Attorney General Brian L. Schwalb today sued Raheem AI, a nonprofit created to improve transparency and accountability in policing, and its founder and Executive Director Brandon Anderson for violating the District’s nonprofit and workers’ rights laws. Anderson used Raheem AI’s charitable funds for his own personal benefit - specifically to support his luxurious lifestyle - while the organization failed to monitor spending or implement basic nonprofit governance requirements. Anderson and Raheem AI also failed to pay the organization’s sole District-based employee the wages she had earned and required her to sign an illegal non-compete clause.
“Brandon Anderson misused charitable donations to fund lavish vacations and shopping sprees, and the Raheem AI Board of Directors let him get away with it,” said Attorney General Schwalb. “Not only did their financial abuses violate fundamental principles of nonprofit governance, but Anderson and Raheem AI failed to pay their employee the wages they had earned. My office will not allow people to masquerade behind noble causes while violating the law, cheating taxpayers, or stealing from their workers.”
Raheem AI, which does business as Community Response Works, is a tax-exempt District of Columbia nonprofit corporation, with a stated purpose to “empower communities to achieve greater police transparency and accountability.” It has solicited donations to “equip black, brown, and indigenous community crisis responders with the tools, training, connections, and funding they need to provide care.” Brandon Anderson founded Raheem AI in 2017 and served as a board member and as its Executive Director until April 2024. While Raheem AI’s board recently placed Anderson on leave and ceased operations, neither he nor the organization has restored the misused funds or compensated their employee for owed wages and damages.
The Office of the Attorney General (OAG) alleges that:
Anderson diverted $75,000 of nonprofit funds for his own personal use. Since 2021, Anderson repeatedly used Raheem AI’s funds for personal use: spending over $40,000 on a luxury vacation rental service that allows members to stay in high-end mansions and penthouse apartments, $10,000 on hotels and Airbnb’s for personal travel - including to a Cancun resort, $10,000 on designer clothing brands, and $5,000 on emergency veterinary services. None of these expenses furthered Raheem AI’s stated nonprofit purpose.
Raheem AI failed to properly oversee the organization’s finances. District nonprofits are legally required to have at least a President and a separate Treasurer to manage their operations and finances. Raheem AI has not had a Treasurer since 2020, giving Anderson unrestricted control of its finances. The Board of Directors also failed to implement any measures to oversee the organization’s finances, including Anderson’s corruption.
Anderson and Raheem AI failed to pay their District employee. Raheem AI’s Deputy Director informed the Board of Anderson’s illegal conduct, and Anderson was placed on administrative leave in April 2024 as a result. Though the Deputy Director continued to work after that, Anderson and Raheem AI have not paid her tens of thousands of dollars in earned wages.
Anderson and Raheem AI forced their employee into an illegal noncompete clause. Anderson and Raheem AI forced their Deputy Director, who was paid under $150,000 per year, to sign a noncompete clause, even though noncompete clauses in employment contracts of less than $150,000 are illegal in the District.
OAG’s lawsuit alleges that these actions violate the District’s Nonprofit Corporation Act (NCA), Wage Payment and Collection Law (WPCL), and Ban on Noncompete Agreements Act (BNA).
With this lawsuit, OAG is seeking a Court order to dissolve Raheem AI as a District nonprofit corporation, recover misused funds and direct them to appropriate charitable purposes, permanently bar Anderson from serving as an officer or director of any District nonprofit, award Raheem AI’s Deputy Director the wages she is owed plus damages, and award penalties to the District for each violation of the WCPL.
A copy of the lawsuit is available here.
This matter was handled by Cole Niggeman, Ruff Fellow, and Cara Spencer, Assistant Attorney General of the Antitrust & Nonprofit Section, and Morgan Sperry, Law Clerk, and Sarah Levine, Assistant Attorney General of the Worker Rights and Antifraud Section.
About the District’s Nonprofit Corporation Act
Nonprofit organizations are set up to benefit the public—their funds are a form of public trust. The NCA broadly empowers the Attorney General to ensure that nonprofits in the District of Columbia operate and spend their funds consistent with the public purpose for which they are created. A nonprofit abandons its public purpose and violates the NCA when it allows any portion of its funds to be used in ways that benefit private persons or companies.
OAG’s Nonprofit Enforcement Work
Since 2015, OAG has steadily expanded its capacity to enforce District laws governing nonprofits. Most recently, OAG sued the former Treasurer of an elementary school’s parent-teacher organization for using nonprofit funds for personal enrichment. OAG also resolved actions against a lodge of the Fraternal Order of Police for running an illegal off-premises liquor sales program, the Coast Guard Auxiliary Association for improper payments to its Board President, and Delta Phi Epsilon, Inc. for using nonprofit funds for personal gain. OAG has also litigated or resolved cases against several charter schools, including Options Public Charter School, as well as the president of the Park Southern Neighborhood Corporation, an affordable housing building, for mismanagement of nonprofit funds. OAG has also sued several organizations for misuse of charitable funds, including Casa Ruby, a DC organization whose leader misappropriated funds intended to serve LGBTQ+ youth. Additionally, OAG has obtained a court order requiring District nonprofit Howard Theatre Restoration, Inc. to dissolve for failing to function in support of the District’s historic Howard Theatre. And OAG secured $950,000 from the Washington Hebrew Congregation’s preschool for violations of the NCA in addition to violations of several childcare safety laws that put children at risk, and OAG intervened to resolve a board dispute at an internet freedom organization.
If you suspect that a nonprofit or officer of a nonprofit doing business in the District of Columbia is violating District law, please contact OAG at (202) 727-3400.