LIMA, Ohio (Legal Newsline) - Ohio Attorney General Richard Cordray announced on Friday that he has filed a lawsuit against a homeless shelter and its operator for allegedly failing to use collected donations to maintain a homeless shelter for veterans.
Michael Muhammad allegedly sits in front of the local post office soliciting donations to assist veterans but is misleading the public about how the donations are being used.
The lawsuit alleges that Muhammad operates two nonprofit corporations, Help Homeless Veterans Inc. and Veterans Hope Community House Inc. Together with co-defendants Grover Holstein and Melvin Phipps, Muhammad has solicited donations from the public at several locations in Lima, Kenton and Ada.
"We have determined that the funds being raised under the promise of helping veterans are in fact being used by the defendants to pay personal bills and expenses," Cordray said.
Muhammad allegedly houses people, including some veterans, at a personal residence. The tenants are recipients of government benefits, including Social Security Veterans Assistance, and are charged "rent" of between $240 and $430 per month, Cordray says. If they can't pay, they are forced to leave, he adds.
Although he claims to collect donations for the home, Muhammad allegedly has not made needed repairs at the residence. Allegedly, Muhammad instead has used the rent money and donations to pay for his own personal loans and bills and to compensate Holstein and Phipps for their work in soliciting donations.
"This is a bad situation on several levels," Cordray said. "The conditions inside this home are appalling and hazardous to the residents. Standing water in the basement, exposed electrical wires, rotting carpet, unsafe bathroom facilities and roaches, mice and rats - the place is a mess and we need to shut it down."
Cordray is seeking to shut down Muhammad's house on W. Elm St. and prohibit the defendants from soliciting charitable donations in the state of Ohio.
The Attorney General's Charitable Law section is working with the Veterans Services Office of Allen County to provide housing for the one tenant currently living at the residence.