Aug 26, 2013; Arlington, VA, USA; A general view of the USA Hockey logo along the boards during a youth hockey clinic during the 2013 U.S. Men's national team camp at Kettler Capitals Iceplex.

A Colorado man who ran amateur hockey in the state for more than a decade was found liable on Tuesday, Oct. 7, for using hundreds of thousands of dollars intended for youth hockey families for his and his business partner's personal profit.

Randy Kanai, the Colorado Amateur Hockey Association’s president from 2012 to 2023, was found by a judge to have illegally run the regional USA Hockey governing body’s tournaments, combines and girls’ teams through his private business for two years without disclosing the conflict of interest to the nonprofit's board or USA Hockey.

In a written ruling following a two-day civil trial in April, Jefferson County District Court Judge Chantel Contiguglia in Colorado found Kanai liable for civil theft, conversion, breach of fiduciary duty and unjust enrichment. She ordered him to pay the nonprofit $579,000 in damages plus cover its court costs and attorney fees and turn over all records from his business dealings.

Reached by USA TODAY via text message, Kanai, who denies all wrongdoing, did not immediately provide comment for this story.

The case stems from a lawsuit the association filed against Kanai in October 2023, five months after the board voted him out as president.

"CAHA brought this civil lawsuit against Mr. Kanai to address his actions while he served as president of CAHA, and today's Order holds him accountable for his improper conduct," the association said in a statement provided to USA TODAY by executive vice president Bill Brierly.

At the April trial, Kanai did not deny running the nonprofit’s programs and events through his private business, International Sports Event Management LLC. He argued he was allowed to do so. He said it did not occur to him that the arrangement could be a conflict of interest because he did not intend to make a profit.

"Why would it need a board vote?" Kanai said during his testimony at the trial. "Every decision I made during my tenure was rooted and based in the thought process of what was best for the kids."

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The business arrangement began in early 2021, when USA Hockey officials asked the Colorado Amateur Hockey Association to run its girls’ national tournament that year amid the COVID-19 pandemic. Instead of routing registration fees for the tournament through the nonprofit’s bank account, Kanai routed tens of thousands of dollars in registration fees through the bank account of his private business.

Kanai said at the trial that because he had to plan the event on short notice, he wanted the flexibility to make decisions without board approval. He said his business was in a better position to run it because it already had contractors set up in its payroll system.

Kanai continued running the nonprofit’s events and programs through his business for the next two years, including the Colorado Amateur Hockey Association's annual state tournament, skills combines, three girls' teams called Team Colorado, and the 2023 boys’ 14-and-under USA Hockey national tournament. In addition to registration fees, he deposited into his business' bank account tens of thousands of dollars of revenue from tournament hotel and apparel rebates.

During that time, Kanai testified that his business profited around $360,000, which he split 50-50 with Jason Schofield, a longtime executive of the National Hockey League’s Colorado Avalanche. Schofield also served on the nonprofit’s board and helped Kanai run the events.

Schofield, who was not named as a party in the lawsuit, testified in the trial as a witness. Reached by USA TODAY, he said he believed the nonprofit board knew of the arrangement.

"I wasn't aware that it was out of procedure," Schofield told USA TODAY. "It was my impression that there was consent. I didn't feel like there was anything that was unknown."

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In his testimony, Kanai insisted that all the profits came from a part of his business that conducted sports testing, including measuring athletes’ skating and shot speed, at combines and other events. He said he was allowed to profit off of the sports testing part of his business, but that the events and programs themselves broke even.

In her written ruling, Contiguglia wrote that even if that was true, Kanai was still required to disclose the conflict of interest to the nonprofit’s board and USA Hockey because the events he profited from were sponsored by the nonprofit. In addition, she wrote that “even the most generous calculation” of profits from the sports testing part of the business “does not even come close to $360,000.”

Bank records subpoenaed by the association and presented at trial show that Kanai and Schofield regularly transferred large sums of money from the business’ bank account into their personal bank accounts. Kanai’s deposits totaled $181,000. The damages Contiguglia awarded the nonprofit were for triple that amount, plus interest.

“At trial, despite his representations to CAHA and USA Hockey that his goal was not to make a profit, Mr. Kanai claims that he thought he was entitled to profits from his operation of the sports testing combine,” her ruling said. “This assertion does not negate Mr. Kanai’s clear breach of his fiduciary duties.

“Mr. Kanai had a fiduciary duty to CAHA to exercise reasonable skill and care in his role as president and to act with the utmost loyalty on behalf of, and for the benefit of, CAHA, just as any other officer or director of a corporation.”

The nonprofit’s lawsuit also accused Kanai of using $110,000 of its money to buy luxury season tickets to Avalanche games during the 2021-22 and 2022-23 seasons that he said he and his family used. Contiguglia found Kanai not liable on this claim because the tickets were part of an Avalanche program in which the association got them free of charge.

In the months after the lawsuit was filed, Kanai filed counterclaims against Brian Smith, who succeeded him as president of the nonprofit, for defamation. Contiguglia found Smith not liable for defaming Kanai.

"I am grateful for the court's well-reasoned opinion holding Mr. Kanai accountable for his actions and for finding that Mr. Kanai failed to prove his claims against me personally," Smith said in a statement to USA TODAY.

Kanai alleged that Smith defamed him by allegedly saying during a 2023 board meeting that “a lot of money had run through” Kanai’s accounts.

Even if Kanai had proven that Smith had made the statement, it cannot be considered defamatory, Contiguglia wrote, because the statement was true.

Kenny Jacoby is an investigative reporter for USA TODAY who covers college and youth sports. Follow him on X @kennyjacoby and on Bluesky @kennyjacoby.bsky.social. Email him at kjacoby@usatoday.com.

This article originally appeared on USA TODAY: Colorado nonprofit leader routed youth hockey money through private company

Reporting by Kenny Jacoby, USA TODAY / USA TODAY

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