'Weak': DOJ fraud charges against SPLC use an unusual legal theory

The Justice Department announced with great fanfare a series of fraud charges against a storied civil rights group that has angered conservatives in recent years. But the unusual nature of the charges could present challenges in court, especially for a department already under fire for targeting the president's opponents and critics.

Acting Attorney General Todd Blanche alleged at an April 21 news conference that the Southern Poverty Law Center, a decades-old Alabama nonprofit dedicated to dismantling white supremacy, defrauded donors by using their money to pay informants within white supremacist groups.

"The SPLC was not dismantling these groups," Blanche said at the news conference. "It was instead manufacturing the extremism it purports to oppose by paying sources to stoke racial hatred."

While the accusations are stark, the evidence presented publicly so far, which is contained in a 14-page indictment, doesn't make clear that the SPLC intentionally defrauded donors, according to many former prosecutors.

"Paying informants to then dismantle the organization seems like something that people would expect to be one of the tactics that are used, so that seems like a very weak case to me," Amy Markopoulos, a former federal prosecutor who spent years in the DOJ's fraud section, told USA TODAY.

What's more, conservative animus towards the SPLC, which has labeled some prominent conservative groups "extremist," has heightened concerns that the DOJ may be unfairly targeting the civil rights group in unconstitutional ways.

"This prosecution sends a clear message: If you want to be spared, shut up," Stacey Young, who was a senior attorney in the civil and civil rights divisions of the Department of Justice for over 18 years, told USA TODAY. Young now runs Justice Connection, which combats what it sees as threats to the rule of law under the Trump administration.

In a statement to USA TODAY, DOJ spokesperson Natalie Baldassarre said the grand jury that indicted the Southern Poverty Law Center on 11 counts only heard a portion of the evidence, and the government remains confident in its case.

"It’s a shame that these former prosecutors aren’t aghast at these allegations of severe fraud, manufactured racism, and abuse of donor dollars," Baldassarre said when asked about the criticism by the former Justice Department officials.

The SPLC began working with informants to uncover evidence of racist violence such as bombings of Black churches, SPLC interim president and CEO Bryan Fair said in a statement shared with USA TODAY.

Fair said his organization shared information with the FBI over the last 40 years that saved lives, and it strongly denies the criminal allegations.

"The government is blatantly mischaracterizing our efforts to successfully fight hatred and violent extremism, something we have done for decades," he said. "At one moment, they are appreciating our work in destroying the Klan and now, they are saying the SPLC funded and promoted the Klan."

'I've never seen anything like it'

Most of the criminal counts against the SPLC involve alleged wire fraud – the main charge emphasized by Blanche at the press conference.

Those counts accuse SPLC of seeking donations to "dismantle" violent extremist groups, without telling donors that some of the donations – more than $3 million over nine years – would be used to pay high-level leaders of such groups to be informants.

The indictment also says donors weren't told that some donations were used to benefit violent extremist groups and were used in committing state and federal crimes, such as an informant stealing and copying documents from a neo-Nazi group.

But one of the elements of wire fraud – meaning one of the things the DOJ must prove to win its wire fraud case – is that SPLC intended to defraud its donors.

Multiple former prosecutors told USA TODAY the indictment is short on that evidence.

"I've never seen anything like it," said Kyle Freeny, a former DOJ prosecutor who focused on money laundering and asset recovery.

"My biggest concern about the charge is that it purports to let DOJ decide whether the means by which a nonprofit is pursuing its objectives actually serves those objectives," Freeny said.

"That is really quite an extraordinary amount of power to give the Department of Justice, especially when we're talking about nonprofits, whose objectives may be in some cases in tension with the objectives of any given administration," she said.

Brian Morris, a former federal prosecutor in New York who focused on fraud and money laundering, said nearly all wire fraud prosecutions involve defendants who misappropriate assets for their own personal gain. In those cases, prosecutors often easily find evidence to demonstrate fraud – such as pocketing money or paying for personal items.

The case against SPLC – with the government claiming SPLC siphoned money from anti-extremism donors and then used funds to support extremism – looks very different, he said.  

"It’s likely going be much more difficult for the government to succeed under its nuanced theory than in a classic case," Morris added

Still, Chad Mizelle, who served as the DOJ's Trump-appointed chief of staff from January to October 2025, said wire fraud can be committed through a direct lie or through a material misstatement.

"I have a hard time believing that if any corporate donor knew of the activities – of what was actually happening with their donor dollars – that they would have signed off and been okay with it," Mizelle said.

Allen Mendenhall, an Alabama-based lawyer and research fellow at the conservative Heritage Foundation, said complaints about the lack of a deceitful, smoking-gun statement by the SPLC in the indictment ignore that cases are built around behavior, structure, and context, and that the DOJ's investigation is, according to Blanche, ongoing.

"In real-world fraud cases, especially those involving organizations, misconduct isn't just one clean, isolated statement. It's a pattern: how money moves, how things are described publicly, how actions line up with all those descriptions," Mendenhall said.

"What case is a slam dunk? We're all kind of in a wait-and-see posture at this point," he added.

