Convicted Felon Paid By Animal Charity to Smear Its Critics Amid FBI Investigation And Kidnapping Plot
May 1, 2026
When animal lovers and other donors gave generously to Dedication and Everlasting Love to Animals (D.E.L.T.A. Rescue) to support the care and well-being of the animals on its sanctuary, they were likely unaware that their donations might be used to try to silence the charity’s critics instead. CharityWatch has recently uncovered information in D.E.L.T.A. Rescue’s bankruptcy filings showing that it paid blogger Frank Parlato, publisher of the online blogs, The Frank Report and Artvoice, a total of $80,000 for “contract services” and “consulting” between June and August of 2025. Those payments coincided with a series of articles attacking CharityWatch, its CEO Laurie Styron, and Adriana Duarte, a former employee of D.E.L.T.A. Rescue who had recently won a discrimination lawsuit against the charity resulting in a $6.7 million legal judgment.
Even more shockingly, D.E.L.T.A. Rescue’s founder and president, Leo Grillo, was recently arrested after an FBI investigation revealed that he allegedly plotted to kidnap the same former employee rather than pay the court-ordered judgment, according to a March 4th, 2026 press release from the United States Attorney’s Office for the Central District of California (U.S. AG CA). Federal prosecutors allege that after a jury awarded Duarte millions in damages, later reduced to $2.9 million, Grillo sought to have her abducted and transported to Mexico where, “While in confinement, she would be forced to cooperate with Grillo to settle the litigation,” according to the press release.
The U.S. AG CA’s press release also indicated that the alleged scheme, which involved discussions of payments totaling up to $100,000 to effectuate the kidnapping, included at least one payment made by check from a nonprofit entity connected to Grillo. This raises serious concerns that charitable funds may have been used in furtherance of the plan. The plot was ultimately uncovered through an FBI sting operation. If proven, these actions suggest not only an effort to avoid financial accountability, but a willingness to escalate from reputational attacks to far more extreme measures to silence the charity’s critics.
CharityWatch Exposes $2.5 Million in Missing Donations at D.E.L.T.A. Rescue
In April of 2025, nearly a full year before Grillo’s arrest, CharityWatch published an article entitled CharityWatch Investigates: Millions in Missing Donations and a $6.7 Million Legal Judgment Against Large Animal Sanctuary. The article exposed D.E.L.T.A. Rescue’s network of related charities, including D.E.L.T.A. Rescue, Living Earth Productions (LEP), and Horse Rescue of America (HRA), which all share the same three officers or directors, as well as significant financial transactions among them. During our analysis of these organizations’ 2022 and 2023 IRS Form 990 tax filings, we found that D.E.L.T.A. Rescue reported cash grants to its related organizations those years amounting to an aggregate of more than $2.5 million to LEP alone. The problem? LEP’s tax filings did not reflect that it ever received the funds.
In March of 2025 CharityWatch asked Grillo what person or organization is in possession of the more than $2.5 million in donated funds. He claimed that Living Earth Productions has the funds, but provided no evidence in public IRS tax Form 990 filings, or to CharityWatch directly, proving that the funds were actually transferred to Living Earth Productions or to any other charity. He also stated that “If there was a mistake on the 990 I am not surprised,” but indicated he had no intention of changing the charity’s accounting practices, filing amended tax forms, or providing evidence of what happened to the money.
Retaliation Against CharityWatch
In his articles, published on his websites The Frank Report and Artvoice, Parlato referred to D.E.L.T.A. Rescue’s $2.5 million in unaccounted for donations as a “clerical error” and “petty accounting discrepancies,” while making a series of accusations against CharityWatch and its leadership that are demonstrably false and misleading. He asserted that CharityWatch (which was founded in 1992 when its current CEO, Laurie Styron, was only a teenager) is a “one-woman organization,” with “a staff of one,” despite it having a full-time staff and 5-person board of directors who are publicly disclosed on charitywatch.org and in public filings. Parlato questioned CharityWatch’s legitimacy and claimed that its charity rating methodology is unknown, even though its rating process is clearly published on charitywatch.org as well as in every issue of its biannual Charity Rating Guide & Watchdog Report.
