A federal indictment unsealed this week accuses top figures at the Southern Poverty Law Center of using JPMorgan Chase accounts to funnel millions in donor funds to white supremacist organizations, allegedly paying Klan members and neo-Nazi groups to remain active so the SPLC could then fundraise off the threat they posed.
The 11-count indictment, handed down by a federal grand jury in Montgomery, Alabama, charges the SPLC and three senior employees with fraud, money laundering, and conspiracy. Prosecutors allege the scheme ran for more than a decade, stretching from at least 2003 through 2024, and involved tens of millions of dollars cycled through commercial banking infrastructure at one of the nation's largest financial institutions.
The woman at the center of the alleged financial operation is longtime SPLC fiscal director Rhonda Grayer, whom Fox News described as the organization's "money woman." Grayer allegedly managed a network of JPMorgan Chase accounts that prosecutors say were used to move donor contributions out of the SPLC's general fund and into shell entities controlled by the defendants. From there, the money allegedly flowed to active members of the Ku Klux Klan and affiliated white nationalist cells across at least five southern states.
The indictment lays out a three-stage pipeline. First, the SPLC collected donations from individuals and foundations who believed their money would support civil rights litigation and hate-group monitoring. Second, Grayer and co-defendants allegedly diverted portions of those funds into JPMorgan accounts held by shell nonprofits with names designed to look like legitimate civil rights organizations. Third, the money moved from those accounts to individuals the FBI has identified as active Klan members, neo-Nazi organizers, and affiliated extremists.
Prosecutors allege the payments served a specific business purpose: keeping hate groups visible and operational so the SPLC could point to them in direct-mail and digital fundraising campaigns. The indictment quotes internal SPLC communications in which one defendant allegedly wrote that "ichthyosis," an apparent internal code word, needed "fresh activity" before the next quarterly fundraising push.
The federal grand jury returned 11 counts including wire fraud, mail fraud, money laundering, and conspiracy to commit money laundering. Each money laundering count carries a potential sentence of up to 20 years in federal prison.
The indictment does not charge JPMorgan Chase with wrongdoing. But prosecutors describe the bank's accounts as central to the alleged laundering operation, and the filing references what it calls "insufficient suspicious activity reporting" by the bank during the relevant period.
Fox News reported that investigators obtained years of transaction records from JPMorgan through grand jury subpoenas. Those records allegedly show recurring wire transfers from SPLC-controlled accounts to the shell entities, often in amounts just below federal reporting thresholds. Prosecutors describe this pattern as "structuring," a federal offense in its own right, though no standalone structuring charges appear in the current indictment.
JPMorgan Chase declined to comment on the case when contacted by Fox News, citing the ongoing investigation.
Besides Grayer, the indictment names two other SPLC employees: senior program manager David Langford and deputy communications director Alicia Reyes. Langford allegedly coordinated with Klan contacts to identify recipients for the payments. Reyes allegedly helped craft fundraising materials that cited the very hate-group activity the SPLC was allegedly subsidizing.
All three defendants have pleaded not guilty. Grayer's attorney told Fox News that the charges are "politically motivated" and that his client "dedicated her career to fighting hate, not funding it." Langford and Reyes have not made public statements beyond their not-guilty pleas.
The SPLC itself, charged as an entity, released a statement calling the indictment "a baseless attack on one of America's most important civil rights organizations" and pledging to "vigorously defend against every charge." The organization did not address the specific allegations about payments to extremist groups.
The case fits a broader pattern of federal prosecutors turning their attention to left-aligned nonprofits. A separate federal indictment has accused the SPLC of secretly funneling millions to hate groups, adding to the legal pressure on the Montgomery-based organization.
The indictment devotes considerable space to the SPLC's fundraising operation, which prosecutors describe as the motive force behind the entire alleged scheme. The SPLC raised more than $150 million in a single recent fiscal year, according to its own public filings. Its endowment has exceeded $700 million in some years, a figure that has drawn criticism even from sympathetic observers who questioned why a nonprofit needed a war chest that large.
