Attorney General’s Office halts HiCaliber’s fundraising, spending for failing to file tax docs
HiCaliber Horse Rescue, a Valley Center nonprofit embroiled in allegations of fraud and animal abuse, can no longer raise or spend money until it submits proper financial disclosures to the state.
The California Attorney General’s Office sent HiCaliber a letter Friday stating the nonprofit is considered “delinquent” for failing to submit federal and state tax forms for 2016. Both account for revenue and assets, and allow the state Justice Department to ensure donations are not “misapplied and squandered through fraud or other means.”
Paul Dostart, an expert in nonprofit law and a partner with La Jolla-based Dostart Hannink & Coveney, read the letter and told inewsource “it’s effectively a standstill order” until HiCaliber gets its paperwork on file.
“It’s not unheard of to be delinquent if you are a first time filer,” Dostart said. “But this is not even their first delinquency.”
The Attorney General’s Office sent HiCaliber a similar letter last year for failing to file disclosures for 2013.
HiCaliber’s founder, Michelle Knuttila, texted inewsource Sunday night that she’s “human and dropped the ball.”
“It’s already being addressed/handled by our attorney and CPA. An honest mistake,” she said.
HiCaliber’s financials
HiCaliber has been a nonprofit since 2013 and its practices provoke extreme reactions – loyal support to outrage – among horse enthusiasts around the world. Knuttila is its tough-talking, unapologetic founder and most public persona.
Read the first story in this investigation by clicking here. Photo courtesy HiCaliber
The nonprofit solicits donations from people through social media and online fundraisers. It also has corporate sponsorships, adoption and training fees, and several additional methods of income. Knuttila told inewsourceHiCaliber earned “probably just under” a million dollars in revenue last year, though no public paperwork exists to show that.
Knuttila’s weekly trips to an Ontario livestock auction to fundraise for the rescue and rehabilitation of horses meant for slaughter can net the organization thousands of dollars from supporters who praise her methods. Critics question where the money goes because HiCaliber often euthanizes horses shortly after purchase due to a variety of alleged physical ailments or behavioral issues.
“It is within our right to euthanize every horse here without a reason,” Knuttila told inewsource on Friday during a visit to HiCaliber’s ranch. “They’re our property. If the organization decides to euthanize that horse, that is our right. It’s our property. I don’t have to have a vet say, ‘I recommend it for euthanasia.’”
inewsource was unaware of the attorney general’s letter during Friday’s interview but did ask Knuttila about the organization’s funds.
“I know about the financials as far as the day-to-day,” Knuttila said, “but the files and the CPAs and all that type of stuff, I generally stay away from all that.”
HiCaliber Horse Rescue ensnared in allegations of animal cruelty, fraud
Horse enthusiasts from across the country are accusing HiCaliber Horse Rescue, a Valley Center nonprofit, of animal cruelty and fraud based on first-hand accounts and the organization’s social media posts. Local and state authorities are looking into the allegations.
The woman who runs the nonprofit, Michelle Knuttila, is a proud, tough-talking and foul-mouthed former animal control officer who describes herself as “a smart business woman” who has “built an empire.” She denies any wrongdoing and told inewsource on Tuesday her critics “have turned this into a witch hunt.”
“I’m saving more horses than half of these people combined,” Knuttila said of her detractors – many of whom run rescue operations in Southern California.
At issue is HiCaliber’s main practice: The group purchases horses from an Ontario livestock auction every Tuesday with money raised via Facebook, PayPal, Venmo and other online avenues. Knuttila says the money – which can amount tothousands of dollars on auction day – goes toward the rescue or rehabilitation of the equines.
According to allegations lodged with the county, Knuttila ends up killing many of them with a .22-caliber rifle shot to the head. The method is legal in California and considered humane by the American Association of Equine Practitioners – if the horse is a hopeless case at rehabilitation, in chronic pain or unmanageable.
“If you have a problem with me euthanizing a suffering horse, you need to check your moral compass, not me,” Knuttila said. “We’re only euthanizing horses we can’t fix that have no quality of life, but they want to live in a fantasy land where these horses have endless homes and green pastures.
“Euthanasia is still rescue,” she said.
Michelle Knuttila sits on a horse in this undated image. Photo courtesy HiCaliber
HiCaliber sent inewsource an email Tuesday with its rescue, adoption and euthanasia numbers for 2017. The group says it:
- Rescued 463 horses (including auction saves, shelter transfers and owner relinquishments).
