D.C. AG sues Peaceoholics over false grants application, SUV purchase

The District’s attorney general filed a lawsuit Friday against a controversial city nonprofit organization that played a key role in the 2010 mayoral election, claiming the group’s leaders won city grants based on false tax returns and used other city funds to purchase high-end SUVs.

The complaint against Peaceoholics and its co-founders, Jauhar Abraham and Ronald L. Moten, seeks damages and restitution of more than $720,000 under the District’s False Claims Act, plus forfeiture of the vehicles.

Attorney General Irvin B. Nathan said the suit resulted from an investigation into groups supported by the city-funded Children and Youth Investment Trust Corp. “All entities that receive money from the District treasury must be on notice that we demand integrity in the expenditure of public money,” Nathan said in a statement.

The suit claims that Peaceoholics obtained grants worth nearly $180,000 in 2009 and 2010 from the trust after submitting a grant application that included a 2006 federal nonprofit tax return. That tax document, the lawsuit says, contained false income information for Abraham and Moten.

Abraham is listed as receiving $66,652 that year, but the lawsuit claims he was paid more than $158,000. Moten was listed as receiving $63,414; authorities say he got $98,381.

“Had the Trust known that the [return] submitted by Peaceoholics underreported the organization’s total payments to Abraham and Moten in 2006 by at least $126,000,” the lawsuit says, it would not have awarded it grants.

The litigation has rekindled old conflicts between Mayor Vincent C. Gray (D) and the Peaceoholics officials, who were outspoken supporters of his predecessor, Adrian M. Fenty (D), and have accused the Gray administration of acting vindictively against them.

“He’s got a personal vendetta against me,” said Moten, the group’s former chief operating officer.

A mayoral spokesman, Pedro Ribeiro, said that the decision to pursue a lawsuit rested solely with Nathan and that Gray did not play a role in the investigation.

Abraham challenged the basis for the suit’s claim, saying the city did not engage an independent auditor to examine the group’s records. He noted that a 2011 report by the Office of the D.C. Auditor said that the group lacked “appropriate internal controls” but found no evidence of wrongdoing.

“There could be some errors” in the tax return, Moten acknowledged. “I’ve never stolen any money, and I’ve never done anything intentionally wrong.”

The suit also claims Peaceoholics used $22,500 in city grant funds in 2007 to secure a loan allowing it to purchase two 2004 GMC Yukon XL Denali SUVs, then used more than $81,000 in city funds to pay off the loan.

Abraham and Moten said the vehicles transported youths in connection with Peaceoholics programs. “We wanted something durable, something that could be driven through the snow,” Moten said.

The lawsuit claims Abraham “titled them in his own name, and obtained insurance for himself as the primary driver of the SUVs.”

Abraham said it was “ridiculous” to suggest the vehicles were for his personal use. If they were, he said, “I would buy myself a black and a white or a blue and a red one. I wouldn’t have gotten two of the same color.”

Between 2005 and 2011, Peaceoholics received $8.7 million in city funds, mainly to intervene in gang disputes and perform outreach to youth. In recent years, its funding has dwindled and its activities have gone dormant.

In a separate action Friday, the city alleged that an unrelated nonprofit group — the Washington East of the River Academy of Entrepreneurship, Arts, Life Skills, Technology and Health for Youth on the Rise — overpaid its executive director and accountant using funds from the D.C. Council.

While a budget submitted to the children and youth trust proposed paying no employee more than $50,400, the suit said Executive Director Dianna R. Robinson was paid more than $140,000. The suit also says the group exceeded its stated accounting budget of $24,000 by paying more than $65,000 to an Alexandria firm owned by Darrell Johnson, a co-founder of the group.

Johnson declined to comment. Robinson could not be reached to comment.

The District is seeking more than $1 million in damages.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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