.com’s “Donate Now Online!” button last week saw a request for their credit card number, expiration date and three-digit security code just above the statement “Tellman.org is a registered 501(c)3 nonprofit corporation – your donations are tax-deductible.”

But neither IRS officials nor the www.irs.gov “Search for Charities” link reports any record of Tellman.org as a registered charity.

Knudson, in a phone interview, said that’s because his organization took over the nonprofit status of The Children’s Horizon Foundation of Texas, started by a businessman named Richard Sapio.

“I said, ‘How can I get a nonprofit set up and going before the run started?'” Knudson recounted. “He said he already had a completely legal nonprofit set up and didn’t do anything with it.”

Knudson said he would provide a copy of the IRS transfer papers. Instead, this newspaper received a call the next day from his lawyer, Mary Parent, an associate with Downs Rachlin Martin in St. Johnsbury.

“It’s a little bit different than the normal route,” Parent said of the transfer, “but Tellman was just looking for a way to get a nonprofit vehicle in place in time for him to do the run.”

Parent said the Texas and Vermont organizations merged because each “had a similar core mission/vision … helping youth.” The lawyer said her client was planning to notify the IRS about the change when the nonprofit files a Form 990 annual report due May 15.

“It’s totally transparent, and everything was done above board and in compliance with the law,” Parent said. “Tellman.org is the same organization as The Children’s Horizon Foundation. The Children’s Horizon Foundation has simply changed its name and state of organization. There’s no requirement for the IRS to sign off on this – as long as the purpose is aligned, that’s fine.”

The IRS disagrees. It confirms the tax-exempt status of The Children’s Horizon Foundation, with headquarters listed in Dallas. But while it wouldn’t specifically address Tellman.org because of privacy and disclosure laws, it said organizations couldn’t decide for themselves how to transfer official nonprofit approval.

“Recognition of tax-exempt status is given to a particular organization,” IRS spokeswoman Peggy Riley said. “Even in cases where the same organization reorganizes in a different state – they have to come in for a new determination because they are a different legal organization.”

‘Can’t comment’

According to the government transparency Web site watchdog.net, the latest report on file about the nonprofit formed as The Children’s Horizon Foundation lists its head as Richard Sapio of Dallas. According to U.S. Department of Justice records, a Richard A. Sapio of Dallas was accused in 2003 of securities-related fraud and in 2004 of conspiracy to commit securities fraud, wire fraud and mail fraud – although the government dropped its pursuit of the charges in 2008.

Knudson’s lawyer, asked about Sapio’s connections to the current nonprofit, said in a statement: “Richard Sapio is no longer involved with Tellman.org. He is no longer an officer, nor a director, and is not involved in any informal manner. … When the Form 990 is filed, the terms of the merger will be disclosed, as well as the name change from The Children’s Horizon Foundation and the current officers and directors of the entity.”

Elliot Burg, a state assistant attorney general who deals with charities, said when asked for a response: “The Vermont attorney general’s office does not comment on the existence or details of ongoing investigations.”

Knudson, however, is familiar to the attorney general’s Consumer Assistance Program. Last summer, it questioned claims made on his business Web site, www.overcomeeverything.com – specifically, an offer for a free “Instant Money Button” compact disc “guaranteed to stuff six-figures into your bank account in the next year.”

To receive the otherwise unidentified product, people were told they needed only to type in their credit-card number to cover a $7.95 shipping fee. But if they read the fine print – tiny and in the lightest of grays at the bottom of the white screen – they found a disclaimer that said “there is no guarantee that you will earn any money” and, in fact, the “CD purchase automatically renews to a recurring charge of $97 a month.”

Knudson’s business removed the “Instant Money Button” offer from its Web site days after this newspaper reported how the attorney general’s office was questioning whether the sales pitch violated the state’s Consumer Fraud Act, which “makes it unlawful to engage in unfair or deceptive acts or practices.”

‘On a mission’

Knudson boarded a New York City-bound Amtrak train last Sept. 5 so he could appear the next day on WABC-TV’s “Eyewitness News Sunday Morning” show.

“Tellman Knudson is on a mission and he hopes to accomplish it in his bare feet!” the host exclaimed at 9:15 a.m., according to a video on the station’s Web site.

One viewer was Rick Remington, who had been a fellow passenger on Knudson’s train and says he saw and heard the runner talking on a cell phone.

