AUSTIN, TEXAS — The U.S. Department of Justice has launched an investigation to determine whether Austin-based Southwest Key — the nation’s largest operator of shelters for migrant children — misused federal money, according to reports.
The New York Times reported that the U.S. Attorneys’ Office for the Western District of Texas is examining the nonprofit group’s finances in a probe being conducted in tandem with the FBI. The investigation was sparked by a previous Times report investigating Southwest Key business dealings, including a revelation that Southwest Key founder and CEO Juan Sanchez is now one of the nation’s highest-paid nonprofit executives.
Southwest Key operates two dozen shelters for migrant children in Texas, Arizona and California. In addition, the group runs charter schools, including East Austin College Prep Academy. The Times reported the organization “…stockpiled taxpayer dollars and possibly engaged in self-dealing with top executives.”
The report centers on how the nonprofit has enriched itself as the migrant influx grew. Although categorized as a charity on paper, Sanchez, 71, was paid $1.5 million last year — more than twice what his counterpart at the exponentially larger American Red Cross earned, according to the Times report.
Among the report’s other findings:
In response to the report, a Southwest Key spokesman said in a prepared statement: “We have not yet been contacted by the U.S. Attorney’s office or the FBI. So, it’s a bit difficult to comment at this point. We have a policy of working with any and all investigations, and we will do so in this case if it happens.”
In its earlier report, the Times found Southwest Key has collected $1.7 billion in federal grants in the past decade, including $626 million in the past year alone. Amid its growth as it’s tripled revenue in three years, the organization has left a record of sloppy management and possible financial improprieties, the report found.
>>> Read the full report at New York Times
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Photo: Migrants hold American flags during a peaceful march shortly before some evaded a police blockade and rushed toward the El Chaparral port of entry on November 25, 2018 in Tijuana, Mexico. U.S. Customs and Border Protection temporarily closed the two ports of entry on the border with Tijuana in response. Around 6,000 migrants from Central America have arrived in the city with the mayor of Tijuana declaring the situation a ‘humanitarian crisis’. (Photo by Mario Tama/Getty Images)
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