The founder of a District nonprofit serving homeless LGBTQ youths will be allowed to leave the D.C. jail while she fights federal charges that she diverted $150,000 of pandemic relief funds meant to support the group’s indigent clients to her own accounts in El Salvador.

Ruby Corado, 53, the founder of Casa Ruby, will be confined to the home of her niece in Rockville, Md., U.S. Magistrate Judge Robin M. Meriweather ruled, with exceptions for legal and medical appointments. She will be subject to GPS monitoring and barred from accessing her passport.

Corado has been held at the D.C. jail since her arrest at a hotel in Laurel, Md., on March 5. She has not formally entered a plea to federal fraud and money laundering charges; her next hearing is scheduled for April 12.

In two hearings that started Friday and continued Tuesday afternoon, a public defender disputed U.S. prosecutors’ allegations that Corado fled the United States for her native El Salvador after reports of financial irregularities at Casa Ruby in July 2022 and so posed a serious risk of flight again.

Assistant federal public defender Diane Shrewsbury argued in person and in court filings that Corado’s move was part of a years-long plan to open an international branch of Casa Ruby. When that failed, Shrewsbury said, Corado returned to the United States looking for work and intending to stay. She was in the process of starting a new job as an assistant when she was arrested last week, Shrewsbury said, and now plans to ask whether she can do that job remotely.

Rather than dodging accountability, Shrewsbury said, Corado has been engaging in civil litigation against her and Casa Ruby in D.C. Superior Court over the past two years, attending hearings virtually as permitted.

“This was not a spur-of-the-moment” decision, Shrewsbury said. “There is no evidence that her move to El Salvador was anything more than something that was long planned to improve her business. … When things didn’t work out, she returned.”

Shrewsbury said confinement was particularly punishing for Corado because, as a transgender woman, she was held in solitary confinement in a men’s unit of the D.C. jail.

The jail began housing transgender inmates according to their preferences after a class-action lawsuit in 2021. A spokesperson for the jail said Corado had indicated a preference to be housed in a male unit. To ensure her safety, she was housed in a single cell, the jail said.

D.C. Department of Corrections Director Thomas Faust said the agency prioritizes the safety and well-being of LGBTQ+ residents and “accommodates transgender, intersex, and gender nonconforming residents in either male or female units based on their preference unless otherwise recommended by the Transgender Housing Committee.”

Meriweather said she was not comfortable releasing Corado outright, given prosecutors’ argument that an extradition treaty that took effect in 1911 between the United States and El Salvador does not cover modern-day financial crimes. Moreover, she said, the government has “substantial evidence to corroborate” the fraud charges, which include allegations of “deception” and of illegally funneling money to accounts in El Salvador.

But the judge said she was comfortable releasing Corado to home detention under the custodial responsibility of a niece who works from home most of the week and who promised to alert the court “right away” if her aunt is missing. Corado’s strong local ties, she said, were in her favor. Corado has lived in the United States for 35 years and is a legal permanent resident; her father and sisters are in the D.C. area, as is her husband’s family. Her husband is a U.S. citizen who grew up in the area and is in the process of returning from El Salvador, Shrewsbury said.

It’s “a mixed situation,” Meriweather said, but “the positives outweigh the negatives.”

Prosecutors had argued that Corado was a flight risk who faces years in prison. But Shrewsbury argued that as a first-time offender on nonviolent charges, Corado would probably be sentenced to less than two years in prison if convicted and end up spending more time in jail pretrial than she deserved.

The Justice Department does not plan to appeal Meriweather’s ruling, a prosecutor said in court, clearing Corado for release Wednesday.

Corado faces federal charges of bank fraud, wire fraud, laundering of monetary instruments, monetary transactions in criminally derived proceeds and failure to file a report of foreign bank account.

“Although the defendant was once a leading charitable figure in our community, she betrayed the trust of the donors who supported her, the District, and federal government that funded her, and the very community she claimed to serve,” Assistant U.S. Attorney John Borchert wrote the court before the hearing. “When coupled with the fact that the defendant abandoned her career, sold her home, and fled the country after learning she might be prosecuted for this financial misconduct, there are simply no conditions or combination of conditions that can assure the defendant’s return to court.”

The FBI has alleged that Corado received more than $1.3 million in 2020 and 2021 from the Paycheck Protection Program and the Economic Injury Disaster Loan program. But she allegedly stole at least $150,000 by transferring the money to bank accounts held in El Salvador under her birth name that were hidden from the IRS.

In a voluntary interview with law enforcement the day of her arrest, Borchert said, Corado falsely claimed that she never spent coronavirus relief funds for any purpose other than rent, utilities or payroll expenses as permitted.

“The outrageousness of it is even greater,” Borchert told the court, because Corado allegedly passed the money through her consulting company, TIGlobal, “trying to circumvent” the Small Business Administration’s earlier denial of her company’s EIDL application.

Casa Ruby shut its doors in July 2022 after a Washington Post report raised questions about possible financial mismanagement, including several employees and multiple landlords who said they had not been paid. The D.C. attorney general’s office asked a D.C. Superior Court judge to freeze Casa Ruby’s bank accounts and prevent Corado from making further withdrawals. Until then, the District alleged, Corado was still drawing funds from Casa Ruby accounts, which she retained control of after she resigned.

In a pending lawsuit filed in November 2022, the D.C. attorney general’s office formally accused Corado of diverting hundreds of thousands of dollars and violating District laws by paying workers less than the minimum wage and not paying workers all of the wages they earned. A court-appointed receiver also has sued the group’s board, alleging that its lack of oversight enabled Corado to embezzle more than $800,000, increase her own salary and open an office in El Salvador, all without board approval.