Celebrated Fil-Am leader sued for fraud by nonprofit she founded
LOS ANGELES – A much-lauded Filipino community advocate has been sued by the national nonprofit she founded for allegedly leading a fraudulent conspiracy to enrich herself at the expense of the State of California.
The National Asian American Coalition (NAAC) sued its founder and former CEO, Faith Bautista, for alleged fraud, receiving stolen property, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, deceit, constructive fraud, negligent misrepresentation and conversion, BUSINESS WIRE reported.
Also named in the lawsuit were Josefina Bautista (NAAC’s former CFO), Bing Crosby Bautista (spouse of Josefina Bautista and is Faith Bautista’s brother), Nora Penaflor (NAAC’s former Director of Housing), Marissa Samaco (a former independent contractor to NAAC), and Floradema, LLC, which is a company owned by Faith Bautista.
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Faith Bautista allegedly caused NAAC to submit some 15,672 counseling sessions to the State of California’s National Mortgage Settlement (NMS) program, plus other expenses for reimbursement, resulting in the state’s payments to NAAC totaling $12,356,288. (NMS provides nonprofit Housing Counseling Agencies like NAAC $750 for every counseling session they conduct.)
However, the number of counseling sessions Bautista and her team submitted were impossible, the suit alleges. For example, a counseling session generally took at least one hour, but defendants’ records claim that one counselor conducted 35 counseling sessions in a day. Another counselor is credited with 45 counseling sessions in a day.
To make the scheme work, the Complaint alleges that the defendants used the names of California residents from unrelated caller and voting lists to submit fraudulent claims for reimbursement, including a “Filipino Under 50” list where defendants used nearly 200 names to support false submissions.
To make sure nobody actually contacted these people, the listed addresses and telephone numbers were changed. The complaint also alleges that defendants tricked more than 100 US Marines into signing intake forms as part of their effort to falsify and fraudulently document compensable counseling sessions to obtain counseling fees.
According to the lawsuit, “The defendants’ actions grossly violated their strict fiduciary duties owed to NAAC, and at a more basic level, violated the trust of the Asian American and other marginalized communities they were supposed to be serving. These communities needed and expected the long-delayed funds from the National Mortgage Settlement program to directly benefit their communities. Instead, substantial portions of the funds were spent to fuel defendants’ egos and quench their thirst for money.”
The lawsuit continues: “In embarking on this shameless conspiracy to defraud NAAC and the State of California, defendants profited handsomely at the expense of NAAC and ultimately at the expense of California’s taxpayers.”
NAAC says has sued its own founder and her co-conspirators “to force them to return every penny they selfishly siphoned from this charitable organization and to help NAAC resolve its repayment obligation to the State of California.”
The Board filed the lawsuit after a long investigation conducted by law the firm Sheppard, Mullin, Richter & Hampton LLP. The investigation allegedly uncovered substantial evidence of fraud and other wrongdoing.
The NAAC Board also announced it has reported the fraud to the California Attorney General’s Office, which regulates charities and nonprofit organizations.