Attorney General Bonta Announces Lawsuit Against California Equine Retirement Foundation for Mismanagement and Self-Dealing

OAKLAND – California Attorney General Rob Bonta today announced a lawsuit against the California Equine Retirement Foundation (CERF) and its Executive Director, Carrie Ard, for multiple violations of state charity laws stemming from longstanding mismanagement of the now-defunct organization and self-dealing by Ard. CERF, a charity once focused on the care of retired race and performance horses, also failed to comply with registration and reporting requirements, leading to the revocation of its charity registration in 2017. In the complaint, Attorney General Bonta seeks the involuntary dissolution of the charity, the transfer of CERF’s 29-acre ranch in San Jacinto to a charitable organization with a similar purpose, and a permanent injunction against Ard from future involvement in a charity, as well as appropriate damages and penalties.

“The California Equine Charity Foundation collected and mishandled donations at the expense of hardworking Californians,” said Attorney General Bonta. “With this lawsuit, we’re working to hold those involved accountable for their illegal and self-serving actions and to ensure the CERF property is reallocated and used for the care of retired horses. The California Department of Justice is committed to ensuring charities abide by the law and use donations for their intended purposes.”

In the complaint filed in Riverside County Superior Court, Attorney General Bonta alleges that Ard continuously mismanaged CERF and failed to comply with registration and reporting requirements, leading to the revocation of CERF’s charity registration in February 2017, as well as its IRS tax-exempt status in May 2017. CERF and Ard subsequently failed to respond to audit demands and made no effort to reinstate CERF’s charity registration. Despite CERF’s charity registration being revoked, Ard continued to live on the CERF property rent-free and in January 2022, attempted to sell the CERF property for $2.72 million.

In the complaint, Attorney General Bonta alleges the following violations of state charity laws:

• Involuntary dissolution: Ard knowingly and persistently mismanaged CERF, causing the revocation of its tax-exempt status and charity registration.
• Breach of charitable trust: Ard continuously used CERF assets, including the San Jacinto property, for her own benefit and attempted to sell CERF’s Property for over $2.7 million after the organization’s charitable status was revoked without notifying the Attorney General.
• Breach of fiduciary duty: Ard had a fiduciary duty to act in good faith and in CERF’s and its donors’ best interest in her position as Executive Director of the charity.
• Unjust enrichment: Ard used CERF assets for her own benefit, including living rent-free on the San Jacinto property.
• Unlawful solicitation: CERF and Ard unlawfully solicited donations while CERF was not in good standing with the Registry of Charitable Trusts and the IRS. 

In California, the Attorney General has primary responsibility for supervising charities, charitable trustees, professional fundraisers, and others who solicit or hold charitable donations. The California Department of Justice investigates the loss and misuse of charitable assets, fraudulent and misleading solicitation practices, improper reporting practices, and other breaches of fiduciary duty. Charities are required to register and file annual financial reports with the Attorney General’s Registry of Charitable Trusts. 

The Registry of Charitable Trust’s Registry Verification Search tool allows Californians to search the Registry’s database and verify whether a charitable organization or fundraiser has complied with the Attorney General’s registration and reporting requirements.

A copy of the complaint is available here.