- Placed 152 with adoptive families and 17 with other organizations (rescue or sanctuary).
- Helped facilitate 128 private purchases.
- Euthanized 81, of which 28 were “compassion pulls” – described as horses taken “knowing they were already in grave/critical condition and reasonable veterinary intervention could not offer a decent quality of life.”
Those who closely follow HiCaliber’s social media channels calculate the number of horses destroyed in the past year to be approximately 100.
HiCaliber’s critics, which number in the thousands based on a review of online petitions, social media channels and blogs, have raised questions about Knuttila’s fundraising practices. Some have been following HiCaliber for years.
Several said they have filed complaints with the Federal Trade Commission – which “protects consumers by stopping unfair, deceptive or fraudulent practices” – or met with representatives from the California Attorney General’s Office, which oversees nonprofits in the state.
Neither agency would confirm an open investigation.
“There are very, very strong opinions against the organization,” said Cindy Gendron, manager of the Homes for Horses Coalition – a national group of professionals based in Virginia that promotes the welfare and protection of horses. It recently severed ties with HiCaliber due to “differences in philosophy.”
“They also have a huge following of people that are strongly behind them,” Gendron said of HiCaliber, “but they also have a large contingent of people that would love to take them down.”
San Diego County authorities asked the Los Angeles Society for the Prevention of Cruelty to Animals to look into the allegations after fielding multiple complaintsfrom the public. The county turned to an outside agency because of a conflict of interest – Knuttila previously worked for the county’s Animal Services Department.
County spokesman Michael Workman said this week the L.A. nonprofit’s investigation found nothing wrong with HiCaliber and won’t be issuing a report. A spokeswoman for the Los Angeles animal welfare group, however, told inewsourceit is “not the lead on this investigation or its components,” and declined to comment further.
Workman said county inspectors did make site visits to HiCaliber and found “nothing major.”
He said the county is working with HiCaliber to reduce the number of horses on its property. HiCaliber has more than 150 and any amount greater than three requires a permit.
“Our job is to get people into compliance. It’s not to shut people down,” Workman said of county code compliance and environmental health authorities.
Knuttila spoke openly about all the government agencies that show up at her ranch.
“Every day I open the door and I’ve got a new uniform at the door,” she said. “Come on in. Want me to pee in a cup? Accuse me of doing ketamine? Let’s do it. The only reason these government agencies are doing this is they’re getting harassed.”
But, she said, she feels “the noose tightening” more every day.
“They’re going to find something I’m doing wrong, and they’re going to take it right down to the letter of the law just to appease these people who are calling. I know it’s coming. I’m not stupid.”
Adrienne Moore, a Fallbrook veterinarian who has followed HiCaliber’s practices, said she’s “disgusted” with the county, the SPCA and the Humane Society “because they aren’t upholding their duties,” when it comes to Knuttila.
Moore has watched videos that Knuttila posts of the horses before euthanizing them.
“She’s making a lot of wrong diagnoses and shooting a lot of horses that, in the right hands, would be fine,” Moore said. “It’s absolutely disgusting.”
A spokeswoman for the California Veterinary Medical Board told inewsource on Monday the agency is investigating HiCaliber and could be looking at unlicensed activity, scope of practice issues or standard of care issues. Knuttila said the veterinary board told her everything was fine.
As of late February, a partial list of agencies confirmed to be involved in examining HiCaliber include: San Diego County’s Department of Environmental Health, Vector Control Program, Code Enforcement and Sheriff’s Department; the Los Angeles Society for the Prevention of Cruelty to Animals; Inland Valley Humane Society; Valley Center Fire Prevention District; and California Veterinary Medical Board.
People interviewed for this story said they’ve also made contact with the Riverside County District Attorney’s Office; San Bernardino County District Attorney’s Office; California Attorney General’s Office; and the U.S. Federal Trade Commission.
A divisive business model
Knuttila said she suffered a traumatic brain injury when she fell in 2010 while working for San Diego County Animal Services. Life as she knew it stopped, she wrote in her online bio, and she lost her career, marriage, home and ability to mother her children. “The only thing I knew about myself was horses,” she wrote.
“They get me. I get them. We don’t have to converse about what we are doing. It’s merely a dance … and I get to pick the music.”
