Vermillion criticizes audit, denies misusing charity’s funds

Standing on the courthouse steps Wednesday morning, Kathleen Vermillion again defended herself against allegations that she misused money from the charity she founded to help homeless youth.

She pointed to a voluntary lie detector test she took last week that proved, she said, that she had committed no wrongs. She also lashed out at an audit of the Homeless Youth Foundation that flagged several questionable financial transactions.

"I'm implicated in all of this at the end of the day, but I'm going to come back and fight back strong because I am tired. You know, enough is enough," the former Henderson city councilwoman said outside the Regional Justice Center.

The foundation was established in 2008 to raise money for the Nevada Partnership for Homeless Youth, a charity Vermillion helped found in 2000 to support homeless children.

At her news conference, Vermillion accused the partnership of violating child labor laws by forcing its clients to help with building renovations or risk losing support.

She also said her ex-boyfriend, Clark County Commissioner Steve Sisolak, was "coaching" the partnership's executive director, Arash Ghafoori, who first raised the allegations of financial improprieties in a complaint filed in January with the state attorney general's office.

Sisolak declined to comment on Vermillion's allegations.

"I think the facts speak for themselves, and the truth will come out," he said.

Vermillion also challenged Ghafoori to take a lie detector test as she had.

"We are not going to dignify these preposterous personal and potentially slanderous and libelous attacks other than to say that the accusations that she has decided to make today are patently false," partnership board Chairman John Simmons said in a statement.

"Instead, we are going to let the forensic third-party audit of the organization speak for itself. We purposefully engaged an outside-third party to ensure that people knew that the integrity of the organization and its financials were being upheld and it is saddening that this is the storyline surrounding such a worthwhile cause."

The partnership hired a forensic auditor amid questions about Vermillion's handling of finances at the foundation, which she had headed since its creation. She was fired from the partnership in January.

In his audit of three years of finances, Dennis Meservy singled out expenses for airline tickets, spa days and clothing as "personal like." Financial documents included with the audit showed the purchase of a car for a homeless client with a "scholarship" fund.

Meservy wrote that the transactions could be criminal.

The audit was given to Las Vegas police, the state attorney general's office and the FBI.

Vermillion said that she has financial documents and explanations for the transactions and that the auditor never contacted her or former foundation board members for them.

"I'm certainly going to stand by my integrity," she said. "I put my blood, sweat and tears into the partnership for the past 13 years. We have never had any financial improprieties."

The money went to help the homeless children for living expenses, including clothing, medications and travel, she said.

"We raise the money to take care of the kids, just like you would if you were living in a middle-income, middle-class household," she said. "And nobody can condemn that. And if they do, shame on them."

Vermillion has welcomed any law enforcement investigations and said she would ask the Internal Revenue Service to audit the foundation in hopes of clearing her name.

"I've been very quiet about this and focused on myself, and I'm healthier now and I'm stronger now. And I'm going to fight back if it takes my last breath out of me because I have had it. Enough is enough," she said.

Vermillion's life has unraveled in the past few months. She broke up with Sisolak in October after a rocky five-year relationship and resigned from the Henderson City Council in early January before finishing her first term.

Shortly after the allegations against her went public in January, she suffered what she called an accidental overdose of alcohol and anti-anxiety medication. She has sought treatment for her addiction and now can fight the allegations, she said.

In his statement, Simmons said the charity is not out to get Vermillion.

"Our goal and purpose as Board members of the NPHY is not to wage a personal vendetta against any one individual, but rather it is to support and to advocate on behalf of young men and women throughout Clark County that often have no place else to turn," he wrote.

"Our Board members are men and women within our community who volunteer their own time with absolutely no pay whatsoever, to do extraordinary things for the Foundation and it is unfortunate that this incident has tainted that work."

Contact reporter Brian Haynes at bhaynes@review journal.com or 702-383-0281.