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Multnomah County law enforcement has opened a criminal investigation into the management of homeless services provider Sunstone Way, WW has learned. The criminal probe follows a county review that found the nonprofit misspent more $3.6 million in taxpayer dollars.
Multnomah County District Attorney Nathan Vasquez said in a statement to WW on Monday that his office is “actively working with law enforcement on this investigation.” A spokesperson for the Multnomah County Sheriff’s Office also confirmed the investigation.
Neither office would elaborate on the status or scope of the criminal inquiry. Sunstone Way executives did not immediately respond to a request for comment.
The nature of a county fiscal compliance report issued June 16 would strongly suggest any investigation law enforcement pursued would be related to potential fraud.
That report, penned by county officials, alleged that between July 2024 and February 2026 Sunstone Way billed the county at least $3.6 million for unallowable expenses. That included $2.4 million for wages and salaries, $540,000 for fringe benefits, and $440,000 for indirect expenses associated with the nonprofit’s payroll. The county also alleged Sunstone Way used county dollars to pay for things like entertainment for staff, including outings to Paddy’s Bar & Grill and TopGolf.
Sunstone Way, which at its height operated two shelters and three pod villages for Multnomah County and the city of Portland, crumbled earlier this year after a former employee filed a whistleblower lawsuit alleging that the nonprofit’s executives spent taxpayer dollars on unallowable expenses like booze, staff retreats, and contractors with close ties to management. (Many of the whistleblower’s claims appear to have been corroborated in the county’s June 16 report.) The nonprofit announced earlier this spring that it would permanently close its doors July 1—including all of its remaining shelter beds.
That Sunstone Way is now under criminal investigation is a striking development in the case of a government-funded nonprofit allegedly gone rogue.
Much of the nonprofit’s funding came from the Portland region’s Supportive Housing Services tax, a marginal tax on high income earners to pay for homeless-related services that voters passed by ballot measure in 2020. The new allegations of Sunstone Way’s misspending have increased questions about the county’s stewardship of that money—especially given that county officials launched Sunstone Way (originally known as All Good Northwest) and the county auditor warned that it placed insufficient safeguards on its contracts.
Representatives for the county’s Homeless Services Department and the office of County Chair Jessica Vega Pederson could not be immediately reached for comment.
Sunstone Way’s last day in operation is tomorrow.
