California Attorney General Jerry Brown has filed a lawsuit aimed at shutting down a nonprofit Monterey County AIDS group and recovering up to $2.8 million that its directors and officers allegedly misspent or misappropriated.
The lawsuit against the Seaside-based Monterey County AIDS Project and 16 former directors and officers was filed Friday in Monterey County Superior Court.
The lawsuit alleges that up to $2.8 million of the project’s funds was “misappropriated, misapplied or wasted.” It alleges that some of the funds were used to pay personal expenses of the directors and officers.
The project was founded in 1985 to provide support and services to HIV/AIDS patients in Seaside, north of the city of Monterey, according to Brown.
In 1999, the project received a bequest from Monterey County resident Douglas Marsden of $1.8 million in cash and property that was to be used solely for the purpose of housing AIDS patients.
The lawsuit alleges that the money was not properly accounted for, that at least part of it was not used for housing purposes, and that it is now gone.
In addition, the lawsuit charges, the officers and directors “misappropriated, misapplied or wasted” another $1 million in grants and donations. By 2007, the project had only $205,000 left in assets, according to Brown.
The lawsuit asks the court to require a complete accounting of the project’s spending, to order the recovery of any funds that were illegally diverted, and to prohibit the directors and officers from serving on any other charitable group.
A phone call to the project’s former telephone number in Seaside was answered by Katie Murphy, the director of development for a new group called Central Coast HIV/AIDS Services.
Murphy said the Monterey County AIDS Project is in the process of being dissolved and that the new organization currently has no relation to that project.
A news release on the new group’s website says it was formed last year through a merger of the Monterey County AIDS Project and the Salinas-based John XXIII HIV/AIDS Services and now serves Monterey and San Benito counties.
Brown’s office is in charge of supervising charitable organizations in the state.
He said of the Monterey County AIDS Project today, “The duty of these officers and directors was to protect the charity’s assets so the funds could be used for the support of very sick people.
“Instead, they violated their trust and spent the money any way they wanted,” Brown alleged.