Facts

In 1997, defendant Gerald Buckberg founded the L.B. Research and Education Foundation (L.B.) for the purpose of helping those suffering from physical and mental disabilities. Buckberg served as the charity's director, chief executive officer, and manager. In 2007, the Office of the Attorney General launched an investigation into the donations to the foundation, finding Buckberg had been using them to fund his research and development projects, as well as funding his friends' research.

PLAINTIFF'S CONTENTIONS:
The Attorney General alleged Buckberg was using charitable funds for personal business ventures, in violation of California law. It also contended Buckberg, and five of the charity's officers, had engaged in self-dealing, and breach of their fiduciary duty.

DEFENDANTS' CONTENTIONS:
Buckberg and the foundation denied any wrongdoing.

Result

The parties reached a settlement whereby Buckberg must return $140,000 of diverted funds to the charity. Defendants were also required to reimburse the Attorney General's office $73,000, for attorney fees and costs. Buckberg is also prohibited from using grants or other funding to directly or indirectly support research by L.B.'s officers and directors. L.B. must also report any grant awards in the future.