Less than a month after Kathleen Vermillion resigned from the Henderson City Council to spend more time with her charity, the Nevada Partnership for Homeless Youth, the organization is in turmoil.
Since late December, seven board members have resigned amid allegations that Vermillion, the partnership's chief operating officer, has misappropriated funds. Last week, the interim executive director, whom Vermillion has placed on paid administrative leave, filed a complaint against Vermillion and her charity with the Nevada attorney general's office.
"I care very deeply for the Nevada Partnership for Homeless Youth," the interim executive director, Arash Ghafoori, wrote in the complaint. "I believe its mission to assist homeless youth in the State of Nevada will be jeopardized if Ms. Vermillion is permitted to remain in de facto control of the NPHY. Accordingly, I am requesting an investigation and appropriate action by the office of the attorney general."
Jennifer Lopez, a spokeswoman for the attorney general's office, confirmed that a complaint was received on Jan. 11 against the Nevada Partnership for Homeless Youth.
"We can't comment on whether or not we are conducting an investigation, and that's standard office policy," Lopez said Wednesday.
Although she would not release the complaint the agency has received, the Las Vegas Review-Journal has obtained a copy of the complaint filed by Ghafoori.
VERMILLION WELCOMES INVESTIGATION
"I welcome an investigation by the attorney general's office," Vermillion said Thursday. "The allegations brought against me are fake, and I don't appreciate the libel and defamation taking place."
Vermillion, who said she had not seen the complaint, said the organization's financial records are an open book.
"I am willing to subject my organization to any type of auditing," Vermillion said. "I have all the confidence in the world that when everything settles, we will see the truth for what it is."
Ghafoori's complaint alleges Vermillion has misappropriated funds of the organization and of the city of Henderson. It also claims restricted donations to the charity have not been used for their intended purpose.
According to Ghafoori's complaint, he became executive director of the Nevada Partnership for Homeless Youth on Aug. 29, three days after his predecessor, Tim Mullin, "abruptly resigned."
"I have subsequently learned that Mullin's resignation was related to some of the same activities by Kathleen Vermillion which form the basis for this complaint," Ghafoori wrote.
Mullin said he left the partnership for another job and declined to comment on any of the allegations against Vermillion or the organization.
Ghafoori and his attorney, Adam Levine, also declined to comment on the allegations.
"The complaint speaks for itself," Levine said.
According to the document, the charity's finances were the subject of discussion at both the Nov. 17 and the Dec. 19 board meetings.
TREASURER FIRST TO RESIGN
Treasurer Greg Esposito was the first board member to submit his resignation. He declined to comment for this story, but his Dec. 27 resignation email was included with Ghafoori's complaint to the attorney general's office.
According to the email, the charity "is going through a very difficult time" as it tries to re-establish its hierarchy.
"I also believe that the finances of NPHY have been called into question," Esposito wrote. "I have attempted to address some potential issues that I have been made aware of. Unfortunately it does not seem that enough corrective action has been taken to rectify what may be problems. I am most concerned with the allegations regarding inappropriate use of donations and grant money from multiple entities. I hope that any pending audits and investigations show that we have been operating responsibly."
He also cited "extreme personality conflicts" among officers, staff, board members and donors "that are destructive to personal and professional relationships."
"These personality conflicts are also damaging to NPHY's true mission of assisting homeless youth in Southern Nevada," Esposito wrote. "I cannot continue to serve the charity when I am consistently being placed in awkward positions that include threats of lawsuits, as well as FBI and DOJ investigations."
DOJ is a reference to the Department of Justice.
PRICEY HOTEL ACCOMMODATIONS
According to Ghafoori's complaint, Vermillion founded the Nevada Partnership for Homeless Youth and, later, the Homeless Youth Foundation, to help homeless youths in Nevada.
Vermillion is the chief operating officer of the Homeless Youth Foundation but has day-to-day control over the partnership's operations, including its finances, according to the document.
Ghafoori received a courtesy copy of a Nov. 2 email that was sent to Vermillion from Paradise Point Resort & Spa in San Diego and included it with his complaint. The email related to a $51,000 hotel bill for an annual trip for the partnership's staff, family and clients.
The bill included five nights in the resort's presidential suite for Vermillion's use at a cost of $28,000. The email indicated deposits already had been paid.
Although no purchase for $51,000 shows up on financial records Ghafoori submitted with his complaint, several smaller purchases at Paradise Point Resort do. Purchases on Oct. 31 totaled about $2,400, and a $2,000 purchase was made on Nov. 4.
Later in November, according to Ghafoori's complaint, he learned that Vermillion had transferred $110,000 in 2010 and $230,000 in 2011 from the partnership to the foundation. When questioned about the transfers at a Nov. 17 board meeting, Vermillion indicated they were made to pay her salary.
