An embattled El Paso, Texas, charity raided earlier this year by federal authorities has sued its former president for more than $30 million alleging improprieties including fraud.
Ready One Industries is seeking the return of $24 million in compensation paid to Robert E. “Bob” Jones, the nonprofit’s former president and chief executive, along with other funds. The lawsuit filed in state District Court accuses Jones of making personal use of millions in company funds.
Jones’ lawyer, Chad Muller of San Antonio, said the lawsuit “is not based on any fact that I’m aware of, and it will be contested to the fullest degree.”
Ready One changed its name from National Center for the Employment of the Disabled recently amid a massive overhaul. The company had been the primary supplier of chemical-warfare suits for the U.S. military before its federal contracts were suspended.
The company won contracts based on a promise that at least 75 percent of workers filling government orders would be severely disabled. An audit last year concluded that only about seven percent of its employees working on the contracts met the requirements.
Jones, who took over as president and CEO in 1995, resigned in March.
Also in March, the President’s Committee for Purchase from People Who Are Blind or Severely Disabled suspended the nonprofit’s federal contracts and gave it a June 30 deadline to rename itself and restructure. The committee is expected to announce later this month whether Ready One has fully complied.
The lawsuit, which also names the Jones Family Trust and JFT Management, accuses Jones of using Ready One to loan money to acquire assets for himself without the knowledge of the nonprofit’s board of directors.
It alleges Jones overpaid himself by $1.5 million in 2004 and accuses him of failing to disclose that company funds had been used to finance his own investments.
The lawsuit says Jones failed to tell the board that the company had received notices from federal regulators of its possible noncompliance with federal laws and regulations.
Muller said he was surprised by the allegations in the lawsuit.
“In the past, Mr. Jones and I have been fully cooperative with NCED, with its attorney and have done everything possible to resolve all disputes with NCED,” he said. “This is the first time any allegation has been made of fraud.”
Information from: El Paso Times, www.elpasotimes.com.
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