(COLUMBUS, Ohio) — Summer Rays Inc., a sober-living charity whose operators violated their fiduciary duties and exploited residents for their own personal gain, is closed for good, Ohio Attorney General Dave Yost announced today.
The shutdown stems from a 2018 lawsuit filed by the state against Charles (Chuck) Kirk, director of both Summer Rays and Reynoldsburg Revolve Church (RRC), and various family members. A receiver recently completed the court-ordered work of dissolving both nonprofits.
“This is more than just a philanthropy pitfall,” AG Yost said. “Chuck Kirk used his absolute control over the finances of Summer Rays and RRC to rip off the individuals he claimed to want to help. Charities are not to be confused with family businesses.”
Kirk controlled more than two dozen Summer Rays properties, mostly in Franklin County, many of which were used to house about 100 recovering drug users and alcoholics. Residents were required to pay a weekly “program” fee ranging from $100 to $150, abstain from using alcohol and illegal drugs, and attend weekly meetings and church services.
But there was no requirement for residents to attend formalized counseling or develop an individualized plan for leaving the program. Kirk socialized with residents and inserted himself into their personal and professional lives in ways that would not be considered appropriate for a sober-living facility. In addition, many residents lived in unsanitary and inhospitable conditions, and some residents were subjected to harassment by Kirk.
While operating Summer Rays and RRC, Kirk and his family also ran several side businesses – including Rev Cafe, located inside RRC – that relied on Summer Rays residents for staffing. Instead of tracking residents’ hours and issuing paychecks, Kirk often paid them with cash or a reduced program fee.
Simply put, Kirk took advantage of the residents, using intimidation and indoctrination to control them.
Board members of both Summer Rays and RRC – many of whom were Kirk’s relatives – failed to exercise proper oversight of Kirk. They rarely held board meetings, did not review financial reports or officer compensation, and permitted Kirk to exercise complete control over finances and operations of the charities.
Kirk and others involved in his scheme – including his wife; two adult daughters; and his sister, his cousin and his aunt, who were also board members – breached their fiduciary duties by failing to look out for the best interests of the residents of Summer Rays and by unlawfully benefiting personally from the charitable status of Summer Rays and RRC.
The Kirk family lived in a house paid for by Summer Rays. And two of Kirk’s daughters lived rent-free in Summer Rays houses – without Summer Rays residents or programming – while attending college at Kent State University and Capital University.
A Franklin County judge entered several orders against the scheme participants that required most of the defendants to pay a combined $50,000 in restitution and civil damages. The orders also imposed a combined $40,000 in civil penalties against several defendants who provided false and misleading information.
The civil penalties go to the Charitable Law Section of the Ohio Attorney General’s Office, which uses the money to fulfill its charitable oversight duties. The damages will be redistributed as grants for charitable purposes.
After the court orders were entered against Kirk and his family members, the receiver continued working to close down Summer Rays. As a result of the Attorney General’s lawsuit and the receiver’s work, secured creditors received more than $642,000 on multiple mortgage loans and local governments received more than $527,000 in overdue real estate taxes. More than $248,000 is available to pay wage-and-hour claims and damages to former Summer Ray’s employees, including exploited residents. And the Attorney General’s Office recovered more than $107,000 to be redistributed to support charitable programming in the areas of sober living and/or mental health and addiction services.
Kirk is permanently banned from directly or indirectly creating or working for a nonprofit in Ohio.
