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DC Attorney General Karl A. Racine is seeking a temporary restraining order against Casa Ruby to freeze the LGBTQ nonprofit’s financial accounts and prevent founder Ruby Corado from making further withdrawals, documents filed Monday in the DC Superior Court show.

Last month, a Washington Post report raised questions about possible financial mismanagement at the nonprofit. The report was based on interviews with former employees, court records, tax returns and thousands of emails sent and received by DC Department of Human Services officials obtained through a public records request.

Casa Ruby has grossed over $4.1 million in grants and other income on his latest federal tax returns, which showed Corado earned $260,000. But employees say they left without pay, and at least four landlords told city agencies that the nonprofit hadn’t paid rent on properties it rented across the city for its low-barrier shelters and its transitional housing programs.

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Corado did not respond to phone calls or emails from The Post, but she told a Telemundo reporter last week that she was in El Salvador and had done nothing wrong. Although Corado resigned as executive director last fall, employees told city officials and the Post that she retained sole control of the nonprofit’s bank accounts.

“Casa Ruby’s operations suggest clear patterns of gross mismanagement and poor oversight of its programs and finances,” Racine said in a statement. “Instead of fulfilling its important mission of providing transitional housing and support for LGBTQ+ youth, Casa Ruby has diverted hundreds of thousands of dollars in district grants and charitable donations from their purpose. Their executive director appears to have fled the country, withdrawn at least tens of thousands of dollars from nonprofit funds, and failed to pay employees and vendors money rightfully owed to them. Upon hearing of the suspicious circumstances surrounding its collapse, our office immediately began investigating and is using our broad authority over nonprofits in the district to protect the organization’s assets and hold its leaders accountable.

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Since 2016, Casa Ruby has received $9.6 million in grants from city agencies to meet the needs of the district’s Latino and LGBTQ+ youth communities. Last fall, the Department of Health and Human Services refused to renew an $839,460 grant to Casa Ruby to run a low-barrier shelter. The shelter, which at the time housed at least 10 young people, closed in September, but the association continued to run other programs, including one for victims of crime and another for asylum seekers. .

Although the nonprofit listed a board of directors on its federal tax returns, the AG’s office found that between 2012 and 2020 the board “apparently never met and ‘He did not generate any records or minutes to document any action’.

In addition to asking the court to freeze Casa Ruby’s accounts, the attorney general’s complaint asks the court to appoint a court-supervised official to stabilize and reform the association’s management, and calls for a “fair accounting of records.” for the association’s finances, “because they have had no meaningful oversight for years,” Racine said in his statement. Racine also asked the court to impose a trust or other remedy to regain control of any money Corado may have improperly obtained.

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According to the attorney general’s office, Corado’s control over the association’s finances was “almost absolute”. He said she was the only current signatory on the association’s bank accounts and had access to its PayPal account, which processes all donations made to Casa Ruby through its website. As recently as July 19, Corado made withdrawals of at least $604 from PayPal, the bureau found.

“Even employees with significant responsibilities in Casa Ruby’s business could not spend any of Casa Ruby’s funds without the express permission of Corado,” Racine’s office found.

The AG’s office also found that Corado used and continues to spend Casa Ruby’s money without the knowledge or involvement of other managers and without board oversight. He said that throughout 2021, Corado withdrew tens of thousands of dollars from Casa Ruby’s M&T Bank account, and she used more than $60,000 of Casa Ruby’s funds to pay bills for a credit card. payment that she controlled. The AG’s office discovered that Corado had used Casa Ruby funds to pay for meals and transportation expenses to and within El Salvador.

This story will be updated.

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