UNITED STATES OF AMERICA v. SOUTHERN POVERTY LAW CENTER, INC

=== IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF ALABAMA NORTHERN DIVISION ===

UNITED STATES OF AMERICA ]) ws R21 PW 23) crNO.22O SENET) [18USC. Feropial SoUSOUTHERN POVERTY LAW CENTER, INC.) 18 U.S.C.II0L DISTR!) 18US.C. § 1956(h)])) INDICTMENTThe Grand Jury charges:| INTRODUCTIONThe Souther Poverty Law Center's (“SPLC”) stated mission included the dismantling of‘white supremacy and conffontinghate across the country. However, unbeknownst to donors, some.of their donated money was being used to fund the leaders and organizers of racist groups,including the Ku Klux Klan, the Aryan Nation, and the National Alliance. The SPLC’s paidinformants (“field sources”) engaged in the active promotion ofracist groups at the same time thatthe SPLC wes denouncing the same groups on ts website. The SPLC also had a feld source who‘was a member of the online leadership chat group that planned the 2017 “Unite the Right” eventin Charloriesvill, Virginia. That ld source made racist postings under the supervision of theSPLC and helped coordinate transportation to the event for several attendees. In order to covertlypay its field sources, the SPLC opened bank accounts connected to a series of fictitious entities.‘The covert nature of the accounts allowed the SPLC to disguise the true nature, source, ownership,‘and control ofthe fraudulently obtained donated money the SPLC paid the field sources. In order‘to keep the scheme going, the SPLC made a series of false statements related to the operation ofthe accounts.THEORGANIZATIONAtall times relevantto this Indictment, the SOUTHERN POVERTY LAW CENTER, INC.1

p. 2 (“SPLC”)wasanon-profit,tax-exempt501(c)(3) organizationheadquarteredinMontgomery,‘Alabama,whichislocatedwithintheMiddleDistrictofAlabama.1.Accordingtotswebsite,“TheSPLCisacatalystforracialjusticeintheSouthandbeyond,workinginparmershipwithcommunitiestodismantlewhite supremacy,strengthenintersectionalmovements,andadvancethehumanrightsofallpeople.”2.Tocamyoutthis mission, theSPLCreliedinpartonpublicandcorporate donations.AstheSPLCexplainedonitswebsite:Withyourhelp,we'restandingupforthemostvulnerablepeopleinsociety—thosewhohavenoother champion.We'reexposinghateandinjustice,fightingdiscrimination,andprovidingaward-winninganti-biasmaterial—freeofcharge—toschoolsacrossAmerica.Wenevertake legalfeesfromourclients,andweacceptno governmentfunding.Rather,werelyonthecompassionandgenerosityofpeoplelikeyou.3.TheSPLCwebsitealsoexplainedtopotentialdonorsthat,“Yoursupportpowersourworktoconfronthate,standuptoinjustice,anddefend ourcivilandhumanrights.Fromthecourtroomtotheclassroomtocommanities acrossthecountry,youcanhelpcreatea morejust‘andinclusivefuture forall.”Thesedonationswereused,inparttofundvarious publicationssuch[as the “IntelligenceReport,”“Hatewatch,”andthe“IntelligenceProject Dispatch.”4.The“IntelligenceReport”wasamagazinelikeperiodical“published. ..bythestaffoftheSouthernPovertyLawCenter'sIntelligenceProject andprovidedfreeofchargetolawenforcementofficials journalists, scholars,andothers.”5.“Hatewatch”wasblog operatedby theSPLCthat“monitors and exposesactivitiesof thehardrightinthe United States.”Blogtopicsincluded reportingonhatecrimes andevents,hate groupsandindividuals,andlawsuits related tothesetopics.ByprovidingSPLCwithanemailaddress, a person could receive “thelatestupdatesfromHatewatch.”6.The“Intelligence Project Dispatch”wasamonthlyonline publication issuedbytheHatewatch Staff that “monitors andexposes white supremacy anditsimpact on communities.”2

