Michelle Knuttila, founder of HiCaliber Horse Rescue, poses for a portrait at her Valley Center ranch on March 2, 2018. (Megan Wood/inewsource)
Michelle Knuttila, the founder of the nonprofit HiCaliber Horse Rescue, spent thousands of donor dollars intended for rescuing and rehabilitating horses on late-night fast-food and bar tabs, mobile phone spy technology, Weight Watchers and other purchases from October 2013 to March 2015, according to financial documents provided to inewsource.
The money came out of one of HiCaliber’s PayPal accounts, an online payment system the Valley Center nonprofit used to solicit donations from around the U.S. and other countries.
Charities like HiCaliber must use all of their funds “in furtherance of its charitable purpose,” said nonprofit attorney Paul Dostart. Some of Knuttila’s purchases, such as restaurants and bars, may be legitimate, Dostart said.
But, he said, “If I were the attorney general or IRS … my first question is: How did this late night fast-food and bar tab relate to carrying out the company’s business?”
inewsource obtained HiCaliber’s PayPal transactions from San Diego County under a public records request. The data covered a nearly 18-month period and showed donor names and emails, vendor information, and account balances. The county said it forwarded the records to the District Attorney’s Office shortly after receiving them.
A spokesman for interim District Attorney Summer Stephan declined to comment or confirm an investigation of HiCaliber.
The Valley Center horse rescue is embroiled in allegations of fraud and animal abuse. Critics allege the nonprofit’s funds are being used for Knuttila’s personal expenses, and horses are being excessively euthanized without a veterinarian’s involvement. At least 10 local and state agencies are involved in investigating the nonprofit.
The Attorney General’s Office has prohibited HiCaliber from engaging “in any activity for which registration is required, including solicitation or disbursing of charitable assets” until it submits its 2016 financials to the state. The horse rescue’s PayPal account also is currently frozen.
Knuttila did not respond to an inewsource request for comment, but on March 2, inewsource interviewed her at the HiCaliber ranch. She was asked: “Are you, or have you ever, misused donor funds for your own personal gain or enrichment?”
“No,” Knuttila said.
”Not a dollar?” a reporter asked.
“No. No,” she said.
Detailed transactions
The PayPal records detail transaction dates, times, methods of payment and account balances; addresses and names of vendors; and identifiable donor information, including donation amounts. Most of the expenditures appear to be for items such as hay, veterinary bills and purchasing horses. In all, according to the records, HiCaliber spent more than $90,000.
The records show trips to sushi spots and Starbucks in Escondido, four months of payments to Weight Watchers International, purchases at Barnes & Noble and a payment to SMS SPY, a company that specializes in mobile phone spy technology.
“To be eavesdropping on people’s telephone conversations, there are a multitude of criminal statutes that deal with that,” Dostart said. “Holy cow, that’s bad.”
More than $1,600 in cash also was withdrawn from ATMs, including one on El Cajon Boulevard in San Diego on a Thursday morning in October 2014.
Though Knuttila did not respond to email and phone requests for comment from inewsource, she did go on Facebook Live Thursday to address this story and its findings. She said the spyware was installed on her own computer to catch a board member stealing documents; that she mistakenly used the company debit card for Weight Watchers payments but reimbursed the organization afterward; and that restaurant charges were for taking out volunteers for appreciation.
Knuttila added that “the paper trail is solid” and explains the reimbursements.
“I have no fear whatsoever with any of the allegations being made. I’m not going to make an apology for taking volunteers to dinner. I’m not going to make an apology for taking another organization out for drinks to ask what works for you.”
HiCaliber has a strong social media presence and raises money through Facebook donations, PayPal, Venmo, sales of merchandise and a variety of other avenues both online and in-person.
Local and state agencies investigating HiCaliber include the California Veterinary Medical Board and Attorney General’s Office, the San Diego County District Attorney’s Office, the Inland Valley Humane Society and the Ontario Police Department.
In addition, three former board members told inewsource they never saw HiCaliber’s financials during their tenure. One submitted a complaint to the Internal Revenue Service. Another, a veterinarian, is working with the California Veterinary Medical Board in its investigation.
The Society for the Prevention of Cruelty to Animals Los Angeles visited HiCaliber on Jan. 2 and “closed their case after finding no evidence of animal cruelty or neglect,” according to emails obtained under the state’s public records law.
HiCaliber is bringing in more horses each week while at the same time trying to obtain a county permit that requires 100 or fewer horses on the property.
The county has observed that HiCaliber is “not taking steps to reduce the number of animals,” according to emails.
NOTE: This story was updated at 4:30 p.m. on March 15, 2018, with comments from Michelle Knuttila about the PayPal expenditures.
inewsource is a nonprofit, nonpartisan newsroom dedicated to improving lives in the San Diego region and beyond through impactful, data-based investigative and accountability journalism.
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Below is a breakdown of staffing data at inewsource. We determine the composition of our staff by asking them to self-identify. It is based on a newsroom of 11 and a total staff of 15 as of August 2020. Percentages are based on 15 total survey responses. The numbers include full-time and part-time staff, full-time fellows and full-time and part-time interns.
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Newsroom Percentages are based on 15 completed survey responses to this question.
