The Washington PostDemocracy Dies in Darkness

Casa Ruby receiver sues board over lax oversight

The court-appointed receiver for the troubled LGBTQ nonprofit alleges in the lawsuit that poor oversight allowed the founder to embezzle hundreds of thousands of dollars

Fabiola Caal Choc, right, of Guatemala arrives at Casa Ruby, a bilingual LGBTQ organization and shelter in D.C., on Feb. 19, 2019. She is greeted by Ruby Corado, left, founder of Casa Ruby. (Sarah L. Voisin/The Washington Post)
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The Casa Ruby board of directors failed to provide oversight for the embattled LGBTQ nonprofit, a complaint filed in D.C. Superior Court alleges. The board never met and did not keep records, the complaint says, a failure that allowed Casa Ruby founder Ruby Corado to embezzle more than $800,000, increase her own salary and open an office in El Salvador — all without board approval.

The complaint, filed on behalf of Casa Ruby in late December by the Wanda Alston Foundation, the court-appointed receiver of the nonprofit, is the latest turn in a case that began last summer when the D.C. Attorney General’s office asked the court to freeze Casa Ruby’s bank accounts and prevent Corado from making further withdrawals.

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As part of the attorney general’s request, the court appointed the Wanda Alston Foundation to act as receiver for Casa Ruby.

In November, the attorney general’s office filed an amended complaint that alleged Corado ​​diverted hundreds of thousands dollars meant for the group’s indigent clients to her personal bank accounts. The amended complaint also alleges that Casa Ruby violated District laws by paying workers less than the minimum wage and by not paying workers all of the wages they earned.

The new complaint says Corado used the organization’s debit and credit cards for her personal living expenses, and she issued another credit card to board member Consuella Lopez so that she could do the same.

Casa Ruby founder allegedly diverted funds to herself, violated wage laws

None of the eight board members named in the complaint could be immediately reached for comment.

Between 2016 and 2022, Casa Ruby received $9.6 million in grants from city agencies to serve the needs of the District’s Latino and LGBTQ youth communities. The nonprofit reported more than $4.1 million in grants and other revenue on its most recent federal tax filings, which showed that Corado earned $260,000. But employees told The Washington Post last year they had gone without pay, and multiple landlords alleged the same.

Corado, the receiver and the attorney general’s office met virtually Friday for a status hearing in the case, and Corado said the accusations were unfounded. District employees monitored her grants, payroll and other expenses, she said.

“We were under strict supervision and contracts that were reimbursable, which meant that we paid out the money to the providers,” Corado said. “And when it was time to receive the money back from the government, they checked, so I’m trying to understand the comment that we did not pay minimum wage when it was supervised 100% by the grantors.”

The sides will meet in court again mid-March.