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Greg Mortenson must pay $1 million to charity

A Montana Attorney General’s office investigation found significant mismanagement of funds by 'Three Cups of Tea' author Greg Mortenson.

By Husna Haq / April 5, 2012

In addition to reimbursing $1 million to the Central Asia Institute – the nonprofit he founded – 'Three Cups of Tea' author Greg Mortenson will also be barred from voting on the CAI's board or holding any position of financial oversight there.

New Mark Communications via the St. Paul Paul Pioneer Press / AP/File

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Nearly a year after a 60 Minutes investigation charged “Three Cups of Tea” author Greg Mortenson fabricated some of the accounts in his beloved bestseller and that his charity mishandled donations, news emerged this week that a Montana Attorney General’s office investigation found significant mismanagement of funds at the author’s nonprofit and ordered Mr. Mortenson to reimburse his charity more than $1 million.

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According to the investigative report, Mortenson spent millions of dollars in charity money on personal items, family vacations, and charter flights. His charity, the Central Asia Institute, was founded to build schools in Pakistan and Afghanistan.

Mortenson “had significant lapses in judgment resulting in money donated to CAI being spent on personal items such as charter flights for family vacations, clothing, and internet downloads,” Montana State Attorney General Steve Bullock said in an announcement Thursday, as reported by CBS News.

Mortenson’s haphazard control of the charity went largely unchallenged by CAI’s board of directors, which consisted of Mortenson and two people loyal to him, according to the investigative report.

“The result was a lack of financial accountability in which large amounts of cash sent overseas were never accounted for,” reports the AP. “Itemized expenses listed as program-related were missing supporting receipts and documentation. Employees and family members charged items such as health club dues and gifts to CAI credit cards.”

Among the financial mismanagement: Mortenson bought thousands of copies of his books, “Three Cups of Tea,” and “Stones into Schools,” from $3.96 million worth of charity money, reaping royalties that he kept for himself.

The report also found the CAI spent $4.93 million on advertising and promoting Mortenson’s books, a figure that was supposed to be split between the CAI and Mortenson, but never was.

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