Money laundering

The indictment also charges the SPLC with conspiring to conceal money laundering through how the organization allegedly paid informants – by transferring donated funds to bank accounts in the names of fictitious entities such as "Fox Photography" and "Tech Writers," and by masking direct payments to informants with similar monikers, according to the court documents.

But the indictment states that the money laundering crime occurred, in part, because there was wire fraud. Several ex-prosecutors told USA TODAY that means if the wire fraud case falls apart, so will the money laundering charge.

"The money laundering allegation is entirely dependent upon there being a viable fraud allegation," Stefan Cassella, a former federal prosecutor who focused on asset forfeiture and money laundering, told USA TODAY.

False statement charges also face challenges

Multiple ex-prosecutors said a set of remaining false statement charges – which allege the SPLC had an employee claim sole ownership of fictitiously named bank accounts that were used to pay informants – appears stronger.

"You can't lie to the bank to gain access to the U.S. financial system using fictitious companies that hide your identity," Morris said.

But even here the prosecution faces potential problems, such as needing to prove the statements were meant to influence the bank's actions, according to Freeny.

"If the statements were made for another purpose – for the purpose of protecting the informant, so that folks around the informant didn't know they were receiving money from the Southern Poverty Law Center – that would not, in my view, meet the elements of the offense," she said.

Legitimate scrutiny or politics?

Some SPLC critics say the allegations of funding extremism are unsurprising given what SPLC has publicly done, including featuring what the critics see as mainstream conservative and Christian groups, such as the late Charlie Kirk's Turning Point USA, in reports on hate and extremism. Those moves, critics say, have generated more donations for SPLC and more polarization for the country.

"The Southern Poverty Law Center's entire business model is predicated on the spread of hatred. If there is no more hatred and hatred's not spreading, then they have no business model," Mendenhall told USA TODAY.

But for many liberals, the center's willingness to sharply criticize Trump administration allies in particular is reason to be skeptical of the case.

SPLC is being prosecuted "simply for having the audacity to call the President’s loyal shock troops who stormed the Capitol on January 6 white nationalists and domestic terrorists,” House Democrats Jamie Raskin, D–Maryland, and Mary Gay Scanlon, D–Pennsylvania, wrote in a joint April 30 letter to DOJ officials seeking documents on the prosecution.

Unfair prosecution?

It's traditionally very hard to successfully challenge a criminal indictment based on the idea that the defendant has been unjustly targeted. Still, some ex-prosecutors think that kind of challenge – alleging the case is vindictive or that SPLC has been selectively targeted – is on the table here.

Already, Justice Department lawyers have faced those types of challenges in a range of prominent cases since Trump returned to the Oval Office, including when charges were brought against former FBI Director James Comey, New York Attorney General Letitia James, and Salvadoran immigrant Kilmar Abrego Garcia.

Earlier indictments against Comey and James were dismissed for a separate reason, before judges could rule on their vindictive-and-selective prosecution challenges. Comey, who was recently indicted on new charges, plans to again raise that challenge, according to comments his lawyer reportedly made in court April 29. In Abrego Garcia's case, a federal judge said Oct. 3 that there is a "realistic likelihood of vindictiveness."

It's unclear exactly how the investigation into the SPLC arose and unfolded.

"We know that this investigation was opened during the Biden administration and then mysteriously closed," Acting Attorney General Todd Blanche said on Fox News' The Ingraham Angle show. "I really don't have any information about why it was closed, and then we started again last year."

The Justice Department declined to comment beyond Blanche's response about what prompted re-opening the investigation.

But criticisms of the SPLC by administration allies have raised concerns for outsiders. Billionaire Elon Musk, who spent hundreds of millions of dollars helping Trump get elected and played a key role in firing federal workers in mass early in the current administration, has repeatedly complained about the Southern Poverty Law Center on social media.

"The SPLC is an evil organization that spreads hate propaganda relentlessly. It needs to be shut down," Musk posted on X Oct. 2.

Markopoulos said she expects SPLC will file a challenge that quotes such statements to argue this was a targeted prosecution.

"Those cases are generally really hard to prove, but this may be the environment where (the SPLC is) going to get some judges to really take stock of that," Markopoulos said.

It's also possible SPLC will challenge the fairness of the grand jury process that led to the indictment. Already, it's asking for the transcript of the grand jury proceedings that led to the indictment, saying evidence suggests the grand jury was misled.

That's an allegation that was already coming up in the previous indictment against Comey, which was dismissed after a judge concluded the prosecutor who secured the indictment was unlawfully appointed.

Before that decision came down, another judge expressed concerns about whether the grand jury that indicted Comey was given accurate information, writing that two statements to the jurors "appear to be fundamental misstatements of the law." The judge decided Comey should have access to the grand jury materials because potential irregularities could justify dismissing the case.

Mendenhall said looking at other DOJ prosecutions to assess what the DOJ has done in SPLC's case could be misleading.

"To start picking one case and comparing it to another case and trying to develop some sort of pattern just muddies the waters," he said. "It distracts from what are actually the facts in this particular case."

But Cassella said the Trump administration has opened itself up to questions about the propriety of indictments it brings by expressing that political retribution is a goal.

"That undermines the ability to get a conviction. It undermines your credibility with the public. It undermines your credibility with judges and juries," Cassella said.

"And that's the problem the Justice Department has right now, and it's tragic," he added.