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.

The Ponist Law Group’s (PLG) clients had purchased a new, high-end home for $3.1 million several years back. The home was supposed to be their dream home but, instead, it turned out to be a nightmare. Shortly after the close of escrow, our clients discovered significant construction defects.

PLG filed suit on behalf of our clients against the developer-sellers as well as the real agent and brokerage company. The lawsuit alleged, among other things, negligence, fraud, misrepresentation and unjust enrichment and sought rescission, punitive damages and other consequential damages.

During the litigation, the defendants sought to stonewall discovery efforts. Their actions were not well-taken and PLG obtained orders compelling discovery as well as major issue and evidentiary sanctions against them, effectively establishing liability against the defendants. Based thereon, PLG obtained summary adjudication and established grounds for punitive damages.

As a result, PLG was able to obtain a settlement on behalf of our clients for rescission and $8.85 million.

The Ponist Law Group (“PLG”) represented clients wrongly accused of failing to pay back a purchase money loan and of fraud in connection therewith.  Attacking the merits of the action, PLG moved for dismissal (judgment on the pleadings).  Based on the strength of PLG’s moving papers, the other side dismissed the action and agreed to a full release of all claims against our clients.  The great result—i.e., a complete dismissal of the action early in the proceedings—saved our clients significant time, expense and aggravation of protracted litigation.