The Southern Poverty Law Center (SPLC) in the United States has been indicted on federal fraud charges after acting Attorney General Todd Blanche accused the civil rights group of improperly raising millions of dollars to pay informants to infiltrate the Ku Klux Klan and other far-right groups.

The Department of Justice alleged that the law centre defrauded donors by using their money to fund the very ideology it claimed to be fighting.

It pointed to payments of at least $3m between 2014 and 2023 to people affiliated with the Ku Klux Klan, the United Klans of America, the National Socialist Party of America and other far-right groups.

“The SPLC was not dismantling these groups. It was instead manufacturing the extremism it purports to oppose by paying sources to stoke racial hatred,” Blanche said.

The civil rights group faces charges including wire fraud, bank fraud and conspiracy to commit money laundering. The Justice Department brought the case in Alabama, where the organisation is based.

The indictment came shortly after the SPLC revealed the existence of a criminal investigation into its programme to pay informants to infiltrate far-right groups and gather information on their activities.

The group said the programme was used to monitor threats of violence. The information was often shared with local and federal law enforcement, it added.

SPLC CEO Bryan Fair said the organisation “will vigorously defend ourselves, our staff, and our work”.

Blanche said the money was passed from the centre through two different bank accounts before being loaded onto prepaid cards to give to the members of the far-right groups, which also included the National Socialist Movement and the Aryan Nations-affiliated Sadistic Souls Motorcycle Club.

The group never disclosed to donors the details of the informant programme, Blanche added.

“They’re required to under the laws associated with a nonprofit to have certain transparency and honesty in what they’re telling donors they’re going to spend money on and what their mission statement is and what they’re raising money doing,” he said.

The indictment includes details about at least nine unnamed informants who were paid by the SPLC through a secret programme that prosecutors say began in the 1980s.

Within the SPLC, they were known as field sources or “the Fs”, according to the indictment. One informant was paid more than $1m between 2014 and 2023 while affiliated with the neo-Nazi National Alliance, the indictment said. Another was the imperial wizard of the United Klans of America.

The SPLC said the programme was kept quiet to protect the safety of informants.

“When we began working with informants, we were living in the shadow of the height of the Civil Rights Movement, which had seen bombings at churches, state-sponsored violence against demonstrators, and the murders of activists that went unanswered by the justice system,” Fair said. “There is no question that what we learned from informants saved lives.”

The SPLC, which is based in Montgomery, Alabama, was founded in 1971, and has used civil litigation to fight white supremacist groups.

The nonprofit has become a popular target among Republicans, who see it as overly leftist and partisan.

The investigation could add to concerns that the administration of President Donald Trump is using the Justice Department to go after opponents and critics.

It follows a number of other investigations into Trump foes that have raised questions about whether the law enforcement agency has been turned into a political weapon.

The SPLC has faced intense criticism from conservatives, who have accused it of unfairly maligning right-wing organisations as far-right groups because of their viewpoints. The centre regularly condemns Trump’s rhetoric and policies around voting rights, immigration and other issues.

The centre came under new scrutiny after the assassination last year of conservative activist Charlie Kirk.

The centre included a section about Kirk’s group, Turning Point USA, in a report titled “The Year in Hate and Extremism 2024”. It described Turning Point USA as “a case study of the hard right in 2024″.

Kash Patel, Trump’s appointee to lead the Federal Bureau of Investigation (FBI), ended his agency’s relationship with the centre, which had provided law enforcement with research on hate crime and domestic far-right ideology and practices.

Patel said the centre had been turned into a “partisan smear machine” and accused it of defaming “mainstream Americans” with its “hate map”, which documents alleged antigovernment and hate groups inside the US.

Republicans in the House of Representatives hosted a hearing centred on the SPLC in December, saying it coordinated efforts with former President Joe Biden’s Democratic administration “to target Christian and conservative Americans and deprive them of their constitutional rights to free speech and free association”.