Trading Standards chiefs have launched an investigation into Wounded Warriors Project UK and the Ministry of Defence has issued a warning to staff urging them not to get involved with the Church Street-based firm.

The MOD warning says: "The general view is there's too much risk associated with this group and we should not engage with or endorse them whatsoever."

It follows a number of complaints from disgruntled customers including Armed Forces veterans worried the cash is not going to heroes.

The company is owned by Blackpool businessman William Knight, who told The Gazette his firm Keystone Fundraising raised cash for wounded troops by selling raffle tickets to win prizes and collecting cash.

But Coun Peter Callow, leader of Blackpool Council, said: "I can confirm Trading Standards officers are investigating Wounded Warrior Project UK Ltd following complaints from members of the public. This company is not a registered charity and I wouldn't want anyone in Blackpool or elsewhere in the country to think it is.

"It would be scandalous if the money they have raised didn't end up going to the official charities that help heroes."

Coun Callow added: "Before making a donation, people should check they are happy with where the money is actually going."

Mr Knight said that while 100 per cent of the money raised by Keystone Fundraising from collection buckets goes to Wounded Warriors, overheads were taken from the sale of raffle tickets, with only a portion of the money going to Wounded Warriors.

Although it has only just been formed, Mr Knight said he planned to give funds raised by Wounded Warriors to individual soldiers in need, without the red tape which binds charities.

Neither of the businesses are registered with the Charity Commission and do not have to comply with the conditions of charitable status.

Mr Knight said £10,000 had been given to the charity Help For Heroes after a raffle for a Mini car was won by a woman in Leeds, which he said was proof his company follows up on its promises.

The company sells tickets for raffles with expensive prizes, promising to donate a percentage of the money raised to wounded soldiers.

Mr Knight said he had never claimed to be running a charity – and any staff that did would be sacked immediately.

He added: "We're primarily a business. To run that business costs money.

"We put on events. At those events we have to eat, we have to provide accommodation for our staff, we have to buy the cars which we raffle off.

"All of this costs money and on top of that I have a family to feed.
"Behind every major charity is a business which provides the running costs for that charity.

"We employ a lot of people in this town and are just trying to help out where we can."

Forces insiders have said they have no association with the firm and one officer raised his concerns.

A British Army spokesman told The Gazette: "The armed forces support charities which link into Confederation of British Service and
Ex-Service Organisations. Wounded Warriors is, by its own admittance, not a charity."

RAF officer Captain Bryn Wayt added: "I have emailed my MP about this, as I am truly concerned about the matter.

"I would hate to think people's money was being prostituted and not used for our real heroes."