"The NPHY has no business transferring hundreds of thousands of dollars to HYF to pay Kathleen Vermillion a six-figure salary," Ghafoori wrote in his complaint.
Records show that Vermillion makes about $125,000 a year.
Ghafoori claims the transferred funds also "appear to be for personal expenses including ATM cash withdrawals, personal phone calls, personal travel expenses, and personal medical and/or therapy expenses."
Vermillion refused to address any of the specific allegations against her.
COUNCILWOMAN'S DISCRETIONARY FUNDS
Discretionary fund expenditure reports for fiscal 2010 through 2012 also show that Vermillion made multiple contributions, totaling $10,500, to the Nevada Partnership for Homeless Youth with city of Henderson money. The reports show that a $7,500 contribution was returned.
"There would be nothing wrong with such discretionary donations made by Kathleen Vermillion to the NPHY but for the fact that she then took NPHY money and transferred it to the HYF in order to pay her personal salary and personal expenses," Ghafoori wrote. "In essence, she misappropriated city of Henderson funds for her personal benefit and attempted to use the NPHY to 'launder' this money."
Bud Cranor, a spokesman with the city of Henderson, said each council member is allocated funds to use to benefit the community at their discretion.
Cranor said only council members could speak about how they used their particular funds.
Vermillion announced her resignation from the Henderson City Council in late November. It took effect Jan. 3.
An emotional Vermillion told the Las Vegas Review-Journal in November that she was stepping down to spend more time with her children and with the Nevada Partnership for Homeless Youth, which she founded in 2000.
Vermillion, who had been considering a run for the state Senate, said her 19-year-old son recently had been convicted of a misdemeanor drunken driving charge in Henderson and was undergoing treatment at a sober living facility.
She blamed her son's troubles partly on her council and charity jobs -- both of which require significant time away from home. She had served on the City Council for about 2½ years.
The following board members resigned in early January: Jennifer Simich, Ryder Donahue, Stephanie Sibley, Don Soderberg and Mike Sullivan. Neil Durrant, the board's general counsel, resigned most recently.
Vermillion said all the resignations she has seen imply they involved time commitments.
"And rightfully so because of the time constraints being added with these surfacing and specious allegations being brought against me," she said. "Most of the board members didn't have time to continue at the capacity needed to keep moving us forward as a board."
Donahue declined to comment on his resignation.
Soderberg declined to comment, other than to say his involvement with the organization was taking up a lot of time.
Durrant, Simich and Sibley did not respond to requests for comment.
Sullivan said he also had raised concerns about how the organization's money was being spent.
"I voiced a lot of my concerns before I resigned," he said. "I was told they were going to look into it."
Colin Seale, chairman of the board, echoed Vermillion's thoughts that most board members resigned on good terms but left because of added time commitments.
Seale also said the board already has retained accounting firm Layton Layton & Tobler to audit the charity's books.
"We are transparent and have nothing to hide," he said.
ASSISTING HOMELESS YOUTH
The Nevada Partnership for Homeless Youth provides shelter, clothing, food and assistance to homeless youth.
While the actual partnership handles the day-to-day operations, the Homeless Youth Foundation established an endowment to support the longevity of the organization. The partnership has an annual budget of about $1.3 million.
According to its website, the organization is funded primarily by private donations and corporate and foundation gifts. It lists Terrible Herbst Inc. as a supporter that has donated $500,000 or more. It lists MGM Mirage, the Celine Dion Foundation and Clark County Commissioner Steve Sisolak as supporters that have donated between $50,000 and $100,000.
The partnership's honorary board includes former Clark County Commissioner Rory Reid, political consultant Sig Rogich and U.S. Rep. Shelley Berkley, D-Nev.
According to a biography of Vermillion on the charity's website, she "understands the needs of the populations she advocates for, and often mentors young women who share similar life experiences."
"She was a runaway and couch surfer herself, and continues a personal advocacy for the clients that NPHY serves. She has a bachelor of science degree in business management, and is certified in non-profit management & public speaking."
Vermillion went by the name Kathleen Boutin when she was elected to the Henderson City Council in June 2009 at the age of 41. She has three children.
VERMILLION PLANS LAWSUIT
Although she wouldn't elaborate on the details, Vermillion said she plans to file a lawsuit today against Clark County over the release of her personal health information.
According to Ghafoori's complaint, both he and Vermillion "were ordered to report for drug testing" after he raised concerns about the charity's finances.
"My drug test came back negative," Ghafoori wrote. "I have been informed that Vermillion tested positive for methadone."
Methadone is a synthetic narcotic drug used to treat heroine and morphine addicts. It may also be used for chronic pain management.