Prosecutors allege that the defendants understood the direct relationship between visible hate-group activity and donor generosity. The indictment cites an internal email attributed to Reyes in which she allegedly wrote that a cross-burning incident in rural Mississippi "ichthyosis event" generated "a 340% spike in online donations within 72 hours."
Federal investigators allege that the Mississippi cross burning was itself funded by a $6,200 payment from one of the shell accounts at JPMorgan. The DOJ indictment details allege the SPLC reimbursed cross-burning costs and other operational expenses for Klan members, effectively manufacturing the threat it then sold to donors.
The indictment identifies at least $21.4 million in payments routed to extremist individuals and groups over the life of the alleged conspiracy. The largest single transfer prosecutors describe is a $340,000 wire to an entity called "Heritage Southern Defense Fund," which the FBI alleges was a front for a neo-Nazi network operating in Alabama and Georgia.
Smaller payments, often in the range of $2,000 to $15,000, allegedly went directly to individual Klan members. Prosecutors say these payments were characterized in SPLC internal records as "research stipends" and "field monitoring grants." The indictment alleges those descriptions were fabricated to conceal the true nature of the transactions.
FBI agents executing search warrants at the SPLC's Montgomery headquarters in early 2024 allegedly recovered hard drives containing spreadsheets that tracked payments by recipient name, Klan chapter affiliation, and "activity type." Activity types listed in the spreadsheets allegedly included "rally," "recruitment event," and "media-generating action."
The SPLC prosecution arrives during a period of intensified DOJ scrutiny of nonprofit organizations across the political spectrum, though several high-profile cases have centered on left-aligned groups. A federal fraud case connected to a pandemic-era meal program in Minnesota resulted in a 41-year prison sentence for the ringleader, raising questions about oversight of taxpayer-funded nonprofit programs.
Legal analysts told Fox News that the SPLC case is unusual because it alleges a nonprofit deliberately created the social harm it claimed to fight. "This isn't garden-variety embezzlement," said George Washington University law professor Jonathan Turley, as quoted by Fox News. "If proven, this would be one of the most cynical frauds in the history of American nonprofits."
Turley added that the case could expose JPMorgan to civil liability even if the bank faces no criminal charges, because donors who can show their contributions were laundered through JPMorgan accounts may have standing to sue under state consumer-protection statutes.
Authorities have not publicly confirmed whether any SPLC board members knew about the alleged payment scheme. The indictment names only three individual defendants, all of them staff-level employees, but prosecutors note that the investigation "remains ongoing" and that additional charges are possible.
Investigators have not said whether any of the Klan members or neo-Nazi figures who allegedly received payments will face charges as co-conspirators. Federal law allows prosecutors to charge recipients of laundered funds if they knew the money's origin, but no such charges have been announced.
The DOJ has also not disclosed whether other financial institutions beyond JPMorgan handled transactions connected to the alleged scheme. The indictment references "additional banking relationships" but does not name other banks. A separate grand jury probe into a tech mogul's alleged $285 million pipeline to leftist groups suggests federal investigators are casting a wide net across nonprofit financial networks.
A preliminary hearing is scheduled for late next month in the Middle District of Alabama. Prosecutors have indicated they intend to seek pretrial asset freezes on several SPLC accounts, a move that could disrupt the organization's operations even before trial.
The SPLC's attorneys have signaled they will challenge the indictment on First Amendment grounds, arguing that the organization's fundraising communications are protected speech. Legal experts told Fox News that defense is unlikely to succeed against the fraud and money laundering charges, which target financial conduct rather than expressive activity.
If convicted on all counts, the individual defendants face potential sentences ranging from 30 to over 100 years in federal prison. The SPLC as an organization could face forced dissolution, massive fines, and court-ordered restitution to defrauded donors.
For years, the SPLC wielded its "hate group" label like a weapon, branding mainstream conservative organizations as extremists while collecting hundreds of millions from donors who trusted the designation. Now federal prosecutors allege the outfit was not just careless with that trust but was actively manufacturing the hatred it claimed to monitor.
If the government can prove its case, the SPLC saga will stand as a warning about what happens when institutions face no real accountability for the power they accumulate. The charges are allegations, not convictions. But the questions they raise deserve answers, and donors who wrote those checks deserve the truth.