p. 3 Theheaderatthetopofthepublicationfurtherexplainstoreadersthat,“TheSouthernPovertyLawCenterworkstodismantle whitesupremacyinpublicforumsandonline,exposes hateandanti-democracyextremism,andcountersdisinformationandconspiracytheorieswithresearchandcommunityresources.”7.Thetopbannerof theSPLCwebsitehadalinkforpublicdonations.Byclickingthe“Donate”button,potentialdonorsWerebroughttoawebpagethatexplainedhow10donate:‘moneytotheSPLC.Thispagealsoinformed donorsthat,“Withyoursupport,theSPLCActionFundwillpursueaboldactionagendatoconfrontourcountry’smosturgentchallenges.Together, we'llupliftprogressive candidateswhoupholdinclusivedemocraticvalues whileinvestigatingandexposingcandidates using hateandextremismtogainpower.”THESPLC’SPAIDINFORMANTSNETWORK—THE“Fs”8.Startinginthe1980s,theSPLCbeganoperatingacovertnetworkofinformantswhowereeitherassociatedwithviolent extremistgroups,suchastheKuKluxKlan,orwhohadinfiltratedviolentextremistgroupsattheSPLC’sdirection.Theseinformantswerereferred fobysomeindividualswithin theSPLCasthe“fieldsources”orthe“Fs.”9.Betweenat least2014 and2023,theSPLCpaidtheirFsinaclandestinemanner.DoingsohidthefactthatwhiletheSPLCreceiveddonationmoneyundertheauspicesthatthefundswouldbe usedto“dismanle”violentextremist groups,thisdonationmoneywas,instead,|beingused, inpart bytheSPLCtopayleadersandotherswithin thesesameviolent extremist‘groups.Thatmoney wasthenusedforthe benefitofthe individualsaswell as the violent extremistgroups.10.Between 2014 and 2023,theSPLCsecretlyfunneled more than$3million inSPLCfundstoFswhowereassociated with various violent extremist groups.11.Examples of Fswho weresecretlypaidbytheSPLCinclude, butare not limited tothe following:3

p. 4 a. P37 was a member of the online leadership chat group that planned the 2017“Unite the Right” event in Charlottesville, Virginia and attended the event atthe direction ofthe SPLC. F-37 made racist postings under the supervision ofthe SPLC and helped coordinate transportation to the event for severalattendees. Between 2015 and 2023, the SPLC secretly paid F-37 more than$270,000.00.b. F-9 was affiliated with the neo-Nazi organization, the National Alliance andserved as an F for the SPLC for more than 20 years. F-9's activities includedfundraising for the National Alliance. Between 2014 and 2023, the SPLCsecretly paid F-9 more than $1,000,000.00. Tn 2014, F-9 entered theheadquarters of a violent extremist group and stole 25 boxes oftheir documents.F-9 coordinated payment for the copying of the materials with a high-levelSPLC employee who had knowledge the documents had been stolen. Theoriginal stolen materials were retumed to the violent extremist group in asecond illegal entry by F-9. Thereafter, the high-level SPLC employee utilizedthe documents, in part, as the basis for a story published on the SPLC’sHatewatch website and authored by the employee. Another F, F-39, wasblamed for the theft and was paid approximately $6,000.00 by the SPLC tofalsely take responsibility for the theft.c. F-unknown was the Imperial Wizard of the United Klans of America. In anarticle published on November 22, 2013, the SPLC described the group as a“millennial reboot of what was once a serious domestic treat. nits prime, the:United Klans of America was responsible for, among other things, the 16%Street Baptist Church bombing in Birmingham, Ala., which resulted in thedeaths of four litle girls in 1963.4