Parlato also attacked Styron’s qualifications, claiming multiple times that she is “not an accountant.” Styron holds a Bachelor of Science in Accounting degree, has more than 25 years of accounting experience, and currently serves on the Illinois CPA Society’s Not-for-Profit Organizations Committee and on the audit committee of the Investigative Reporters and Editors (IRE) organization. She is regularly consulted by journalists throughout the country for her expertise in nonprofit accounting, reporting, and governance. Parlato also alleged that Styron has been charging charities for consulting fees through an unrelated business while leading CharityWatch. This is a clear conflict of interest that is not only untrue, but appears designed to discredit CharityWatch’s independence and credibility.
Parlato did not reach out to CharityWatch or to Styron directly for fact checking prior to publishing the posts, nor did he appear to have performed so much as a cursory check of CharityWatch’s website for information about its staff, board, charity rating methodology, or other relevant information that is easily accessible on its site.
The Frank Report and Artvoice articles and $80,000 in payments from D.E.L.T.A. Rescue to Frank Parlato started occurring only after CharityWatch brought public attention to the animal charity’s $2.5 million in unaccounted-for donations and serious governance concerns. While CharityWatch does not yet have direct evidence, such as invoices, emails, text messages, or other communication records establishing the precise purpose of the payments, the timing and context certainly give the appearance that donor funds were used to finance retaliatory smear campaigns against its critics.
Retaliation Against Discrimination Victim
CharityWatch appears to not be the only one retaliated against for speaking out against Grillo and D.E.L.T.A. Rescue’s practices. During the same time period that the $80,000 in payments from the charity to Parlato occurred, a series of articles critical of Adriana Duarte also appeared on The Frank Report and Artvoice websites. In November of 2024 a jury awarded $6.7 million to Duarte, a former employee of D.E.L.T.A. Rescue, who alleged wrongful termination and discrimination related to her pregnancy. Grillo is currently appealing the case (Duarte Valentines v. Dedication and Everlasting Love to Animals, Case No. 21STCV01322, Cal. Super. Ct. Los Angeles County, filed Jan. 12, 2021).
According to the Judgment, the jury found that Duarte was paid lower than the legal overtime compensation rate for the hours she worked; that her “sex, gender, pregnancy, and/or national origin” was a “substantial motivating reason” for the charity’s decision to terminate her; and that D.E.L.T.A. Rescue engaged in “retaliatory conduct” that was “a substantial factor in causing harm” to Duarte. Specifically, the jury found that Duarte proved “by clear and convincing evidence that Leo Grillo engaged in conduct with malice, oppression, or fraud in committing one or more violations.”
Grillo, who told CharityWatch in an email last year that he could not comment directly on the case he is appealing, pointed CharityWatch to the Frankreport.com website, saying that an article posted there was reflective of his views on the matter. During Grillo’s deposition he accused Duarte of stealing supplies from his charity, referring to her as a “bimbo” and a “lettuce picker,” according to the article. “You don’t want to tell an obese woman that she looks pregnant,” Grillo stated, according to the article, in reference to rumors of Duarte’s pregnancy that had been floating around the sanctuary. In response to the question, “Did D.E.L.T.A. Rescue prove that they had a good-faith belief that Adriana Duarte Valentines was stealing at the time they decided to terminate her?” all 12 jurors responded “No.”
FBI Sting & Grillo’s Subsequent Arrest
As described in a federal criminal Complaint, filed March 3rd, 2026, in the U.S. District Court for the Central District of California (United States v. Leo Grillo, No. 2:26-MJ-01215-DUTY), federal authorities allege that Grillo’s actions recently escalated well beyond reputational attacks. According to the Complaint, after Grillo’s charity, D.E.L.T.A. Rescue, lost the discrimination lawsuit and was facing a multi-million-dollar judgment, Grillo allegedly began using coded language to discuss a plan with one of his business contacts to have Duarte kidnapped and transported to Mexico. Grillo allegedly instructed this contact to, according to the Complaint, do whatever was necessary “to make the woman cooperate,” thinking he could “convince her to settle the lawsuit against him.” Only, unbeknownst to Grillo, his would-be co-conspirator had turned into a cooperating witness for the FBI in an undercover operation.
According to the U.S. AG CA’s press release, prosecutors allege that Grillo communicated in coded language to the cooperating witness, referring to the kidnapping plot as a “’documentary’ in which the woman who defeated him at trial would be kidnapped along with a family member and for them to be held hostage in Mexico. While in confinement she would be forced to cooperate with Grillo to settle the litigation. He also said he would be willing to pay $100,000 to make that happen and that he wanted her child and she to be flown out of an airfield in Lancaster [California].”
