Former Henderson Councilwoman Kathleen Vermillion faces allegations she misappropriated city funds and donations to her charity, the Nevada Partnership for Homeless Youth, for her personal benefit. Vermillion also reportedly has said that she likely will step down to prevent the charity from being subjected to continuing negative publicity and to address personal health issues.

The complaint, which also alludes to a Vermillion drug test that was positive for methadone, has led to a continuing battle of sordid accusations, including extortion and improper conduct with a child, between Vermillion and Clark County Commissioner Steve Sisolak.

Filed with the Nevada attorney general's office by the charity's interim director, Arash Ghafoori, on Jan. 11, the complaint was obtained by a local television station that revealed the allegations in a Jan. 19 broadcast. State attorney general spokeswoman Jennifer Lopez acknowledged the complaint was filed but declined to confirm an investigation was being conducted, citing office policy.

Vermillion strongly denied wrongdoing in a substantive Jan. 20 conversation with The Henderson Press but declined to go further on record.

"We have a lot of catch-up work to do, because I have not been at the helm of the organization," Vermillion said during a Dec. 15 interview with THP. "Because of the problems we've had with our executive director (referring to Ghafoori), the board has pulled me back in to do the day-to-day operations."

Ghafoori is a business development manager for Las Vegas-based Walker Engineering. He is a member of Engineers Without Borders and Lions Club International. He had been the interim executive director for NPHY since late August but had been placed on paid leave at the time he filed the complaint with the state attorney general's office. Ghafoori declined press comment about the complaint or his relationship with Vermillion and the charity leadership.

Published portions of the complaint contain Ghafoori's assertions that Vermillion donated $10,500 from her city of Henderson discretionary fund to the NPHY and, from there, to the Homeless Youth Foundation, an organization run by Vermillion that supports the charity's financing needs.

Ghafoori stated in the complaint that the donation itself was not improper—$7,500 was later returned to the city—but that Vermillion then used the funds to pay her own salary and other expenses, in effect laundering city money not intended for the direct financial benefit of council members.

Ghafoori's complaint contends Vermillion transferred $340,000 between 2010 and 2011 from the charity to the HYF, allegedly to pay her own salary and other personal expenses.

But a review of independent audits of the charity shows revenue transfer from NPHY to HYF of $330,211 in 2009 as well. The transfer to HYF clearly was labeled as such and designated as Net Cash to Financing Activities.

The complaint also includes documents regarding an early November trip for the charity's staff and major associates to San Diego's Paradise Point Resort & Spa that cost $51,000, including $28,000 for five nights' accommodation in the resort's presidential suite.

The complaint does not appear to include any documentation indicating the resort bill was paid for using charity funds; however, smaller charity purchases totaling $4,400 were made from the resort during the time frame of the trip.

According to other published excerpts, Ghafoori claims a recent drug screening demanded by the board of both he and Vermillion found the synthetic opioid methadone, used for severe pain management, particularly for intractable migraines, and for heroin addiction, in Vermillion's blood sample.

Ghafoori claimed his results were negative. Vermillion responded with a lawsuit filed on Jan. 20 against County Commissioner Sisolak, who recently ended a five-year personal relationship with the former councilwoman, for illegally releasing her medical records.

Sisolak, who denies knowledge of Vermillion's drug test, filed a report with the Las Vegas Metro Police Department on Monday, Jan. 23, claiming Vermillion and her lawyer, Rob Martin, attempted to extort him by threatening allegations of Sisolak's inappropriate conduct toward Vermillion's now-15-year-old daughter.

The county commissioner denied wrongdoing and produced a copy of a Dec. 10 text message allegedly from Vermillion: "When you stop manipulating and using my children, like you have me, then I'll stop. You are in over your head. I can, and will, destroy you. I am the female version of you. But smarter. And my anger only motivates me. Back off. Or else. The Sisolak name will be a shame to them all. All I have to do after Jan. 3 is make the ACCUSATION that you made advancements toward (Vermillion's daughter), and you're done."

Vermillion's lawyer, calling Sisolak's actions a "publicity stunt," countered by denying their demand for $3.9 million was extortion, calling Sunday's conference with Sisolak a settlement negotiation.

"They want to go public, fine. That's what we're doing in response," Martin told a small gathering of journalists packed into a Martin & Allison Law Firm conference room.

Mark Fierro, Vermillion's public relations representative, went on to detail allegations against Sisolak, claiming he attempted to spend an inordinate amount of time alone with Vermillion's minor daughter, taking her shopping and to movies and having her model bikinis for him.

The lawyers played a heavily edited tape of Vermillion's daughter (whose name was clearly displayed on the video but is being withheld by THP, because she is under 18), detailing Sisolak's attention. Martin did stress that no illegal activity by Sisolak is being alleged.

Since the breakup of Sisolak and Vermillion, according to Fierro, "There's been continued contact (between Sisolak and Vermillion's daughter). There's been gifts worth hundreds of dollars, with the recommendation that 'You don't tell your mother.' There's a card that he sends, 'I'm just a phone call away,' to a 15-year-old girl. 'I love you.' The late-night texts ... does that sound like the actions of a reasonable person?"

Fierro ignored reporters' requests to produce the contents of the texts he was referencing.

At Monday morning's press conference, Sisolak called the charges "ridiculous," claiming Vermillion's lawyers were "taking innocent things that any person would do" and twisting them to appear sordid.