This report originally appeared in the July 2010 issue of DOTmed Business News

California Attorney General Edmund G. Brown Jr. has filed a lawsuit to shut down the Monterrey County AIDS Project (MCAP), a charity created in 1985. Brown's lawsuit also looks to recover funds he says were intended to assist persons with HIV/AIDS, but were actually illegally diverted for personal use and other for-profit ventures in a scheme lasting nearly a decade.

Brown says the former officers and directors of MCAP diverted the money in violation of a state law and a previous bequest mandating certain funds be used to provide housing for people with HIV. He alleges at least $1 million in grants and donations were misspent as well, characterizing in a statement the organization's record-keeping "was so sloppy and incomplete it's hard to determine exactly where all the money went."
"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," Brown said. "Instead, they violated their trust and spent the money any way they wanted." This included a $1.8 million private bequest for the sole purpose of providing housing. From $2.8 million of charitable assets the AG says were misappropriated, misapplied or wasted, only $205,000 remained by 2007. The suit seeks to dissolve MCAP, obtain a complete accounting of its finances and recover any remaining assets.

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