In February of 2026, according to the press release, Grillo mailed a $20,000 check from one of the nonprofits he operates called Animals Are People Too, based in Nevada, “and confirmed that he wanted to get the victim on the airplane to Mexico, where her husband and she would be held hostage.” The U.S. AG CA’s criminal Complaint includes a copy of another check for $10,000 from Living Earth Productions, another of Grillo’s charities based in Nevada, dated March 3rd, 2026. Grillo had been told by the FBI’s cooperating witness, according to the Complaint, that these additional funds were needed to pay for a flight to effectuate the kidnapping.
“’I’ve got a lot of smokescreens,’ to conceal the kidnapping plot, including ‘the movie, make a documentary about this whole thing,’” Grillo told the cooperating witness, according to the Complaint, which also reflects Grillo musing “about what he would say ‘if I ever get busted on this by the Feds.’”
The stated mission of one of Grillo’s charities, Living Earth Productions, is “Video development, production & distribution-Documentary instructional, and feature project development, production and distribution. Projects are to increase global awareness of the plight of animals…” according to its 2024 IRS tax Form 990. Given the nature of the charity’s stated mission, Grillo’s suggestion that he would make a “documentary” as a smokescreen to attempt to throw off the suspicion of law enforcement is not implausible.
The alleged kidnapping plot raises serious concerns that charitable resources may have been used in furtherance of criminal activity. The 77-year-old Grillo faces up to 20 years in prison if he is found guilty of the allegations outlined in the Complaint.
Convicted Felon: Frank Parlato, Jr.
In addition to presenting himself as a “media strategist, publisher, and legal consultant,” Frank Parlato also refers to himself on his website as an “investigative journalist.” Yet, the content of his articles is inconsistent with basic standards of journalistic practice, including objectivity, fact-checking, and transparency regarding financial relationships that create conflicts of interest. Rather than presenting balanced or independently verified reporting, the articles read as agenda-driven attacks that omit context, contain easily disprovable factual errors, and fail to disclose financial relationships that bear directly on the credibility of the claims being made.
CharityWatch reviewed several months of D.E.L.T.A. Rescue’s bank statements in an effort to better understand how Grillo was distributing the funds his charity raised from donors. We obtained the statements as part of D.E.L.T.A. Rescue’s Chapter 11 bankruptcy case filed with the United States Bankruptcy Court for the Central District of California. The bank statements reflect three payments made by D.E.L.T.A. Rescue to Frank Parlato between June and August of 2025. The first, dated June 30th, 2025, was in the amount of $20,000 for “Contract Services.” The subsequent two, one for $40,000 and the other for $20,000, were categorized as “Consulting” and were dated July 3rd, 2025 and August 7th, 2025, respectively.
The $80,000 in payments Frank Parlato received from D.E.L.T.A. Rescue in the summer of 2025 coincided with the same time period in which he published his series of articles on his websites, The Frank Report and Artvoice, attacking CharityWatch, its CEO Laurie Styron, and Duarte. The articles contained no disclosure indicating that Parlato had a financial relationship with D.E.L.T.A. Rescue or Grillo.
These concerns about credibility and transparency are further underscored by Parlato’s own history with federal financial crimes charges. In 2015 Parlato was federally indicted on multiple felony counts, including “conspiracy to defraud the United States and certain members of the public, to obstruct the function of the Internal Revenue Service, wire fraud and wire fraud conspiracy, [and] money laundering,” among other charges, according to a November 20, 2015 press release from the U.S. Attorney’s Office for the Western District of New York. The charges were based on allegations that Parlato engaged in a complex scheme involving numerous legal entities and approximately 50 bank accounts to conceal income and interfere with tax administration.
In the federal indictment, prosecutors alleged that Parlato received $1 million for services, directed that the funds be routed through a shell entity he controlled to conceal their source and ownership, and failed to timely report that payment as income. When he eventually filed a tax return, according to the indictment, he characterized the $1 million as a loan rather than income. In other words, the issue was not simply a missed filing requirement, but the alleged concealment and mischaracterization of a substantial payment that was not properly reported as taxable income.
