Greg Mortenson and CAI Slapped With Class Action Lawsuit

Published May 6, 2011 12:00AM

Court papers filed today in the U.S. District Court in Missoula, Montana, claim that embattled Central Asia Institute founder and philanthropist Greg Mortenson defrauded both his donors and people who purchased his books, Three Cups of Tea and Stones Into Schools. A copy of the complaint, which was filed by personal injury attorney Alexander Blewett on behalf of Montana state legislators Jean Price and Michele Reinhart and obtained by Outside alleges that,

CAI has expended significant sums of money to finance Mortenson’s book tours and public speaking engagements. During these activities, Mortenson and CAI have repeatedly fabricated material details about his activities and work in Pakistan and Afghanistan, including specific fabrications contained in his books Three Cups of Tea and Stones into Schools. The purpose of these fabrications was to induce unsuspecting individuals to purchase his books and donate to CAI. [emphasis Outside's] These activities have generated significant sums of money for Mortenson and CAI in the form of book sales, public speaking fees, and charitable donations.

While the civil filing will still need to be certified for class-action status by a judge, it significantly raises the stakes for CAI and Mortenson, who are facing a criminal investigation by the Montana attorney general's office. Notably, in addition to alleging fraud, the plaintiffs also believe Mortenson and CAI's actions rose to the level of racketeering, which carries enhanced civil penalties: “As a direct result of Defendants’ racketeering, they are liable for threefold…”

Reinhart and Price are asking a judge to effectively dismantle CAI and place all of its donations into a fund to be administered by a third party that would oversee construction of girls schools in Pakistan and Afghanistan. In order to find the donors—presumably to help them establish a class for their claim—the plaintiffs are asking a judge to require CAI to disclose the names of their donors.

After James Frey's 2003 memoir, A Million Little Pieces, was exposed as fiction, Random House faced a class-action lawsuit. All told, the publishing company had to spend $2.35 million to pay for damages and legal fees. People who bought A Million Little Pieces prior to that scandal were entitled to a refund. Random House still sells the book, albeit with a new forward explaining the inaccuracies.

Neither Viking nor Penguin, the publishers of Mortenson's bestselling books, Three Cups of Tea and Stones Into Schools, were named in the suit.

The complaint makes no mention of the recent Jon Krakauer expose or the 60 Minutes report that touched off the scandal two weeks ago.