Freedom Calls, a nonprofit organization that runs video conferencing between soldiers in Iraq and their families back home, will pay its founder $15,000 as part of a court settlement, closing a year-long lawsuit ripe with allegations of theft, cybersquatting, and unpatriotic speech.

Freedom Calls operates three telephone and video-conferencing centers in Iraq available free of charge to soldiers to communicate with home after a day in the field. The organization began in 2003, after a Brooklyn attorney, John Harlow III, learned that a Pennsylvanian businessman, Ed Bukstel, was soliciting companies for donations of telecommunications equipment to send to troops in Iraq. Its Web site is www.freedomcalls.org

Messrs. Bukstel and Harlow apparently did not get along well. By 2005, Mr. Bukstel had left the charity and set up a competing Web site at www.freedomcalls.us, which advertised a similar mission. What began as an ordinary trademark suit in U.S. District Court in Brooklyn took a turn the following month when Mr. Bukstel filed a countersuit in December, 2005.

Mr. Bukstel’s suit alleges that Mr. Harlow was “not liked by the soldiers in Iraq and he has offended military families and their loved ones.” Mr. Bukstel bases such claims on online conversations he has had with troops. He further accuses Mr. Harlow of sending an email to families of soldiers in the Oregon National Guard, claiming that “a leadership vacuum” exists in the unit.

The Army has worked closely with Freedom Calls in the past. It spent more than $30,000 to furnish a Freedom Calls center in Taji, Iraq and staffs the facility through a contract, according to court filings.

Mr. Bukstel’s also alleges that organization kept shoddy financial records. The treasurer of Freedom Calls, Mr. Bukstel claims, is Mr. Harlow’s roommate and never once conducted an accounting. Mr. Bukstel claims that Mr. Harlow has used the organization’s charitable contributions as a personal “piggy bank” and was not honest with contributors about which projects their money would fund.

A nonprofit disclosure form for Freedom Calls for the year 2003 indicates that the organization received $564,000 in contributions. Messrs. Bukstel and Harlow each received a salary of $4,000.

In a telephone interview Sunday, Mr. Harlow called Mr. Bukstel “a disgruntled former employee” who was “off the reservation,” but he declined to comment on the litigation. He cited a term in the settlement that requires both sides to not comment.

Mr. Bukstel did not return repeated phone calls left over the course of several days.

The settlement agreement calls for Freedom Calls, originally the plaintiff, to pay Mr. Bukstel $15,000. In return, Mr. Bukstel must drop his suit. The settlement forbids Mr. Bukstel from using the “Freedom Calls” trademark. The judge in the case, Sterling Johnson Jr. of U.S. District Court in Brooklyn, has not yet approved the settlement agreement, according to the court file.

A spokesman for Attorney General Spitzer did not return a call for comment. Paperwork about the nonprofit’s finances had been forwarded to Mr. Spitzer’s office for investigation, according to court documents.