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Gender Identity
Gender Identity
Gender Identity
Women
80%
Women
82%
Women
75%
Men
20%
Men
18%
Men
25%
Sexual Orientation
Sexual Orientation
Sexual Orientation
Straight
87%
Straight
82%
Straight
100%
LGBTQ-identifying
7%
LGBTQ-identifying
7%
Not specified
7%
Not specified
7%
Speak a language beyond English at home
33%
Speak a language beyond English at home
18%
Speak a language beyond English at home
75%
Race/Ethnicity
Race/Ethnicity
Race/Ethnicity
White
67%
White
73%
White
50%
Hispanic or Latinx
20%
Two or more races
18%
Hispanic or Latinx
50%
Two or more races
13%
Hispanic or Latinx
9%
Age
Age
Age
20-29
40%
20-29
45%
20-29
25%
30-39
47%
30-39
45%
30-39
50%
60 or older
13%
60 or older
9%
60 or older
25%
* The percentages in the charts have been rounded and may not add up to 100.
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inewsource is a nonprofit organization, whose legal name is Investigative Newsource. It does business as inewsource. The business was incorporated on Aug. 4, 2009 in the state of California. Tax-exempt status as a 501c3 was granted by the IRS on Sept. 15, 2010. inewsource is funded primarily by individual contributions and foundation grants. We are guided by a board of directors.
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Lorie Hearn is the chief executive officer, editor and founder of inewsource. She founded inewsource in the summer of 2009, following a successful reporting and editing career in newspapers. She retired from The San Diego Union-Tribune, where she had been a reporter, Metro Editor and finally the senior editor for Metro and Watchdog Journalism. In addition to department oversight, Hearn personally managed a four-person watchdog team, composed of two data specialists and two investigative reporters. Hearn was a Nieman Foundation fellow at Harvard University in 1994-95. She focused on juvenile justice and drug control policy, a natural course to follow her years as a courts and legal affairs reporter at the San Diego Union and then the Union-Tribune.
Hearn became Metro Editor in 1999 and oversaw regional and city news coverage, which included the city of San Diego’s financial debacle and near bankruptcy. Reporters and editors on Metro during her tenure were part of the Pulitzer Prize-winning stories that exposed Congressman Randy “Duke” Cunningham and led to his imprisonment.
Hearn began her journalism career as a reporter for the Bucks County Courier Times, a small daily outside of Philadelphia, shortly after graduating from the University of Delaware. During the decades following, she moved through countless beats at five newspapers on both coasts.
High-profile coverage included the historic state Supreme Court election in 1986, when three sitting justices were ousted from the bench, and the 1992 execution of Robert Alton Harris. That gas chamber execution was the first time the death penalty was carried out in California in 25 years.
In her nine years as Metro Editor at the Union-Tribune, Hearn made watchdog reporting a priority. Her reporters produced award-winning investigations covering large and small local governments. The depth and breadth of their public service work was most evident in coverage of the wildfires of 2003 and then 2007, when more than half a million people were evacuated from their homes.
Laura Wingard is the managing editor at inewsource. She has been an editor in San Diego since 2002, working at The San Diego Union-Tribune, KPBS and now inewsource. At the Union-Tribune, she served in a variety of roles including as enterprise editor, government editor, public safety and legal affairs editor, and metro editor. She directed the newspaper’s award-winning coverage of the October 2007 wildfires and the 2010 disappearance of Poway teenager Chelsea King. She also oversaw reporting on San Diego’s pension crisis.
For two years, Wingard was news and digital editor at KPBS, overseeing a team of four multimedia reporters and two web producers. She also was the KPBS liaison with inewsource and collaborated with inewsource chief executive officer and editor Lorie Hearn on investigative work by both news organizations.
Wingard also worked at the Las Vegas Review-Journal as the city editor and as an award-winning reporter covering the environment and politics. She also was the assistant managing editor for metro at The Press-Enterprise in Riverside. She earned her bachelor’s degree at California State University, Fullerton, with a double major in communications/journalism and political science.
Brad Racino is the assistant editor and a senior reporter at inewsource. He has produced investigations for print, radio and TV on topics including political corruption, transportation, health, maritime, education and nonprofits.
His cross-platform reporting for inewsource has earned more than 50 awards since 2012, including back-to-back national medals from Investigative Reporters and Editors, two national Edward R. Murrow awards, a Meyer “Mike” Berger award from New York City’s Columbia Journalism School, the Sol Price Award for Responsible Journalism, San Diego SPJ’s First Amendment Award, and a national Emmy nomination.
In 2017, Racino was selected by the Institute for Nonprofit News as one of 10 “Emerging Leaders” in U.S. nonprofit journalism.
Racino has worked as a reporter and database analyst for News21; as a photographer, videographer and reporter for the Columbia Missourian; as a project coordinator for the National Freedom of Information Coalition and as a videographer and editor for Verizon Fios1 TV in New York. He received his master’s degree in journalism from the University of Missouri in 2012.
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Brad Racino is the assistant editor and senior investigative reporter at inewsource. He's a big fan of transparency, whistleblowers and government agencies forgetting to redact key information from FOIA requests.
Brad received his master’s degree in journalism from the University of Missouri...
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