p. 5 d. F-27 was reported as an officer in the National Socialist Movement and theAryan Nations affiliated Sadistic Souls Motorcycle Club. Between 2014 and2020, the SPLC secretly paid F-27 more than $300,000.00.€. F-42 was the former chairman of the National Alliance. The SPLC websitecontained an “Extremist File” webpage about F-42 from which the SPLCsolicited donations. Between 2016 and 2023, the SPLC secretly paid F-42 morethan $140,000.00. This overlapped the time period in which F-42 was featuredon the SPLC’s “Extremist File” webpage.£. F-30 led the National Socialist Party of America, was the former director of afaction of the Aryan Nations, and a former member of the Ku Klux Klan. TheSPLC website contained an “Extremist File” webpage for F-30 from which theSPLC solicited donations. Between 2014 and 2016, the SPLC secretly paid F-30 more than $70,000.00. This overlapped the time period in which F-30 wasfeatured on the SPLC’s “Extremist File” webpage.g F-43 was the reported National President of American Front and a convictedfederal felonfor his participation in a cross burning. Between 2016 and 2019,the SPLC secretly paid F-43 more than $19,000.00.h. Funknown was a member of the Ku Klux Klan and married to an ExaltedCyclops ofthe Ku Klux Klan. F-unknown and their spouse were involved inlitigation whereby the Ku Klux Klan applied to take part in the Adopt-a-Highway program. During the course of the litigation, known payments weretraced from the SPLC to F-unknown which exceeded $3,500.00.12. In addition to directly paying leaders and others associated with the same violentextremist groups that the SPLC sought donations ostensibly to “dismantle,” the SPL also usedFs to indirectly funnel money to other violent extremist group leaders. This included the SPLC5

p. 6 funnelingmorethan$160,000.00fromafictitiousentitytoF-11whothensentfundstovariousviolentextremistgroupleadersincludingtheformerGrand WizardoftheKnightsoftheKuKluxKlan.‘TieSPLC’SFICTITIOUSENTITIES13.TosecretlyfunneldonatedmoneytotheFs,individuals attheSPLC,includinga‘personwhowouldbecometheChiefFinancialOfficer(“Employee-1)andapersonwhowould‘becomethe Directorof theIntelligenceProject(“Employee-2),amongothers,openedaseriesofbankaccounts atBank-1andBank-2inthenameofvariousfictitiousentities,including,butnotlimitedto,thefollowing:a.CenterInvestigativeAgency(“CIA”),b.FoxPhotography,c.NorthWestTechnologies (“NorthWest Tech),d.TechWritersGroup(“TechWriters”),and¢.RareBooks Warehouse(“Rare Books”).14.Thesefictitiousentitieswereneverincorporated,had nobonafideemployees,andconductednoactual business.15.Ataltimesrelevant tothisIndictment,Bank-1 and Bank-2 wereinsuredbytheFederalDeposit Insurance Corporation (“FDIC”).{COUNTS ONE THROUGHSIX(Wire Fraud)16.Thefactssetout in paragraphs1through16arefullyincorporatedinthese Counts.17.Beginninginor about 2014, andcontinuing throughat leastAugust2023,in the‘MiddleDistrictof Alabama,the defendant,SOUTHERN POVERTY LAWCENTER, INC,devised and intendedto devise a scheme andartifice todefraud donors, and attemptedtodo50,6

p. 7 and to obtain money and property belonging to donorsby materially false and fraudulent pretenses,representations, promises, and omissions.PURPOSE OF THE SCHEME AND ARTIFICE18. The objective of the scheme and artifice was to obtain money via donations through‘materially false representations and omissions about what the donated funds would be used for.19. To cay out this scheme and artifice, the SPL explicitly sought donations underthe auspices that donor money would be used to help “dismantle” violent extremist groups. In theSPLC’s solicitations for donations as outlined herein, donors were not told that some of thedonated funds were to be used by the SPLC to pay high-level leaders of violent extremist groups‘and others, nor were donors ever told that some ofthe donated funds were used for the benefit ofthe violent extremist groups or that some of the donated funds would be used in the commissionof state and federal crimes.WIRE COMMUNICATIONS20. On or about Apri 25, 2023, in the Middle District of Alabama, and elsewhere, thedefendant,SOUTHERN POVERTY LAW CENTER, INC.,for purposes of executingand attemptingto executethe scheme and artifice set out in these Counts,did cause to be transmitted in interstate commerce, by means of wire communications, certainsigns and signals.21. Specifically, the SPLC caused interstate wire communications between Alabama.and other states through the use of the Automated Clearinghouse system (“ACH”) which wasutilized to transmit an ACH batch transfer from Bank-1 to various bank accounts utilized by theFs. Specifically, $13,905.00 was caused to be transmitted by means of wire communications ininterstate commerce the writings, signs, and signals, described below for cach count, cachtransmission constituting a separate count:7

