FBI is asked to join investigation of Vermillion and her former charity

By Joe Schoenmann

Thursday, Feb. 2, 2012 | 2 a.m.

The Nevada attorney general’s office has asked the FBI to assist in its investigation of the Nevada Partnership for Homeless Youth, whose founder was let go by the nonprofit group’s board last week.

Sources close to the charity said the FBI was asked to join, in part, because the charity receives grants from local and federal agencies. The FBI is also looking at the political activities of the charity’s founder, Kathleen Vermillion, while she sat on the Henderson City Council.

At the same time, the nonprofit organization has hired a forensic auditor to see if its spending was aligned with its mission.

The charity has fielded at least one request from a donor for details on how its donations were spent, sources said. The Engelstad Family Foundation, which gave $200,000 to the partnership for work on its drop-in center south of UNLV’s campus, is “politely” asking for an accounting of the donation, according to the sources.

In a January letter to the Nevada attorney general, partnership Executive Director Arash Ghafoori alleged that the Engelstad foundation’s money was not used for that purpose. Instead, he says it may have helped pay Vermillion’s salary. As COO of the Homeless Youth Foundation, she earned about $125,000 annually.

Ghafoori was named executive director in August 2011 after its previous director resigned.

He began questioning spending in December. And in January, Vermillion put him on paid administrative leave. Ghafoori then sent his letter to the attorney general and last week the partnership’s remaining board reinstated Ghafoori and ousted Vermillion.

In an interview Wednesday, Vermillion said during the partnership’s first three years of operation her salary was to be paid by the partnership. She was then to have the Homeless Youth Foundation, which was to become the partnership’s funding arm, running well enough not to need partnership money.

Those terms are not codified in the foundation’s bylaws, which Ghafoori sent to the attorney general’s office.

Vermillion said those terms are described in board meeting minutes.

Whatever the case may be, Ghafoori’s complaint to the attorney general alleges the partnership “has no business transferring hundreds of thousands of dollars to the Homeless Youth Foundation to pay Kathleen Vermillion a six-figure salary.”

Vermillion, meanwhile, said she welcomes an investigation and insists she has done nothing wrong.

“It’s about time,” she said of a potential investigation. “They should have hired a third party to go over the books or requested the attorney general’s office to go over the books six weeks ago.”

Another former donor asking questions is Vermillion’s ex-boyfriend, County Commissioner Steve Sisolak.

All of this comes on the heels of a lawsuit Vermillion filed against Sisolak and Clark County. Vermillion has alleged defamation and invasion of privacy, saying Sisolak and county employees revealed the results of a drug test. A few days later, Sisolak filed a police report alleging criminal extortion against Vermillion, her attorney Rob Martin, and Martin’s public relations adviser Mark Fierro. In a tape-recorded meeting, Sisolak said Martin and Fierro asked him for $3.9 million to make the lawsuit go away.

Over the course of their five-year romantic relationship, which ended in October, Sisolak said he donated about $250,000 to the charity, including $25,000 to seed the creation of an endowed fund to help the partnership’s clientele pay college expenses. Sisolak said the fund was to be called the “Steve Sisolak I Believe In You Scholarship.” He also said he was to receive reports about the fund, but never did.

(Vermillion contradicts Sisolak, saying he received emails with information about the fund.)

Three weeks ago, Sisolak learned about a request from Jobe Hernandez, 25, who had been homeless in Las Vegas as a teenager but was helped by the partnership.

Hernandez had called the partnership to see if they could help with college expenses. He is in Denver taking courses to become a civil engineer and is enrolled in ROTC. Sisolak said Hernandez was told the partnership had no money to help him.

Someone from the partnership called Sisolak and he wired $1,200 to Hernandez.

Sisolak “basically saved my life,” Hernandez said, adding that he also owes “a lot to the Partnership for Homeless Youth.”

Sisolak has asked for an accounting of how the $25,000 in scholarship money was spent and who on the partnership’s board authorized spending it. Vermillion said Hernandez did not qualify for funding, because he was older than 21; Sisolak countered that Hernandez received $3,000 last July.

“They do great work, but I would like to know how they’re spending the money,” Sisolak said.