The Justice Department on Tuesday obtained a criminal indictment against the Southern Poverty Law Center for its covert tactics to spy on violent domestic-extremist groups, accusing the group of money laundering when it paid undercover informants that have shed light on racist movements.

The case represents a sudden turn by federal law enforcement against a nonprofit that until recently was seen as a partner in its fight against domestic extremism, one that falls squarely within the Trump administration’s expanding attacks on leftist activism.

For years, the Southern Poverty Law Center has been considered the national authority on cataloguing hate groups. Its investigative arm, the Intelligence Project, has employed researchers to closely track highly guarded gangs and terrorist groups.

However, acting Attorney General Todd Blanche said the group was “not dismantling extremism but funding it,” creating bank accounts for at least five “fictitious organizations” to discreetly move money among bank accounts that eventually were used to load gift cards that were handed to members-turned-informants within extremist groups. The strategy was “designed to shield the source of funds,” he said.

The FBI conducted the investigation and the indictment was filed against the nonprofit corporation in the Middle District of Alabama. The Southern Poverty Law Center is based in Montgomery.

The Southern Poverty Law Center was charged with six counts of wire fraud and four counts of making false statements to a federally insured bank, as well as conspiracy to commit money laundering. Acting U.S. Attorney Kevin P. Davidson signed the indictment, which also listed a career federal prosecutor, Russell Duraski, who previously worked on a criminal case against a man who detonated a bomb outside the Alabama attorney general’s office.

The DOJ claims the investigation revealed that the Southern Poverty Law Center had secretly funneled money to the far-right Ku Klux Klan and United Klans of America, the neo-Nazi National Socialist Movement and the white supremacist American Front and Sadistic Souls Motorcycle Club.

The indictment claims the Southern Poverty Law Center developed five fake entities named Center Investigative Agency, Fox Photography, North West Technologies, Tech Writers Group and Rare Books Warehouse to move around the funds.

Blanche claimed the organization had paid $3 million to eight people from 2014 to 2023, including a leader of the 2017 Unite the Right rally in Charlottesville, Virginia, where anti-racism activist Heather Heyer was killed and dozens were injured.

FBI Director Kash Patel said “the money never lies, and they got caught,” accusing the Southern Poverty Law Center of “lying to their donor network to actually go and pay the leadership of these violent extremist groups.” He said in at least one case, funds were “used to facilitate the commission of state and federal offenses.”

While the current law enforcement action is solely against the corporation, Blanche said the investigation is ongoing, and Patel added that individuals “will be brought to justice.”

The tactic of paying informants is par for the course in nation-state espionage and is often employed in law enforcement — although it is illegal in the world of corporate espionage. Complicating matters, though, is the fact that the FBI itself has long taken referrals and accepted tips from the Southern Poverty Law Center for its investigations of extremist groups.

Earlier in the day, the Southern Poverty Law Center’s interim CEO, Bryan Fair, publicly stated that the group had halted the practice of paying for confidential informants and said it was merely “the latest organization targeted by this administration.” He noted that Patel in October announced the FBI severed its ties with the nonprofit.

“This use of informants was necessary because we are no stranger to threats of violence. In 1983, our offices were firebombed, and in the years since there have been countless credible threats against our staff,” he said.

“We frequently shared what we learned from informants with local and federal law enforcement, including the FBI. We do not, however, share our use of informants broadly — with anyone — to protect the identity and safety of the informants and their families,” he said.

Asked by reporters whether the Justice Department was previously aware that informants had been paid, Blanche said, “It is my understanding SPLC never told anybody in law enforcement they were paying off the Ku Klux Klan.”

The Southern Poverty Law Center did not immediately respond to a request for comment.

Until now, the organization has been seen as a pivotal part of the system of academic, activist and law enforcement surveillance of domestic terror groups, particularly as right-wing movements have seen a resurgence in recent decades.

Researchers within the Southern Poverty Law Center’s intelligence unit attend training seminars for law enforcement agencies and have gone on to become university researchers. While he was the organization’s president, Richard Cohen was a member of the Department of Homeland Security’s working group on countering violent extremism.

Because of the nature of court disclosures, this federal case could reveal the identities of the Southern Poverty Law Center’s paid informants — adding a new dimension to the Trump administration’s apparent embrace of right-wing groups. President Donald Trump’s decision to mass pardon his supporters who attacked the U.S. Capitol on Jan. 6, 2021, was seen as the opening volley in his second administration’s sweeping shift in support, followed by an executive order in September designating anti-fascism a type of domestic terrorism and the DOJ’s repurposing of its civil rights division to crack down on progressive causes.