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July 09, 2015

L.A. Charity Heads Charged With $8.5-Million Fraud

Three leaders of a Los Angeles nonprofit serving Latino women have been accused of participating in a "billing scam" that diverted millions of dollars in taxpayer funds to personal use, the Los Angeles Times reports.

Prosecutors said the Chicana Service Action Center officials defrauded Los Angeles County of more than $8.5 million, with a significant chunk of the money supporting a "lavish" lifestyle for the group's CEO, Sophia Esparza.

The organization received more than $16 million in county funds between 2007 and 2014 to offer job training, domestic-violence counseling, and other programs in multiple Los Angeles-area locations. Ms. Esparza, chief financial officer Silvia Gutierrez, and Thomas Baiz, the charity's vice president, are accused of creating phony records and files to support the center's invoices to the county's Department of Public Social Services.

Prosecutors allege Ms. Esparza used the organization's money to rent an apartment in an affluent neighborhood, purchase a Jaguar, and buy Los Angeles Dodgers and Los Angeles Clippers season tickets, among other expenses. In a statement, lawyers for her and Ms. Gutierrez said the charges are "based on a misunderstanding of the facts and a misinterpretation of the law by an overzealous prosecutor."