Month: January 2022

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Court Finds The Fab Family Fund, Inc., Shanna Pinet a/k/a Dr. Fabianna Marie, and David Pinet Violated Charitable Trusts Laws and Orders an Injunction, Restitution, Attorneys’ Fees, and Civil Penalties

Attorney General John M. Formella announces that on January 4, 2022, the Rockingham County Superior Court ruled that The Fab Family Fund, Inc., Shanna Pinet, and David Pinet violated laws pertaining to charitable organizations, including deceptive fundraising, breach of fiduciary duties, and failure to comply with an administrative subpoena.

In September 2021, the Charitable Trusts Unit filed a civil complaint against The Fab Family Fund, Inc., a New Hampshire nonprofit corporation, Shanna Pinet a/k/a Dr. Fabianna Marie, the chief executive officer of The Fab Family Fund, and David Pinet, treasurer of The Fab Family Fund. The complaint alleged that the charity and the board members failed to comply with their obligations under New Hampshire law to register with the New Hampshire Attorney General. In addition, the lawsuit alleged that Shanna Pinet and David Pinet engaged in deceptive fundraising, breached their fiduciary duties to the charity, and unlawfully failed to respond to repeated requests for information and administrative subpoenas.

Specifically, the complaint alleged, among other things, that The Fab Family Fund claimed on its Facebook page and website that it was a “501(c)(3) nonprofit,” but it did not receive such recognition from the Internal Revenue Service. The complaint also alleged that the organization conducted many fundraisers, including a “zoom chat” with “Dr. Fab, the Naturopathic Doctor,” on “Demystifying Breast Cancer,” but Shanna Pinet a/k/a “Dr. Fab” was not licensed as a naturopathic doctor in New Hampshire or elsewhere in the United States. There is no evidence that any funds raised actually supported the organization’s mission to “educate, facilitate and grant Breast Cancer Thrivers and their families an all-expense paid trip for solace and healing.”

On November 10, 2021, the Court issued a notice of default against the defendants and on January 4, 2022, the Court granted the Motion for Entry of Final Judgment. The Court ordered that The Fab Family Fund be dissolved as a New Hampshire voluntary corporation. In addition, the Court ordered that Shanna Pinet and David Pinet be permanently enjoined a) from holding any position of authority with any New Hampshire charitable organization and b) from establishing or working for any nonprofit organization related to breast cancer for a period of ten years. The Court ordered that Shanna Pinet and David Pinet pay $5,794 in restitution, $15,287 to the Attorney General for attorneys’ fees and costs, and $40,000 in civil penalties.

Attorneys Thomas Donovan and Diane Quinlan of the Charitable Trusts Unit prosecuted the case.

The Charitable Trusts Unit, under the direction of the Attorney General, exercises all the common law and statutory rights, duties and powers in connection with the supervision, administration and enforcement of charitable trusts, charitable solicitations, and charitable sales promotions. Visit www.doj.nh.gov/charitable-trusts for information about the Charitable Trusts Unit and resources for charities and executives.

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AG Healey Reaches $6 Million Settlement With Former Head of Homeless Shelter for Lying to the State and Funneling Money to Himself

Manuel Duran Formerly of Casa Nueva Vida to Pay Nearly Treble Damages and is Banned from Working with the Shelter and the State

The former executive director of Casa Nueva Vida (CNV), a publicly-funded nonprofit homeless shelter with locations in Boston and Lawrence, will pay $6 million to settle allegations he abused his position to improperly funnel state money to himself, all while falsely certifying compliance with state regulations designed to detect such improper self-dealing, Attorney General Maura Healey announced today.

The consent judgment, filed and entered in Suffolk Superior Court on Wednesday, resolves a civil lawsuit filed by the AG’s Office – less than four months ago – in September against Manuel Duran, the former Executive Director, Chief Executive Officer, President and Board Member of CNV. The lawsuit alleged Duran violated the Massachusetts False Claims Act by making false statements and material omissions on documents submitted to the state in which he failed to disclose his related party transactions. According to the AG’s Office, Duran signed leases on CNV’s behalf for investment properties he owned, charged CNV substantially above fair rental value, and directed CNV to utilize funding it received from the state to pay for improvements to properties he owned.

“Manuel Duran abused his position of trust to pad his pockets with millions of dollars that should have gone to families in need,” AG Healey said. “Our office moved quickly to reach today’s settlement which holds him accountable for the harm done and returns nearly three times amount of money he stole from the state.”

Starting in March 2003, Duran served in various leadership roles at CNV that allowed him to control the shelter’s day-to-day operations, as well as its real estate investments and leases. The AG’s Office alleges that from fiscal year 2014 through 2019, when CNV was at least 92 percent state funded, Duran caused CNV to submit documents to the state that failed to disclose Duran’s own personal or business transactions with CNV, known as “related party transactions.” Under state law, CNV was required to disclose any related party transactions to assure the state that it was engaging in transactions on an arm’s length basis and was spending state funds in a fair and reasonably prudent manner. By not disclosing information regarding his related party transactions with CNV, Duran made it impossible for the state to evaluate CNV’s continued eligibility as a contractor and enabled CNV to receive $33 million in state funding under a contract with the Department of Housing and Community Development for emergency homeless shelter services.

The AG’s complaint alleged Duran funneled approximately $2.29 million in state funds to himself through his illegal actions, but because this case was brought under the state’s False Claims Act, which allows for up to treble damages, Duran will pay the state $6 million.

Under the terms of the AG’s settlement, in addition to the required $6 million payment, Duran is permanently banned from working with CNV; accepting any position as a fiduciary at any Massachusetts public charity; working on or with any business connected to the state or a state entity or any business that receives funding from the state; and from forming a separate entity or operating under a different name in order to violate the AG’s consent judgment.

In September, Duran was also criminally indicted by a Suffolk County Grand Jury in connection with stealing from CNV and lying under oath to hide his self-dealing. The AG’s criminal case against Duran is ongoing.

This civil case was handled by Assistant Attorney General Mary-Ellen Kennedy and former Special Assistant Attorney General Coleman Gay, with assistance from Assistant Attorney General Matt Douglass, Division Chief Amy Crafts, and Paralegal Cara Bradley, all of AG Healey’s False Claims Division, as well as Senior Investigator Marlee Greer and Edward Cherubin of the Civil Investigations Division.

The False Claims Division was created by AG Healey to safeguard public funds and promote integrity and accountability in public contracting. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600.