Over time, prosecutors narrowed the case and ultimately did not pursue many of the original allegations. Parlato later resolved the matter by pleading guilty to a federal tax offense, “Willful Failure to File Returns Involving Cash Transactions of More than $10,000,” according to a Judgment filed in the U.S. District Court for the Western District of New York (No. 1:15-cr-00149) in August 2023. According to the Judgment, Parlato was required to serve five months of electronically monitored home detention and subject himself to one year of supervised release. According to an August 5, 2022 IRS press release, “As part of his plea, Parlato will pay $184,939.51 to the IRS. He will also forfeit approximately $1,000,000 that was seized by the government in 2015.”
It is important to note that criminal charges can be dropped or narrowed for many reasons, including evidentiary hurdles, legal strategy, witness availability, or prosecutorial discretion. The dismissal of some of the charges does not necessarily mean that the underlying conduct did not occur or that the individual was affirmatively found innocent of them.
Convicted Felon: Richard Luthmann
On September 9th, 2025, CharityWatch received an email in its contact inbox addressed to the attention of its CEO, Laurie Styron. It was from an associate of Parlato’s, Richard Luthmann, another convicted felon, who copied Parlato on the communication. In the email he referred to himself and Parlato as “journalists.” The email questioned CharityWatch’s legitimacy and Styron’s credentials, falsely accused CharityWatch of not publishing its charity rating methodology, and included leading questions such as, “How do you address accusations that CharityWatch manufactures scandals to solicit donations for itself?” (CharityWatch is aware of no such accusations other than those of Parlato and his associate Luthmann).
Styron responded to Luthmann via email the same day, saying, “We are currently unable to comment as we are in the process of consulting with our attorneys about the best ways to address libel, copyright infringement, and other claims against a convicted felon [Parlato] who operates several websites on which he has published factually incorrect information. However, once we are in a place in this process where we are able to comment I am happy to follow up with you. The vast majority of your questions can be answered by a very simple review of our website which clearly reflects all of our board members as well as our methodology. I hope this is helpful in the meantime.”
Luthmann responded to Styron via email a few minutes later, saying, “Are you seriously considering suing journalist and publisher Frank Parlato? That hasn’t worked out well for others in the past.” The remainder of his response was about “’second chance’ persons,” which is a non-technical, advocacy-oriented term commonly used to refer to individuals who were formerly incarcerated, on probation or parole, or with arrest or conviction records. The term is generally used to suggest that such individuals deserve a second chance at employment, housing, and stability provided they stop running afoul of the law. It is not generally used to refer to individuals who continue to violate laws.
It is possible that Luthmann, himself a convicted felon, may have become familiar with this social justice terminology due to his own criminal record. Richard Luthmann is a disbarred New York attorney with a documented pattern of criminal conduct.
Luthmann was charged in a 2017 federal indictment that included allegations of “kidnapping and kidnapping conspiracy, extortionate collection of credit, conspiracy to commit extortionate collection of credit and brandishing a firearm during the commission of those crimes,” according to a December 15, 2017 press release from the U.S. Attorney’s Office for the Eastern District of New York. The press release cited additional charges against Luthmann that included “conspiracy to commit wire fraud, money laundering, money laundering conspiracy and aggravated identity theft,” as well as “access device fraud.”
The case involved a scheme in which Luthmann defrauded businesses by promising shipments of valuable scrap metal but instead delivered low-value materials while also using threats and intimidation. Prosecutors specifically alleged that he participated in a scheme in which an individual was lured to his law office and held against his will while demands were made. Luthmann allegedly invoked purported organized crime connections to pressure victims.
Luthmann ultimately pleaded guilty to “wire fraud conspiracy and extortion conspiracy,” according to a March 18, 2019 press release from the U.S. Attorney’s Office for the Eastern District of New York. A later press release dated September 9, 2019 reports that Luthmann was sentenced “to four years’ imprisonment for his convictions on one count of wire fraud conspiracy and one count of extortion conspiracy. Luthmann was also ordered to pay $500,000 in restitution and $130,000 in forfeiture.”
Setting The Record Straight
Styron’s references to certain legal claims in her email response to Luthmann were related to Parlato’s decision to lift images of Styron from CharityWatch’s social media accounts and publish them without permission on his various websites. Her photos were placed alongside demonstrably false accusations against both Styron and CharityWatch that appeared to be intended to damage their credibility in retaliation for CharityWatch’s reporting on D.E.L.T.A. Rescue’s governance issues and $2.5 million in unaccounted-for donations.