Remington would write Sept. 6 on the WABC-TV Web site: “And run he should. As broadcast in his loud cell phone conversation Saturday aboard Amtrak’s Vermonter, he was subpoenaed Friday for copies of his company’s sales solicitation but doesn’t want employees to know.”

Remington, a former reporter with New Jersey’s The Star-Ledger, phoned this newspaper shortly after to confirm his online post.

“He was having trouble with some account, had called customer service and then carefully spelled out his name,” Remington recalled. “After that, he had conversations, apparently with colleagues, about legal issues.”

Remington, then a spokesman for New Jersey’s Rutgers University, now is a private communications consultant.

“Irony, I used to work at Amtrak,” he said, “where I helped pioneer the start of cell phone-free ‘quiet cars.'”

The attorney general’s office said last week it had resolved five complaints from Knudson’s customers saying they either didn’t know about the $97 “Instant Money Button” charge until they saw it on their credit card bills or had read how they could cancel “for a full 7 days” and “you won’t be charged a single penny,” only to face difficulty contacting the company – a delay that added to their monthly fees.

The state reports no outstanding complaints against Knudson’s business.

Contacted at his Brattleboro home Tuesday, Knudson reacted angrily to a reporter’s questions.

“I would like to know why you are aggressively attacking me,” he said. “It would be really cool if you would not tear down, rip apart and destroy all of the stuff that I have been working on.”

‘Celebrity to help’

Asked for the run’s fundraising total, Knudson replied: “I don’t know the number off the top of my head. I am an entrepreneur. I do not keep track of my books. I do things for the world.”

Asked if he regretted spending $500,000 on road expenses rather than donating it to homeless teens, he replied: “A half a million won’t make a difference – it won’t save a whole lot of dying kids.”

He then reiterated his goal of returning to the road to raise $100 million.

Knudson had publicized a trip this weekend to London, noting on his Web site, “I’ve been invited to speak as an Internet marketing ‘guru.'” But sometime after hearing the reporter’s questions and replying he didn’t know his fundraising total, he cancelled his flight.

“We’ve got some very, very exciting news to announce,” he went on to report online.

On Friday, Knudson revealed he was giving the Stepping Stone youth shelter in State College, Pa., the $10,000 he promised when he visited there Oct. 7.

A news release reported last fall: “Tellman Knudson announced that the next $10,000 he raises on his barefoot run across America will pay for an upgrade of the worn kitchen that surrounded him.”

Almost four months later, he just posted a YouTube video on his Web site that pictures him writing the check.

“We just got our checkbook in for Tellman.org, our 501(c)3 registered nonprofit in the state of Vermont,” Knudson says on camera, stressing the last half of the sentence. “We’re really happy that we’ve hit that $10,000 mark. This is the first big check we’ve written out.”

The runner has hired a publicity team to encourage newspapers and radio and TV stations to play up, in its words, “an Internet-marketing millionaire who overcame great odds as a teenager to become an ultra-runner.”

“West Virginia’s most gorgeous woman will run alongside a bearded barefoot man through Parkersburg on Thursday,” one news release reported in December. “When Erica Goldsmith, Miss West Virginia USA, heard through a trainer at her gym that Tellman Knudson was running barefoot across America for his RunTellmanRun charity, she immediately offered her celebrity to help raise awareness.”

Knudson flew this month to Park City, Utah, for a marketing conference but soon made his way to its annual Sundance Film Festival, according to his Web site.

“We met all sorts of awesome and famous people, including LeVar Burton of ‘Reading Rainbow,’ ‘Roots’ and ‘Star Trek’ fame,” he wrote in a blog entry next to a snapshot of the actor. “After meeting some movers and shakers, I’ve got some opportunities to work with everyone from infomercial mavens to heavy metal bands to help publicize RunTellmanRun.”

In the meantime, Knudson is trying to raise $6,000 so he can produce a documentary about his run. (Anyone who contributes $2,000 toward the film will receive “a VIP invite to the post-run party in Santa Monica,” he promises on his Web site.)

Back in Brattleboro, some residents are pointing out a final irony: As Knudson was out of town racking up a half-million dollars in expenses in hopes of helping the homeless, the local First Baptist Church was making national news for proposing the sale of its Tiffany stained glass window – in hopes of helping the homeless.



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