Casa Ruby's bank accounts were frozen Wednesday by a temporary restraining order issued by a judge in support of the attorney general of D.C. Recently, the LGBTQ+ organization has been accused of mismanaging public funds.
D.C. Attorney General Karl Racine had sought a temporary restraining order against Casa Ruby to prevent its founder, Ruby Corado, from withdrawing or transferring funds in all accounts under the nonprofit's name.
Corado is the only person authorized to access Casa Ruby's bank or PayPal accounts, despite resigning as executive director last fall, according to court documents.
"Casa Ruby's operations suggest clear patterns of gross mismanagement and poor oversight of its programs and finances," Racine said in a statement to The Advocate.
"Instead of fulfilling its important mission of providing transitional housing and support to LGBTQ+ youth, Casa Ruby diverted hundreds of thousands of dollars in District grants and charitable donations from their intended purpose."
He also said Corado appears to have fled the country, withdrawn at least tens of thousands of dollars from the nonprofit, and failed to pay employees and vendors.
"Upon hearing of the suspicious circumstances surrounding its collapse, our office immediately began investigating and is using our broad authority over District nonprofits to safeguard the organization's assets and hold its leadership accountable," Racine said.
The Office of the Attorney General is investigating the nonprofit following a Washington Post report, which revealed allegations that Corado hadn't paid employees, landlords, and vendors. The organization's website says Casa Ruby's DuPont Circle location is still open, and no announcement has been made on social media about its closure. Clients and staff, however, found the experience of being closed without warning to be traumatizing.
Under Corado's leadership, the OAG alleges, Casa Ruby diverted nonprofit funds from its stated purpose in violation of D.C. law.
Between 2012 and 2020, Casa Ruby received over $9.6 million in local government grants, but the board of directors, which is expected to provide oversight, did not meet or document any actions. This means that Corado acted for years without board supervision. Although board members met from late 2020 to mid-2021, they did not provide meaningful administration.
"Thus, for more than a decade, the Board ceded full operational and financial control of the organization to a single officer and utterly failed to fulfill its duty of appropriate oversight," OAG court documents say. "Since March 2022, Casa Ruby has been unable to produce to the District documentation, including a current board or organizational chart, required to continue to receive grant money."
In the meantime, Corado has withdrawn tens of thousands of dollars from Casa Ruby's bank accounts, including $60,000 for personal expenses in El Salvador, where Corado was born.
Corado used a PayPal account in Casa Ruby's name that accepts public donations to withdraw at least $604 even after the Post article was published July 19, DCist reports.
Recently, questions have been raised about where Corado's funds went, but she has denied wrongdoing. She was hailed for years as a hero for an underserved community.
"I'm not a criminal," she told Washington, D.C.'s Telemundo station WZDC. "I don't commit financial crimes."
During an interview with WZDC from El Salvador, Corado denied any misconduct and said the D.C. government owes Casa Ruby money.
"They engaged in financial strangulation to the point that today, the D.C. government has not paid more than $500,000 to Casa Ruby," she said.
"All of these funds that were both donated and granted, we don't know where they are," Deputy Attorney General Kate Konopka told Washington, D.C.'s NBC station, WRC. "We don't know what's happening to them; we don't know how they've been spent."
According to Corado, the allegations are false.
"No, I did not take any money," she said.
Corado says the D.C. government is targeting her because she criticized Mayor Muriel Bowser's administration and filed a discrimination complaint against the Department of Human Services.
"Because they couldn't deal with a transgender Latina having a platform in the nation's capital and making a decent living," she said.
A DHS spokesperson issued a statement to WRC saying, "The Department of Human Services is committed to caring for our residents and offering services that are safe, accessible, and inclusive. We don't publicly comment on the performance of our grantees. We perform due diligence, as a matter of regular practice to ensure fidelity of public funds and administration of quality services."
A longtime D.C. businessman and owner of LGBTQ+ bars Pitchers and ALOHO, Dave Perruzza, has personally supported Casa Ruby financially over time and says he's disappointed.
"I want answers as much as everyone else," Perruzza told The Advocate. Casa Ruby really helped out a lot of people. I considered Ruby a friend, and I'm also the type of guy that thinks everyone is innocent until proven guilty."
But he added, "I wanna believe she didn't do everything that she's being accused of, but from what I'm hearing, it all might be true."
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