Audit of Kathleen Vermillion’s charity reveals possible law violations in spending

By Joe Schoenmann

Tuesday, March 27, 2012 | 10:38 p.m.

A forensic audit of the fundraising arm of the Nevada Partnership for Homeless Youth found some spending by the charity “could constitute a violation of criminal and/or civil law.”

The audit of the Homeless Youth Foundation recommends legal action to recover any inappropriately spent money.

The audit was ordered by the Partnership’s board after questions arose about the charity’s handling of money. Executive Director Arash Ghafoori directed questions primarily at the charity’s founder, former CEO and Henderson Councilwoman Kathleen Vermillion, in a lengthy file sent to the Nevada Attorney General’s Office asking for an investigation.

The audit by Dennis Meservy, a Las Vegas certified public accountant, found “several airline expenditures were made for destinations that appear to not be on behalf of the Foundation’s business, and many invoices paid for were not available for my forensic examination.”

Meservy also said that ATM withdrawals “for cash should never be made for this organization. Many were made with no attached documentation.”

He continued: “The payment of personal bills (such as phone bills, spas, travel and meals, etc.) could show favoritism to certain individuals and could put the organization into jeopardy.”

In a news release, Ghafoori said, “It is our hope that we can get back to business as usual and fulfill the significant need in our community of serving homeless youth.”

Partnership board Chairman John Simmons said the results of the audit were sent to authorities “to ensure the integrity of our organization.”

Some of the receipts include payments to Victoria’s Secret for about $71 on Oct. 30, 2010; $200 for four Starbucks cards on Dec. 21, 2010; and $19.16 for false eyelashes, a pack of Marlboros and eyelash glue.

A handwritten note on the receipt says: “This was an accident.”

A series of emails in March 2010 documents a request to Vermillion, then known as Boutin, for $2,000 to purchase a car for one of the young people that the Youth Foundation assists. Boutin approves it, then writes: “Is it OK. Make sure check states scholarship allocation on the notation field.”

Vermillion, who resigned her Henderson City Council seat in December, founded the partnership but was fired by her own board in January. At the same time, they reinstated Ghafoori, who Vermillion had put on leave.

Sources said the audit shows thousands of dollars worth of spending without receipts or records of how it was spent.

The Las Vegas office of the FBI is investigating Vermillion, sources have said, looking into her actions on the Henderson City Council and how they might pertain to her actions as head of the Homeless Youth Foundation. The foundation was formed a few years ago to become the funding source of the Partnership for Homeless Youth.

In January, Vermillion filed a lawsuit against her ex-boyfriend, County Commissioner Steve Sisolak. She claimed Sisolak and Clark County employees defamed her by revealing the results of a drug test she had taken at the request of the partnership’s board. She also claimed Sisolak had an “improper” relationship with her 15-year-old daughter.

Sisolak fired back, filing a police report that Vermillion, her attorney Rob Martin and public relations advisor Mark Fierro had tried to extort $3.9 million from him. He wore a recording device when he met with Fierro and Martin, who asked him for the money to make Vermillion’s lawsuit disappear. Las Vegas police are still investigating his allegations that it was an extortion plot.

A short time later, the teenage girl’s father, Burt Boutin, issued a statement. In it, he said his teenaged daughter said the claims stated in the lawsuit against Sisolak were false.

Vermillion dropped the lawsuit.

Later, the daughter called an ambulance after finding her mother unresponsive. First reported as an attempted suicide, Vermillion vehemently denied that she tried to kill herself. In recordings to 9-1-1 dispatchers, the daughter never mentions suicide.

Days later, Vermillion told the Sun that Whitney Houston’s death had made her realize she could be endangering herself. She said it was her norm to wash down a handful of Xanax with wine to get to sleep at night.