p. 8 Bann a IS Sax: | 4/25/2023 approximately $4,750.00 from the SPLCOperating Account at Bank-1 to a Firsteo 0hEse,2 4125/2023 approximately $1,000.00 from the SPLCOperating Account at Bank-1 to a Bank ofA eeRg4252023 | approximately $1,200.00 from the SPLCiin BiaA wire transaction in the amount of4/25/2023 approximately $3,090.00 from the SPLCpony S000, fom ie, LCEna5 4257023 | approximately $2,865.00 from the SPLCOperating Accountat Bank-1 to a WoodforestBank account controlled by F-40.A wire transaction in the amount of| aniona fe mont ofOperating Account at Bank-1 to a US Bank,N.A. account controlled by F-42.22. All in violation of Title 18, United States Code, Section 1343.COUNTS SEVEN THROUGH TEN(False Statements to a Federally Insured Bank)A ——24. On or about the dates listed in the chart below, in the Middle District of Alabama,the defendant,SOUTHERN POVERTY LAW CENTER, INC.,novia se sss on spent o 4 Fda ed aly vlan of“Title 18, United States Code, Section 1014.OVERVIEW25. An uit is puatis 14 at £5, advil STL spoutaccounts for CIA, Fox Photography, North West Tech, and Tech Writers at Bank-1. Similarly,8

p. 9 individuals at the SPLC opened a bank account for Rare Books at Bank-2.26. The purpose of opening these bank accounts for the fictitious enifies was to be able:to conduct financial transactions that made it appear as if the Fs were receiving money from thefictitious entites rather than receiving donated funds from the SPLC.27. After the accounts were opened, the SPLC, through Employee-1, among others,executed Sole Proprietorship Resolution of Authority documents with Bank-1. These documentscontained false and misleading information regarding the ownership and control of the fictitiousentities for which the bank accounts were opened. Employee-1, and others signed thesedocuments containing false and misleading statements for the benefit of the SPLC.,28. On or about the dates listed below, the following false or misleading statementswere made to an FDIC insured financial institution:1 “Employee-1", certify that Iam the sole owner of the7 | Dec.20,2016 | above named proprietorship, | Sole Proprietorship | Bank-1Federal Tax 1.D. number... . Resolution of9788, engaged in business Authorityunder the trade name ofCenter Investigative Agency.1 “Employee-1", certify thatIam the sole owner of theDec. 20,2016 | above named proprietorship, | Sole Proprietorship | Bank-1Federal Tax 1.D. number . . . Resolution of9788, engaged in business Authority‘under the trade name of FoxPhotography.I, “Employee-1", certify that Iam the sole owner of theDec. 20,2016 | above named proprietorship, | Sole Propristorship | Banic-1Federal Tax LD. mumber... | Resolution of9788, engaged in business Authorit9

