CBS4 Investigation: Some Colorado Pet Rescues Bring In Tens Of Millions Of Dollars In Revenue Trafficking Puppies

(CBS4) - Fifteen years after rabies was eliminated in the U.S., it has now resurfaced in many states including Colorado, where some rescues have become multi-million dollar puppy retailers that appear more concerned about selling dogs than saving them.

Last year alone, rescues and shelters in Colorado imported nearly 37,000 dogs, most of them puppies that sell for $500 on average.

While Colorado is one of the few states to regulate rescues -- making sure kennels are sanitized and treatment records up to date -- dog imports are largely unregulated and state regulators say it has led to disease outbreaks like the one at New Hope Rescue in Colorado Springs.

Animal Control officers raided the rescue in September. They say several dogs were in the advanced stages of distemper. Five were euthanized including Billy, who began having seizures shortly after Shelby Elliot brought him home.

"They told me he'd been checked by a veterinarian and he was perfectly healthy," said Elliot.

Investigators say the rescue's owner Joann Roof -- who had no comment -- imported dogs from a New Mexico shelter where she knew there was a distemper outbreak.

"You're not rescuing these dogs, you're abusing them and neglecting them," says Elliot.

Nick Fisher, who is in charge of regulating pet care facilities in Colorado, says more dog imports have meant more disease outbreaks.

"We are starting to see some serious stuff," Fisher said.

In one case, he says, a rescue dog exposed 25 people to rabies.

Fisher says the rescue industry has changed "to more of a business model where animals are being imported into the state from shelters outside of Colorado."

He says the puppies come not only come from pet overpopulated states like Texas but pet-friendly states like California and provide rescues here with a puppy pipeline that's largely unregulated.

RELATED: Puppy Importing Leading To Disease Outbreaks In Colorado

Elizabeth Coalson, with National Canine Advocacy Group, says rescues benefit from what she calls the halo effect.

"They are pet stores without the stigma," said Coalson.

She has tax filings that she says back it up. A forensic accountant, she analyzed the tax returns of Colorado's 15 largest rescue organizations and found between 2017 and 2019 the nonprofits reported more than $24 million in revenue. Nearly a third of it, she says, went to salaries and benefits, which is almost double what they spent on vet services.

She says one even reported buying dogs, "I was most surprised by the volume."

She says the 15 rescues took in nearly 70,000 dogs over the 3 year period. 80% of them, she says, were imported from out-of-state and 70% of them were puppies. Some were sold right off transport vans. CBS4 went to adoption events where they were priced $600-$700 each, even more if you want a rabies shot and spaying and neutering, which rescues are required to do by law.

"There's at least one rescue who you have to pay them to return your dog," said Coalson.

She says some rescues operate more like retailers, building inventory by what she calls "puppy bundling" -- they agree to take a few older dogs, she says, in exchange for more puppies, "And the adult dogs very often end up in boarding."

One of the rescues, she says, spent nearly $440,000 on boarding.

Fisher says some dogs are kenneled so long they literally go crazy, "We don't have any regulation against that." He's considering new rules that would require larger enclosures and exercise.

Coalson says what the dogs need is to be rescued not warehoused by organizations calling themselves rescues, "The animals suffer in all of this and so do the consumers."

Shelby Elliot says it's time state lawmakers took notice and took action,"No dog should go through this. No family should go through this."

More regulations, she says, are needed to save the next dog like Billy, "I'm just glad that at least he had some kind of home and some kind of love."

State lawmakers have demanded more accountability for pet stores but have treated rescues differently. Fisher is considering changes through rule-making including requiring any imported dog to undergo a thorough exam by an in-state veterinarian before it's sold. Rescues and shelters account for 70% of all dogs sold in Colorado and while the state is widely considered a model for pet care regulation, it has just 8 people to police 2,300 pet care facilities.