Captain Tom Moore caught the British public's imagination during the Covid-19 lockdown when he took to raising nearly £33 million ($41.7 million) by walking up and down his garden using a walking frame.
Images of the stooped but dapper veteran with his military service medals pinned to his blazer lifted the nation's spirits as it struggled with a mounting death toll and fears about the future.
But in a 30-page report, the Charity Commission said there had been repeated instances of misconduct by Moore's daughter Hannah Ingram-Moore and her husband Colin.
It accused the couple of a misleading implication that they would make sizeable donations from a book deal to the charity.
An advance of around £1.4 million ($1.7 million) was paid to a company of which the Ingram-Moores were directors for a three-book deal, though none of the money went to the foundation, the commission said.
Moore raised the astonishing sum for UK health service charities by completing 100 lengths of his garden before his 100th birthday in April 2020.
Queen Elizabeth II knighted him, making him "Captain Sir Tom", and his death in February 2021 was marked by a nationwide round of applause with Prime Minister Boris Johnson taking part and MPs bowing their heads in parliament.
The commission opened a case into the foundation in 2021, shortly after Moore's death. It launched a formal probe in 2022.
Earlier this year, it also disqualified the Ingram-Moores from being charity trustees.
'Blurring' of interests
In a statement, the Ingram-Moore family rejected the commission's conclusions and said they had been treated "unfairly and unjustly".
They described the process as "excessive" and accused the watchdog of of having a "pre-determined agenda".
"We remain dedicated to upholding Captain Sir Tom's legacy and want the public to know that there has never been any misappropriation of funds."
David Holdsworth, commission chief executive, said the probe found "repeated instances of a blurring of boundaries between private and charitable interests".
He said this resulted in the couple "receiving significant personal benefit", adding that the failings amounted to "misconduct and/or mismanagement".
The report said it appeared that "Captain Tom himself believed or intended that (his book) 'Tomorrow Will Be A Good Day' would in some way financially support the charity".
"Astonishingly at my age, with the offer to write this memoir I have also been given the chance to raise even more money for the charitable foundation now established in my name," Captain Tom wrote in a prologue.
The report's authors said the inquiry could not see how Moore's words would be "interpreted as anything other" than that proceeds would "flow to the charity".
Literary agent Bev James, however, told the inquiry her understanding was that the Ingram-Moores were "very clear that they did not want the money from the books to go to charity" but that they would make a donation to the foundation.
The report concluded that "the public had a reasonable expectation that the Captain Tom books they purchased... would have financially benefited the charity and... would understandably feel misled given no donation has been made to the charity".
