Diverted Funds

General funds, donor advised funds, and endowment funds contributed to Vanguard Public Foundation were diverted to activities related to the investment scheme instigated by Mouli Cohen and further perpetuated by Vanguard’s President, Hari Dillon. Due to the lack of accessible foundation records, many donors remain unaware that their philanthropic intentions were not honored. Funds

Reviving Progressive PhilanthropyDiverted Funds

If you are a donor who:

  • Contributed to Vanguard Public Foundation between 2003 – 2008;
  • Had a donor advised fund during that period;
  • Contributed to the endowment prior to that time, 

We would like to hear your story. Many donors have experienced disbelief, anger, and a feeling of betrayal at discovering the misuse of their donations. The Vanguard Justice Community has organized a series of individual meetings and group gatherings to provide donors, grantees, board members, staff, and allies with an opportunity to share their experiences and move beyond mistrust. Despite the loss of funds, the Vanguard Justice Community believes the process of reconciliation and healing can help revive progressive philanthropy in the Bay Area.iverted 

If you would like more information on how you can join in this process, please contact us at marco@vanguardjustice.org.

General Fund

Between 2003–2008, donors to Vanguard’s general fund continued to send checks or donate stock for what they believed would translate into grants or program work for social justice causes. Unbeknownst to them, the Foundation had been transformed from a social justice funder to a high-risk investment house, with Vanguard staff working primarily on administrating the ever more complex tasks involved with the ongoing fraud.

Susannah Schwartz, the Chief Operations Officer was kept busy updating and sending investment schedules to the growing number of investors who were necessary to perpetuate the scheme. Vanguard’s longtime CPA was fired and replaced with Gail Webb, who in addition to preparing and sending out investment documents to Vanguard-associated investors, had also put money into the scheme. Vanguard’s President Hari Dillon, was in almost daily contact with Mouli Cohen, the instigator of the scheme, and was preoccupied with raising millions of dollars in response to the constant demands for “fees and bonds.”

Checks that were sent to the Foundation were cashed, but where did the money go?

During the 2009 meeting of the Vanguard Board of Directors, Dillon confessed that all funds had been spent on “overhead.” Despite reneging on promised grants, Dillon had continued to pay staff—and himself—to administer the investment work of the multiple Dillon Groups and create the illusion that Vanguard was still a functioning foundation.

If you have donated to Vanguard’s general fund and would like to join our process of reconciliation and healing, please email us at marco@vanguardjustice.org.

Donor Advised Funds

To encourage giving, especially when individuals encounter financial windfalls or need help making decisions on where to direct their charitable contributions by the end of the tax year, Vanguard administered donor-advised funds for future distribution by its donors. These funds were supposed to be held in segregated accounts so the Foundation could provide account balances to donors.

Once major donor funds became tied up in the investment scheme—as a result of Mouli Cohen’s and Hari Dillon’s persuasive endeavors—Vanguard ceased to have adequate general operating funds to function.

At this point, Dillon chose to ignore his fiduciary responsibilities and dipped into the donor advised funds for operations that he deemed were necessary to create the illusion that nothing was awry at the Foundation.  

Grant letters went out to grantees, but in most cases, the checks never arrived. 

Individuals with donor advised funds did not receive financial statements listing their grants, so often they were unaware that their funds were being diverted for other purposes. It was not until grantees contacted donors informing them of missing grants that donors discovered that their grants were not awarded. Foundation records that would show whether grants were distributed remain unavailable, making the task of restitution and reconciliation all the more difficult.

If you had a donor advised account at Vanguard and would like to join our process of reconciliation and healing, please email us at marco@vanguardjustice.org.

Endowment Fund

As a member fund of the Funding Exchange, a national network of foundations committed to funding grassroots organizations working for social justice, Vanguard subscribed to the value and political importance of institutionalizing a local progressive source of funding to support grassroots organizing and to strengthen social justice movements. By 1995 Vanguard’s endowment had grown to approximately $1.5 million. Funds were managed conservatively to protect the corpus—a standard operating procedure for foundations with permanently restricted funds.

Although Vanguard President Hari Dillon has insisted that no Vanguard funds were invested in the Mouli Cohen scheme, he has not explained fully the evaporation of funds that occurred during his tenure. On April 2, 2004, Dillon wired $800,000 from his account to Cohen for a side bet on one of Cohen’s companies, which was intended to solely benefit Vanguard. Dillon took Cohen’s word that the money would double in just three to four months. 

In closing arguments at Cohen’s trial, the government’s lawyer related Dillon’s desperation to get these “Vanguard funds” back to the Foundation in November 2004—an attempt that proved futile.

As mandated by law, endowment donors must be consulted in writing before endowment gifts are to be used for any purpose other than a restricted fund whose corpus is to remain intact. Vanguard endowment donors were not approached nor notified of the use of the endowment corpus.

If you have donated to the Vanguard endowment and would like to join our process of reconciliation and healing, please email us at marco@vanguardjustice.org. 

If you know any of these donors below, please encourage them to contact us.

Jane Baker

Richard & Martha Baker

Alvin H. Baum, Jr.

Linda Belden & Donald Ohlen

Laura & Phil Benedetti

Obie Benz

Chela Blitt

Andrew Bundy

Kimo Campbell

Alex Chasin

Susan Clark

Laurie Cohen

Stephen Cohen

Katharine Cole

Lin Yeiser Coonan

Diana Dillaway

David Olsen

Domitila Barrios de Chungara


Jim Eitel, M.D.

Bob Friedman & Kristina Kiehl

Ellie Friedman & Jonathan Cohen

Tracy Gary

Paul Haible

Adam Hochschild

James C. Hormel

Elly Huber

Penny Gerbode Jay

Dennis Jennings

Ayse Kenmore

Andy Kivel & Susan Goldstein

Paul Kivel & Mary Luckey

Sukey Lilienthal & David Roe

Supporters of Eugene “Bear” Lincoln

Sidne J. Long

Jan S. Marks

David Matchett & Carol Snow

Rob McKay

Paulette Meyer & David Friedman

Tom Meyer & Julie Stevenson

 Sam & Mary Mills

Stephen Moody & Ann Helwege

Susanna Moore

Jill Nelson

Nathan M. Ohrbach Foundation

Daisy and David Paradis

Willie Pettus

Christine Russell & Mark Schlesinger

Jonathan Saiger & Libby Anne Russler

Charles Savitt

Margaret Schink

Rebecca Lilienthal Schnier

Tom Silk

Patricia Silver

Tania Stepanian

Peter Stern & Holly Bagley Stern

Judith Stronach

Tani Takagi & Toby D’Oench

Harrison Voigt, Ph.D

Leonie Walker & Kate O’Hanlan, M.D.

Mal Warwick

Betsy Weedon

Patty Wolfe

Leslie Wozniak


Where are Vanguard’s funds?

General funds were spent on administration of the multiple Dillon Groups, the investment entities that Hari Dillon, Vanguard’s President, had created to process millions of dollars that were poured into the fraudulent scheme.

Donor advised funds were raided and likewise used for unapproved activities. Grants due social justice organizations went unpaid, but staff working on investment activities continued to draw salaries throughout this period.

Vanguard’s Endowment Fund, which at one point reached $1.5 million, was also raided and a significant portion may well have been invested in the fraudulent scheme.