p. 10 “under the trade name of NorthWest Technologies.1, “Employee-1", certify that Iam the sole owner of theDec. 20,2016 | above named proprietorship, | Sole Proprietorship | Bank-1Federal Tax LD. number .. Resolution of9788, engaged in business Authorityunder the trade name of TechWriters Group29. In 2020, Bank-1 conducted an intemal investigation info these accounts.‘Thereafier, an SPLC employee requested that Bank-1 close the accounts associated with the CIA,Fox Photography, North West Tech, and Tech Writers and transferthe remaining balances in these:accounts to a Bank-1 account ending in 6050 held in the name of the SPLC.30. In responseto Bank-1's internal investigation, on or about September 9, 2021, thePresident and Chief Executive Officer of the SPLC, as well as the Board Chair of the SPLCadmitted the following in writing to Bank-1:Pursuant to the discussion we had earlier this week, please let this correspondenceserve as confirmation that the accounts listed below were openedfor the benefit ofSouthern Poverty Law Center operations and operated under the Center'sauthority. The following accounts are listed below:-... 6700 Center Investigative Agency— opened 1/31/2008 — closed 8/5/2020=... 9674 Fox Photography— opened 1/31/2008 — closed 8/5/2020-... 6743 North West Technologies — opened 1/31/2008 — closed 8/5/2020- 6751 Tech Writers Group — opened 1/31/2008— closed 8/5/2020- ... 6719 Imagery Ink— opened 1/31/2008 — closed 3/15/2013- 6727 J&J Electronics — opened 1/31/2008 — closed 3/15/2013- ... 6735 Kelly's Marine — opened 1/31/2008 — closed 3/15/201310

p. 11 - 6600 Turner Personnel — opened 4/25/2008 — closed 11/8/2011Additionally, this wil confirm that the entity “Rare Books Warehouses” operatesunder Center authority as well.31 Allin violation of Title 18, United States Code, Section 1014.COUNT ELEVEN(Conspiracy to Commit Concealment Money Laundering)32. The facts set out in paragraphs 1 through 16 as well as paragraphs 26 through 28‘and 30 through 31, are fully incorporated in this Count.R 33. Beginning in or about 2014 and continuing through at least August 2023, in theMiddle District of Alabama and elsewhere, the defendant,SOUTHERN POVERTY LAW CENTER, INC.,did knowingly combine, conspire, confederate, and agree with persons known and unknown to thegrand jury to commit concealment money laundering in violation of Title 18, United States Code,Section 1956(@)(1)B)()-OBJECTIVE OF THE ConsPIRACY34. It was the objective of this conspiracy to conduct financial transactions designed toconceal the true nature, source, ownership, and control of fraudulently obtained donated moneythe SPLC paid to Fs.MANNER AND MEANS OF THE CONSPIRACY35. After receiving donated funds obtained via the wire fraud scheme alleged in Counts1-6, individuals at the SPLC transferred proceeds of the wire fraud scheme from the SPLC’soperating account at Bank-1 to another account at Bank-1 in the name ofthe CIA.36. Thereafler, the funds in the CIA account at Bank-1 were transferred to accounts atBank-1 in the following names: Fox Photography, North West Tech, and Tech Writers. Thesefunds were then transferred from the Fox Photography, North West Tech, and Tech Writers’1

p. 12 ‘accountstothevariousFs.Thesefinancialtransactionsweredesignedtoconceal thetrue nature,source,ownership,andcontrolofthedonatedfundstheSPLCwaspayingtotheFs.37.Inaddition,aportionoftheproceedsthathadbeendepositedintotheCIAaccountatBank-1wasdepositedintotheRareBooksaccountatBank-2.ThefinancialtransactionsfromtheCIAaccounttotheRareBooksaccountweredesignedtofurtherconcealthetrue nature,source,ownership,andcontrolofthedonatedfundstheSPLCwaspayingtotheFs.38.ThefundsdepositedintheRareBooksaccountatBank-2werethenloadedonto‘paycards issuedtotheFswhoweresupposedlyemployeesofthefictitious entity,RareBooks‘The financialtransactionsmovingfundsfromtheRareBooksaccounttotheFs’paycardsweredesignedtostillfurtherconcealthetrue nature,source,ownership,andcontrolof thedonatedfundstheSPLwaspayingtothe Fs.39.Aftertheclosureofthefictitiousentitiesaccounts followingBank-1'sinternalinvestigation,theSPLCaltered theirmethodofconductingfinancial transactionsdesignedtoconcealthe true nature,source,ownership,andcontrolofthedonated fundsthattheSPLCwaspayingtotheFs.40.Specifically,fromin oraboutAugust 2020andcontinuingthroughinoraboutAugust2023,theSPLutilizedtheACHsystemtopay Fswith donatedfunds.TheseACH‘paymentsweremaskedwith monikerssuchas“Rarebooks050” and“TPResearchCONOS0.” Thesemasked ACHtransactionsweredesignedtoconceal thetrue nature, source,ownership,andcontrolofthe donated fundstheSPLCwaspayingto theFs.AllinviolationofTitle18,UnitedStatesCode,Section 1956(t).FORFEITURE ALLEGATION-1A.Theallegationscontained inCounts1-6ofthisIndictmentarehereby reallegedandincorporatedbyreferencefor thepurpose of alleging forfeiturespursuantto Title 18,UnitedStatesCode, Sections 981(a)(1)(C) andTitle 28, United States Code, Section 2461(c).2

