The Office of the DC Attorney General on Monday filed an emergency motion in DC Superior Court alleging that Casa Ruby and its longtime executive director Ruby Corado have violated the city’s Nonprofit Corporations Act in connection with its financial dealings.
The court motion, among other things, calls on the court to approve a temporary restraining order freezing all of Casa Ruby’s bank accounts and PayPal accounts into which DC government funds and private donations have been deposited.
The motion also calls on the court to appoint a receiver or another court-supervised official on a provisional basis to help stabilize Casa Ruby’s management and governance “to maintain and control the funds of Casa Ruby.”
The motion states that the restraining order is needed to prevent “Defendant Ruby Corado from making any withdrawals from any of those accounts, removing Corado’s authorization to control any of those accounts, requiring Corado to keep any funds already withdrawn from those accounts in the United States .”
The motion further states, “This preliminary and emergency relief is needed to prevent the ongoing misuse of Casa Ruby’s charitable funds by Corado, who is the only individual authorized to access Casa Ruby’s accounts, despite purporting to resign from the organization in the Fall of 2021 .”
The preliminary relief is warranted, the court motion continues, “because the District is likely to prevail on the merits of its claims given Defendants’ diversion of funds away from their legitimate use by the organization to illegitimate uses.”
It says the illegitimate uses include “the personal benefit of Corado, leaving the organization unable to operate, including it being unable to pay rent on the transitional housing it is designated to provide vulnerable communities and it being unable to pay its employees and vendors for services rendered.”
The motion filed on Monday follows a separate complaint filed by the Attorney General’s office on July 29 against Casa Ruby and Corado in DC Superior Court alleging additional violations of the DC Nonprofit Corporations Act and common law.
Both the emergency motion for the restraining order and the complaint are the equivalent of a civil lawsuit filed against Casa Ruby and Corado by the DC government. They each allege that the Casa Ruby Board of Directors failed to provide required oversight over Corado’s action for as long as the past 10 years.
“In 2020, Casa Ruby reported its Board consisting of eight Directors,” the motion for the injunction says. “However, from 2012 until late 2020, the board apparently never met, and it generated no records or minutes to document any action,” the motion states. “Defendant Ruby Corado, then the executive director, acted without any Board oversight,” it says.
The court motion and complaint filed by the Attorney General’s office came a little over two weeks after Casa Ruby employees disclosed the organization had shut down all its programs and operations because it no longer had the funds to continue. The employees also reported that they had been unable to contact Corado in recent weeks after she had returned to El Salvador, where she has been spending most of her time for at least the past six months or longer.
The Blade couldn’t immediately reach Corado on Monday or two weeks ago at the time the employees disclosed Casa Ruby had shut down its operations.
NBC Washington reported on Monday that Corado told Telemundo 44 and News 4 Washington that she had never taken money from Casa Ruby that was not authorized by the board to do work in the community.
“Any money that was withdrawn was for work that was authorized, work that is still being done in the community today, and that was authorized by the board, this team of people, because I never did this work alone,” Telemundo quoted her as saying in an interview presumably from
Corado told the Blade in an interview earlier this year that she had started a Casa Ruby in El Salvador last year with the full approval of the Casa Ruby board. But the complaint and motion for the restraining order filed by the Attorney General’s office says no documentation could be found to show that the board ever approved the creation of a Casa Ruby in El Salvador or that Corado could divert tens of thousands of dollars from the Casa Ruby in DC to the El Salvador operation.
“Casa Ruby’s operations suggest clear patterns of gross mismanagement and poor oversight of its programs and finances,” said DC Attorney General Karl Racine in a statement released on Monday. “Instead of fulfilling its important mission of providing transitional housing and support to LGBTQ+ youth, Casa Ruby diverted hundreds of thousands of dollars of District grants and charitable donations from their intended purpose,” Racine said.
“Their Executive Director appears to have fled the country, withdrawn at least tens of thousands of dollars of nonprofit funds, and has failed to pay employees and vendors money they are rightfully owned,” Racine says in his statement.
“Upon learning of the suspicious circumstances surrounding its collapse, our office immediately began investigating and is using our broad authority over District nonprofits to safeguard the organization’s assets and hold its leadership accountable,” Racine said.
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