The Urban Affairs Coalition (UAC) has initiated a lawsuit in federal court against Karen Nicholson, a software consultant, claiming defamation and the disclosure of trade secrets after she accused the organization of neglecting the oversight of government grant funds.
UAC, which operates homeless shelters and various community programs in Philadelphia, serves more than 50 smaller nonprofits and is now seeking at least $150,000 in damages. The lawsuit, filed on May 5, follows Nicholson’s year-long campaign of online posts and formal complaints alleging she is owed $35,000 for her work, in addition to pay she claims was improperly withheld.
Nicholson, located in Ohio, was contracted by UAC through a third party and asserts she was terminated by that contractor, Jacques Latoison, in August 2023 after she raised concerns about receiving bounced paychecks.
She claims to have uncovered evidence of significant funds being misappropriated by Latoison, alleging he pocketed hundreds of thousands of dollars that should have been paid to her and other employees. Nicholson insists that UAC shares responsibility, as it manages millions in public funding and should have ensured proper allocation of financial resources.
Reflecting on the situation, Nicholson expressed her disbelief that public funds were entrusted to someone with Latoison’s financial history, stating, “It boggles the mind that our tax dollars are given to a tax cheat, and everybody knows it, and nothing can be done.”
In response, UAC spokesperson Anthony Campisi argued that Nicholson’s grievances lie with Latoison, not UAC, and labeled her allegations as unfounded and defamatory.
He called her actions a “smear campaign” based on false information, emphasizing that Nicholson created a website with misleading data and reached out to media outlets in an attempt to spread these assertions.
Latoison, who leads a Delaware software company, did not respond to inquiries regarding the allegations against him.
Nicholson’s decision to target UAC stems from her belief that Latoison lacks funds to compensate her, and because of her close working relationship with UAC executives during her projects. She reported primarily to UAC staff rather than directly to Latoison, which influenced her perception of accountability.
Founded in 1969, UAC holds a significant position in Philadelphia’s nonprofit landscape, acting as a fiscal sponsor for numerous organizations, administering grants, and launching initiatives aimed at community development. UAC recently celebrated its 55th anniversary with a banquet that included dignitaries like Mayor Cherelle Parker and Governor Josh Shapiro.
The coalition, which describes itself as “A Home for Nonprofits,” manages funds and administrative responsibilities for various nonprofits, as well as services related to grant compliance and project oversight for some of Philadelphia’s major institutions.
In the past year, UAC was projected to receive $19.2 million from the city, including funding for homeless shelters and initiatives aimed at violence prevention. In 2021, the organization reported over $144 million in grants and other revenue streams.
However, UAC has faced scrutiny over its financial management in the past, with investigations concluding that it mismanaged $1.5 million in grants, resulting in a funding freeze in 2012.
More recently, UAC became the focus of a federal class-action lawsuit that alleged violations in overtime pay for workers under its oversight, leading to a $380,000 settlement in 2023.
Nicholson’s journey with UAC began in November 2021 when she was hired by Latoison to transfer 20 years of financial data to a new software platform. She claims to have been closely monitored by several UAC executives, although her invoices were directed to Latoison.
Initially, the arrangement progressed without significant issues; however, delays in payment became a concern over time, leading her to seek clarification from UAC staff.
During her inquiry, Nicholson alleged she was informed by UAC’s administrator that Latoison was withholding funds, contradicting his claims of waiting for payments from UAC.
She also reported experiencing wage discrepancies compared to male colleagues, which prompted her to file an EEOC complaint citing discriminatory remarks made by Latoison.
According to Nicholson, when she raised concerns about Latoison’s behavior with UAC officials, she was told that similar complaints had led to previous employees being forced out.
Despite the challenges, Nicholson persevered with her work, logging extensive hours each week, only to have her paycheck bounce in April 2023.
Latoison allegedly attributed the payment issues to ongoing tax compliance difficulties, claiming connections with the IRS to manage funds.
Nicholson revealed that in the years since she began working with UAC, Latoison’s company accrued nearly $4 million in earnings from UAC contracts, much from federal grants.
Despite Latoison’s substantial earnings, he has a documented history of tax evasion, with numerous judgments against him in both Philadelphia and Delaware dating back to 2005.
Nicholson also uncovered billing practices which suggested inflated charges by Latoison, indicating he was significantly overcharging UAC for her labor while underpaying her.
After her contract was terminated, Nicholson turned her attention to legal avenues for recourse, filing multiple complaints and gathering evidence against both UAC and Latoison.
Her grievances reached various agencies including the Delaware Division of Revenue and the Pennsylvania Department of Labor. Although the EEOC did not proceed with her case against UAC, it acknowledged the validity of her employment relationship with the organization.
Nicholson’s mounting frustration has led her to pursue UAC through the Pennsylvania Department of State and to engage with the U.S. Department of Labor about her wage concerns, hoping for investigative support.
As Nicholson continues her efforts, she remains focused on seeking justice and compensation, primarily holding UAC accountable for the treatment she received during her employment.
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