When the county denied Knuttila’s claim for a service-related disability retirement, citing conflicting evidence of her brain injury, the 39-year old had already founded HiCaliber. The IRS granted the organization its nonprofit status in 2013, and Knuttila’s mission, along with co-founder Romney Snyder, was to “rescue and rehabilitate equines” and “find them new, loving homes.”
A few years later, HiCaliber was calling itself “the nation’s most active horse rescue.”
The nonprofit buys horses every Tuesday from a livestock auction house in San Bernardino County about 80 miles north of Valley Center. Among the animals for sale are pigs, goats, sheep, cows and horses.
Knuttila and staffers from HiCaliber go to Ontario and broadcast live videos from the site to raise money for bidding. Fundraising on Facebook alone netted them $2,900 one Tuesday afternoon this month.
It’s unknown how much money comes in from other sources, which include at least four separate PayPal accounts, Venmo, a HiCaliber Coffee Club, a “Secret Fund,” GoFundMe fundraisers, mailed checks, corporate sponsorships and a private buyer’s page. HiCaliber also sells branded clothing, coffee mugs and other schwag, and asks for payments to be sent to supply stores or other related businesses. This is in addition to the organization’s adoption fees and training programs.
Thousands of Facebook comments flood HiCaliber’s page on auction days. Almost all are positive. The post is filled with hearts and thumbs-up signs, along with pledges of financial support.
The organization is a social media, public relations and fundraising powerhouse. Its Facebook page boasts more than 50,000 followers – referred to as its “village.” Knuttila told inewsource HiCaliber’s operations cost around $65,000 a month.
HiCaliber hasn’t filed disclosures with the IRS or Attorney General’s Office for a couple of years. Knuttila said the group filed an extension to give one of its officers time to grieve over the loss of a child. The nonprofit’s most recent paperworkshows it brought in about $290,000 through donations, adoption fees and training in 2015.
Once horses are purchased at auction, they’re given a “freedom walk” on camera and the online “village” rejoices. The animals are then hauled south to the Valley Center ranch and examined further.
Knuttila’s critics say she frequently diagnoses horses that exhibit a limp or strange behavior as needing euthanasia. Knuttila said a vet makes those decisions, not her.
“My duty is to the horse to stop that suffering. … I would say 95 percent of the time the veterinarian is involved,” she said.
Knuttila said that when she started HiCaliber, “I had no clue that I was going to be the angel of death. But when I have phone calls all day, every day, with horses that can’t walk and are literally dying a slow death – bones falling out their hooves – I’m gonna turn a blind eye? F–k that s–t.”
Critics among colleagues
More than 1,600 people from around the world have signed an online petition in the past month demanding “a county/state full investigation” into HiCaliber.
inewsource interviewed three owners of nonprofit rescue operations that have adopted HiCaliber horses in San Diego, Los Angeles and Riverside counties. All alleged instances of abuse to the animals and fraud and deceit by the nonprofit.
Rhiannon Huppert was a veterinary assistant in Texas before she moved to Escondido and opened ResSolution Stables, a private homestead facility. She said she adopted horses from HiCaliber for about two years.
What drew her to HiCaliber, Huppert said, was its entire staff appeared to “really care” about the horses.
“They didn’t have much horse knowledge, but they had a lot of heart,” she said.
During that time, Huppert said, she witnessed several “shady deals” at auctions, including an arrangement with a known “kill buyer” – someone who buys horses at auction to send them to slaughter in Mexico.
Knuttila said she doesn’t know if the person is a kill buyer and she doesn’t care.
“My alliance is to the horses, and I will befriend anyone I have to to get these horses safe,” she said.
Huppert also claimed to have seen “a lot of lies and deceit” regarding fundraising practices, including fake backstories and donations that weren’t going toward animal care.
But, she told inewsource, “It was in May 2017 that really killed me.”
Huppert recalled driving through HiCaliber’s property to pick up a horse for a client. She said she spotted Knuttila, sitting on her porch, dissecting two horse legs she had chopped off after killing the animal following a fundraising event.
Knuttila acknowledged that HiCaliber often performs necropsies on horses – ”I want to know why the horse died” – but that it was her farrier who performed the examination. A farrier is a craftsman who trims and shoes horses’ hooves.
Critics of HiCaliber point to online photos and videos across YouTube and Facebook as evidence of what they consider outrageous behavior by Knuttila.
She is unapologetic. “You want me to be professional? Not gonna happen,” Knuttila said. “I’m going to be efficient and effective.”