CharityWatch was founded in 1992 by Daniel Borochoff, who continues to serve on the organization’s 5-person board of directors. Styron, who took over as CEO in 2020 upon Borochoff’s retirement, is responsible for overseeing CharityWatch’s staff and independent contractors who aid her in carrying out the watchdog work of the organization. Parlato’s repeated accusations on his various websites claiming that CharityWatch is a “one-woman organization,” and that most of $500,000 worth of CharityWatch’s donations went solely to Styron as opposed to paying for the organization’s research and financial analysis, entire program staff, and other watchdog work, are patently false. Also false is Parlato’s accusation that Styron continues to also earn money from an accounting business she closed in 2020 upon accepting the position as CharityWatch’s new CEO.
Potential IRS Consequences
Grillo’s alleged use of charitable resources to fund a kidnapping plot raises serious concerns under Internal Revenue Service (IRS) rules governing tax-exempt organizations. To maintain tax-exempt status under Section 501(c)(3), a charity must be organized and operated primarily for exempt purposes and may not confer more than incidental private benefit or engage in activities that are not in furtherance of its charitable mission. Payments of charitable funds to a third party in connection with content targeting critics, particularly where that content appears misleading or retaliatory in nature, do not appear to constitute legitimate charitable activity and instead raise serious concerns about a potential diversion of donor funds for non-exempt purposes. These concerns escalate dramatically in light of reporting that Grillo allegedly used funds associated with his charities in connection with a plot to kidnap a former employee who had prevailed in litigation against D.E.L.T.A. Rescue.
If the IRS determines that charitable funds were improperly used, it has the authority to impose “intermediate sanctions” under Internal Revenue Code Section 4958. These sanctions can include excise taxes on individuals who received an excess benefit, as well as on organization managers who knowingly approved such transactions, along with requirements to correct the transaction, which generally includes repayment of improperly used funds. In more serious cases, particularly where more than an insubstantial portion of an organization’s activities do not further exempt purposes, the IRS may determine that the organization has failed the operational test. Such a finding can lead to additional enforcement actions, including corrective measures, ongoing oversight, or ultimately revocation of the organization’s tax-exempt status.
For Leo Grillo and others who may be found to have misused charitable funds, the potential consequences may be both personal and organizational. Individuals determined to have received an excess benefit or to have knowingly participated in such transactions could be subject to excise taxes and required to return the excess benefit. In addition, where the underlying conduct involves deception or is alleged to involve unlawful activity, the same facts may also draw scrutiny from other regulatory or law enforcement authorities.
Status of Bankruptcy
D.E.L.T.A. Rescue (short for “Dedication & Everlasting Love to Animals”) entered Chapter 11 bankruptcy in federal court on May 9th, 2025. This means that a judge is supervising the charity’s finances while it tries to stabilize, pay its debts, and decide how to move forward. The case is in Los Angeles before Judge Neil W. Bason, with Todd A. Frealy as the court-appointed Chapter 11 trustee overseeing D.E.L.T.A. Rescue’s bankruptcy (C.D. Cal. case no. 2:25-bk-13881-NB). As of the publication date of this article the bankruptcy proceedings are not concluded.
Conclusion
Rather than confronting the substance of CharityWatch’s findings about D.E.L.T.A. Rescue, including the $2.5 million in unaccounted-for donations, overlapping governance, and outstanding legal judgments, Parlato’s posts deployed a familiar deflection tactic: attack the messengers to distract from the evidence. His writings attempt to discredit CharityWatch and its sources, as well as whistleblower Adriana Duarte, while offering no meaningful rebuttal to the underlying financial and governance concerns at D.E.L.T.A. Rescue that CharityWatch identified.
These attacks were authored by an individual with legitimately questionable credibility given his criminal record for fraud and extortion, yet his posts ask readers to disregard documented financial issues in favor of personal smears. This pattern of deflection, personal attacks, and omission of key facts attempts to shift attention away from serious questions about how D.E.L.T.A. Rescue used, and continues to use, the donations it receives.
The FBI investigation and subsequent arrest of D.E.L.T.A. Rescue’s founder and president, Leo Grillo, and the revelation that he allegedly used at least some charitable dollars to fund the failed kidnapping of one of his critics, leaves two very important questions for donors: Will D.E.L.T.A. Rescue survive, and what will happen to the animals on its sanctuary?
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