Attorney General’s Office Halts HiCaliber’s Fundraising, Spending For Failing To File Tax Docs
Monday, March 5, 2018
HiCaliber Horse Rescue, a Valley Center nonprofit embroiled in allegations of fraud and animal abuse, can no longer raise or spend money until it submits proper financial disclosures to the state.
The California Attorney General’s Office sent HiCaliber a letter Friday stating the nonprofit is considered “delinquent” for failing to submit federal and state tax forms for 2016. Both account for revenue and assets, and allow the state Justice Department to ensure donations are not “misapplied and squandered through fraud or other means.”
Paul Dostart, an expert in nonprofit law and a partner with La Jolla-based Dostart Hannink & Coveney, read the letter and told inewsource “it’s effectively a standstill order” until HiCaliber gets its paperwork on file.
“It’s not unheard of to be delinquent if you are a first time filer,” Dostart said. “But this is not even their first delinquency.”
The Attorney General’s Office sent HiCaliber a similar letter last year for failing to file disclosures for 2013.
HiCaliber’s founder, Michelle Knuttila, texted inewsource Sunday night that she’s “human and dropped the ball.”
“It’s already being addressed/handled by our attorney and CPA. An Honest mistake,” she said.
HiCaliber has been a nonprofit since 2013 and its practices provoke extreme reactions – loyal support to outrage – among horse enthusiasts around the world. Knuttila is its tough-talking, unapologetic founder and most public persona.
The nonprofit solicits donations from people through social media and online fundraisers. It also has corporate sponsorships, adoption and training fees, and several additional methods of income. Knuttila told inewsource HiCaliber earned “probably just under” a million dollars in revenue last year, though no public paperwork exists to show that.
Knuttila’s weekly trips to an Ontario livestock auction to fundraise for the rescue and rehabilitation of horses meant for slaughter can net the organization thousands of dollars from supporters who praise her methods. Critics question where the money goes because HiCaliber often euthanizes horses shortly after purchase due to a variety of alleged physical ailments or behavioral issues.
“It is within our right to euthanize every horse here without a reason,” Knuttila told inewsource on Friday during a visit to HiCaliber’s ranch. “They're our property. If the organization decides to euthanize that horse, that is our right. It's our property. I don't have to have a vet say, ‘I recommend it for euthanasia.’”
inewsource was unaware of the attorney general’s letter during Friday’s interview but did ask Knuttila about the organization’s funds.
“I know about the financials as far as the day-to-day,” Knuttila said, “but the files and the CPAs and all that type of stuff, I generally stay away from all that.”
Local and state government agencies are investigating allegations of fraud, animal abuse and unlicensed veterinary practices at HiCaliber.
The California Veterinary Medical Board confirmed its investigation last week. A spokeswoman told inewsource the agency “could be looking at unlicensed activity, scope of practice issues or standard of care issues.” San Diego County’s Department of Environmental Health, Vector Control Program, Code Enforcement and Sheriff’s Department are also involved. As is the Inland Valley Humane Society, the Los Angeles Society for the Prevention of Cruelty to Animals and the Valley Center Fire Prevention District.
Several people interviewed by inewsource said they have been contacted by or are actively working with district attorney investigators from San Diego County, Riverside County and San Bernardino County.
In general, the attorney general and county district attorney offices do not confirm or deny investigations.
inewsource asked Knuttila if she or her board were worried about the fraud allegations.
“I don't have any concerns with it,” she said. “I don't imagine many of us do because we're not doing anything wrong with the money.”
Knuttila is listed on 2014 and 2015 IRS forms as the person who possesses HiCaliber’s books and records. She told inewsource she’s in that position because the nonprofit “had to do that because some titling, or who wanted what position on the board, or something like that.”
She also said she’s currently on the board of directors – though that’s not verifiable because there is no current paperwork.
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