One video shows Knuttila cooking and eating horse testicles in her kitchen. Another from January is a tirade about shooting horses, laden with f-bombs and threats against her critics.
inewsource asked Knuttila if she ever felt she had gone too far, either in a video or with her practice.
“Nope. When I look at the amount of suffering and amount of horses we have saved and impacted, I haven’t gone far enough,” she said.
Knuttila’s raw, no-nonsense style has won her fans among some horse enthusiasts. HiCaliber sells lunch bags, thongs, shot glasses and T-shirts emblazoned with the phrase “Eat a Dick” and coffee mugs that read “Eat my Horseballs.”
To her critics, Knuttila’s behavior is horrifying.
“Something absolutely needs to be done. It’s just gotten to that point,” said Ann Kline, who was a veterinary technician for 27 years and owns a rescue and rehabilitation organization called Mea Ola’s Place in the San Bernardino County desert community of Phelan.
“For a couple years, I looked up to them. I really did,” Kline said. “Until I finally figured out what was really going on.”
She said she realized that HiCaliber was “making a sob story out of all these horses” to fundraise, and then killing them – even though other rescue organizations, such as hers, are willing to adopt them.
Knuttila doesn’t deny this happens. She told inewsource it’s her right “to do what I want to do with my horses.”
“I’m not putting an animal who’s suffering and has no quality of life out into the community,” she said. “The goal is not adoption. The goal is to end suffering.”
Kline said she cut ties with HiCaliber because of potential legal issues if government agencies got involved. She said she knows the group has been reported to authorities.
“When they go through all those records, they may want to talk to me and I don’t want to be involved,” she said.
Vera Valdivia, who runs Love This Horse Equine in the Los Angeles County community of Acton, echoed Kline’s concerns.
Valdivia said she took two horses from HiCaliber that were to be euthanized. Typically, she said, “If I take a horse, fundraise and sign it over to another rescue, the donation to the horse follows. I give it to the other rescue (group). That wasn’t done.”
Sherri Morris with S&S Finally Loved Horse Rescue in the Riverside County community of Cherry Valley said she recently took seven horses from HiCaliber. One had been with HiCaliber for 45 days.
“Her coat was matted to her body. We had to shave it off,” Morris said. “She still had the auction halter tied to her head.”
Despite the criticism, Knuttila said the overall horse community supports her methods – “and obviously they love us.”
inewsource spoke to her while she was attending Tuesday’s auction in Ontario. The horses surrounding her, she said, “are lucky if they get slaughtered. If they get caught in the Mexican rodeo, that’s a whole other problem.”
“How many horses are here right now?”
She counted them while on the phone.
“Six horses are here and I bought one. Where are the rescues to get the other five?”
Strong reaction to inewsource report on HiCaliber Horse Rescue
Web traffic on the story shows it has reached readers in all 50 states and more than 40 countries.
We are continuing to pursue multiple angles on this story and toured the HiCaliber ranch on Friday with its founder, Michelle Knuttila. She defends her business model and contends she uses the legal practice of euthanizing rescued horses by gunshot only when a horse is suffering and beyond treatment.
“If you watch what happens to them when they get sold off to the Mexican rodeos, this is not the worst thing that can happen to them if they’re euthanized,” Knuttila said. “Death is not the worst thing. There are so many other things waiting for these poor animals out there. And why everyone is focused on the euthanasia of it — I could set my sights on simply going to auction and buying them to euthanize every single one and it would still be kinder than what waits them across the border.”
Knuttila’s critics are vocal and include former HiCaliber volunteers. They have filed complaints about her and HiCaliber with the California Attorney General’s Office and Federal Trade Commission. At least six agencies are looking into allegations against HiCaliber, including the San Diego County Sheriff’s Department and California Veterinary Medical Board.
Volunteers on Friday spoke highly of both their experience over the past few years at the ranch and of Knuttila. Even more praised the rescue operation through emails, recalling positive experiences adopting and fostering HiCaliber’s horses.
As inewsource is vigorously reporting this story, we encourage you to reach out to us. If you’ve had an experience with HiCaliber — good or bad — email us at hicaliber@inewsource.org.
A horse peeks through a fence on the property of HiCaliber Horse Rescue on March 2, 2018. (Brandon Quester/inewsource)
Michelle Knuttila, founder and board member of HiCaliber Horse Rescue in Valley Center, shows reporters around the property on March 2, 2018. (Brandon Quester/inewsource)
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