After a three-year investigation, the California Attorney General’s Office filed a sweeping civil enforcement action against a nonprofit organization, its directors, and affiliated companies that supported the charity’s operations. The complaint alleged serious claims, including breach of fiduciary duty, self-dealing, diversion of charitable assets, and misrepresentation. The Attorney General sought more than $20 million in restitution, fines, and penalties, along with over $2 million in purportedly “mandatory” attorney’s fees.
Following five years of hard-fought litigation and a three-month trial, the Ponist Law Group secured a defense verdict on every substantive claim. The only issue on which the Attorney General prevailed involved record-keeping deficiencies.
The outcome was decisive. Instead of the more than $20 million sought, the court awarded just $14,000 in fines and penalties. Instead of over $2 million in attorney’s fees, the court awarded $35,800.
This result highlights what effective enforcement defense looks like when nonprofit organizations and their directors face aggressive investigations by the California Attorney General or other Government Prosecutors. Early assumptions of misconduct do not equal proof, and sweeping allegations often collapse when tested through rigorous litigation and trial.
The Ponist Law Group represents nonprofits, directors, officers, and affiliated entities in California Attorney General investigations, enforcement actions, and fiduciary duty litigation—protecting both charitable missions and the people who run them when the stakes are highest.