p. 13 B.Uponconvictionoftheoffensesin violationofTitle18,UnitedStatesCode,Section1343,setforthinCounts1-6ofthsindictment,the defendant,SOUTHERN POVERTYLAWCENTER,INC.,shallforfeittotheUnitedStates,pursuanttoTitle18,UnitedStatesCode,Sections981(2)(1)(C)‘andTitle28,UnitedStatesCode,Section 2461(c),anyproperty,realor personal,whichrepresentsoristraceable tothe grossreceiptsobtained,directlyorindirectly,fromtheoffenses in violationofTitle18,UnitedStatesCode,Section 1343.C.Ifanyof theproperty describedinthisforfeiture allegation,asaresultofanyactoromissionofthedefendant:(1)cannotbelocateduponthe exerciseofduediligence;(hasbeentransferredorsoldto,ordepositedwith,athird party;(3)hasbeenplacedbeyondthejurisdictionofthecourt;basbeensubstantiallydiminishedinvalue; or(5)hasbeen commingledwithother propertywhichcannotbedividedwithoutdifficulty,theUnitedStatesshallbeentitledtoforfeitureofsubstituteproperty pursuanttoTitle21,UnitedStatesCode,Section 853(p), asincorporatedbyTitle28,UnitedStatesCode,Section 2461(c).All pursuanttoTitle18,UnitedStatesCode,Sections 981(2)(1)(C)andTitle28,UnitedStatesCode,Section2461(c).[FORFEITURE ALLEGATION-2A.TheallegationscontainedinCount11ofthisIndictmentarehereby reallegedandincorporatedbyreferenceforthe purpose of allegingforfeiturespursuant to Title 18,UnitedStatesCode, Section 982(a)(1).B.Uponconviction ofthe offensesin violationofTitle 18,UnitedStatesCode,Sections 1956(a)(1)(B)G) and(h), set forth inCount11 of thisIndictment, the defendant,13

p. 14 ‘SOUTHERN POVERTY LAW CENTER, INC,,shall forfeit to the United States, pursuant to Title 18, United States Code, Section 982(e)(1), anyproperty,eal or personal, involved in such offense, or any property traceable to such property.C. Ifany ofthe property described in this forfeiture allegation, as a result of any actor omission of the defendant:(1) cannot be located upon the exercise of due diligence;(2) has been transferred or sold to, or deposited with, a third party;(3) has been placed beyond the jurisdiction of the court;(4) has been substantially diminished in value; or(5) has been commingled with other property which cannot be dividedwithout difficulty,the United States shall be entitled to forfeiture of substitute property pursuant to Title 21, UnitedStates Code, Section 853(p), as incorporated by Title 28, United States Code, Section 2461(c).Al pursuant to Title 18, United States Code, Section 982(a)(1).A TRUE BILLVIN P. DAVIDSONACTING UNITED STATES ATTORNEYRussell T. Dureski! ‘Assistant United States Attomey| 14