The ACE Foundation has filed a lawsuit in California Superior Court against Commonwealth Bank of Australia (CBA) seeking the return of $2.53m in ACE Foundation funds being held in Australia.
The suit by ACE Foundation, an IRS-certified, tax-exempt non-profit organization, contends that its funds are being held wrongfully in Australia.
The court action requests a jury trial in the U.S. to force the return of the funds, plus damages, so that the money can be used to continue the foundation’s mission and complete initiatives in progress since the organization was founded in May 2014.
The foundation’s suit rebuts allegations that ACE’s engagement with two CBA IT employees was meant to be hidden from CBA, or was part of a secret plot in years past to win corrupt contracts for a bank vendor.
The ACE Foundation has been under the direction of its founder/CEO, Andrew Goldstein, since he founded the organization in May 2014. ACE is a 501(c)(3) that has been awarded IRS tax-exempt status for its charitable mission, and operates in full compliance with rigorous reporting and governance rules.
As illustrated in the lawsuit, ACE has an independent board of directors and employs internal staff and a wide range of contractors in the U.S. and abroad in service of an ambitious slate of goals and projects.
The ACE Foundation received its initial donation from Eric Pulier, a prominent entrepreneur and frequent contributor to philanthropic causes and non-profit organizations for decades.
The ACE Foundation suit provides clarity that because of his responsibilities as an executive overseeing customers and operations across more than a dozen countries, as well as numerous pre-existing obligations to ventures and non-profit organizations and boards, Pulier was not expected to have, nor did he have, any involvement in running The ACE Foundation. ACE’s lawsuit points to evidence– in documents, activities, interviews, official filings and timelines– that make it clear that Pulier’s donation into ACE was intended solely to further its charitable mission.
Further, the lawsuit refutes the intimation that ACE’s mission, goals or projects are in any way related to CBA, Pulier, or entities associated.
ACE’s suit contends that the foundation’s funds were never hidden and ACE acted properly at all times. According to the lawsuit, ACE deployed its project budgets and consulting fees with openness and transparency in a manner that guaranteed the bank’s review and scrutiny, depositing the funds into CBA’s own accounts, in accordance with all applicable rules and regulations.
The suit points to evidence that ACE’s project budgets were not only put into CBA itself, but also placed in the true names of the employees intended to run the projects, with their consulting organizations called out on supporting documentation as intended agents for the deliverables.
The suit goes on to detail how all actions from ACE were deliberate and purposeful, and how ACE’s actions are consistent with its understanding that the bank was fully aware and in approval of the engagement. ACE’s suit explains that a small portion of the funds, $100,000, were targeted for the consultants and the remainder was set forth appropriately in accordance with professional accounting advice for budgeted project expenses. The suit also contends that the intent of the consulting and the projects are evidenced in numerous forms, including statements-of-work and invoices that reference purpose, goals and supporting documentation.
According to The ACE Foundation suit:
"ACE’s mission is to apply next-generation technology to the most pressing challenges facing economically distressed populations and developing nations. For example, ACE’s ‘Project LiQuid’ seeks to develop a system to improve the distribution of drinking water in impoverished communities. To fulfill its mission, ACE engages consultants with technology experience to build its reusable technology and systems and to assist ACE in developing projects and initiatives. Two of the earliest consultants ACE engaged were Jon Waldron and Keith Hunter, IT employees of CBA. ACE understood that CBA had permitted its two employees to help ACE.
"From May through December 2014, ACE advanced funds to Waldron and Hunter to cover project costs they would incur for ACE. ACE advanced the funds based on professional tax advice it received. ACE was advised that donations it received in 2014 were potentially taxable because ACE would not have its tax exempt status by the end of the year, so it would be prudent for ACE to expend funds in 2014 for known projects to minimize charitable dollars being lost to taxes. Far from being secret payments, ACE advanced funds to Waldron and Hunter to their respective bank accounts at CBA.
"In late December 2014, ACE learned that CBA was taking a position that it did not approve of Waldron and Hunter assisting ACE. Upon learning this, ACE informed Waldron and Hunter that they no longer could assist ACE and requested that they return the funds advanced by ACE. ACE redirected the work to be done by Waldron and Hunter to other consultants.
Waldron and Hunter agreed to return the advances to ACE. CBA knew this, but prevented Waldron and Hunter from returning ACE’s money. CBA threatened to sue Waldron and Hunter if they returned ACE’s money.
When Hunter informed CBA that he was returning ACE’s money to ACE, CBA made false allegations to the Australian police that the payments were illegal secret payments, even though the payments were made into accounts at CBA. The Australian police froze the accounts of Waldron and Hunter, preventing them from returning ACE’s money.
As a result of CBA’s interference with ACE’s relationship with Waldron and Hunter, ACE has been deprived of over $2.5 million, critical funds needed by ACE to fund its projects. ACE brings this action to recover its money that it lost due to CBA’s intentional and wrongful interference with ACE’s contractual relationship with its consultants."
As plaintiff in the lawsuit, the ACE Foundation "seeks a money judgment for general, special, consequential, punitive, exemplary and other damages in an amount to be proven at trial" versus CBA. The action also seeks payment of attorneys’ fees, court costs and interest on its funds being held by CBA.