California Lawsuit Alleges that Sacramento Charity Misused Money
In July, California Attorney General Xavier Becerra filed a lawsuit against a Sacramento nonprofit called Move America Forward alleging that the organization misled donors and its directors misused charity money for political purposes. According to Move America Forward website, it has sent over 388 tons of packages to troops “directly from American citizens affirming their support and providing some comforts from home.” The lawsuit alleges that the organization violated Internal Revenue Service (IRS) regulations because Sal Russo and Shawn Callahan, the nonprofit’s directors, managed separate for-profit groups that “charged fees for services” provided to the nonprofit. Becerra stated the following at a press conference in July,
There are legitimate charities out there that are helping our veterans, our friends, our neighbors. We will go after those that try to do it the wrong way. The bottom line is this: our troops deserve respect and generous Californians deserve transparency.
According to the lawsuit, the organization, which has been in business since 2004, does operate a “valid program.” However, up to 10 percent of the donations to the organization were allegedly used to finance Russo’s for-profit interests. The lawsuit alleges that Russo diverted over $1.8 million to his for-profit companies. The California Attorney’s office is also alleging that the organization provided free office space for two political action committees called Move America Forward PAC and the Tea Party Express. Another allegation is that the charity assets were used to support candidates endorsed by the committees. We will have to wait and see what the results are for this case.