A top executive at the Appraisal Institute who was forced out last year amid sexual harassment allegations has struck back with a defamation suit against the nonprofit trade group and several of its current and former members.
Craig Steinley is suing AI after its board of directors voted to oust him from his board seat last May amid a lawsuit from former CEO Cindy Chance, whom Steinley is also suing for defamation, that alleged Steinley sexually harassed her and outlined self-dealing from executives at the agency.
Attorneys for Steinley describe in their 45-page filing a longstanding culture that allowed for mismanagement and malfeasance at AI, accusing key executives of eroding the agency’s balance sheet and being more focused on internal power struggles than the appraisers they serve. Steinley argues that he was forced out by leadership intent on holding on to the perks of their power after internally pushing for change.
Chance dropped her claims against Steinley last year, a little over a month after filing her lawsuit, which accused AI of failing to take action despite the alleged harassment being reported. She has since settled with the agency for undisclosed terms. Steinley’s complaint says the harassment accusations were false and that an internal investigation failed to corroborate them by the time he was removed from the board.
Steinley’s complaint also accuses the Chicago-based agency, which is primarily responsible for providing licensing classes for appraisers, of inflating its membership count in tax filings, lying about the success of its flagship training program, changing reporting rules to avoid disclosing that noncompetitive contracts went to insiders, and other financial mismanagement.
AI said in a statement Tuesday it is focused on defending itself in court.
“Appraisal Institute denies the allegations and disagrees with the complaint’s characterization of the organization and its programs,” Bill Garber, the agency’s spokesperson, said in an email. “We remain focused on our mission to support valuation professionals and promote public trust through education, standards, and professional development, and we are committed to strong governance, financial stewardship, and a respectful workplace. Because this matter is in litigation, we will not try it in the media.”
Steinley says he flagged the inflated membership rolls as the 2019 audit committee chair and was disregarded by senior AI executives. He alleges that the agency continued to misreport enrollment figures through the 2024 tax year, when AI said it had 16,000 members despite allegedly having already identified at least 1,908 appraisers on its rolls who were deceased and another 2,352 retired members who weren’t paying dues.
The lawsuit says AI has “vastly overstated revenue and understated expense forecasts” of its Practical Applications of Real Estate Appraisal program, the digital training platform it launched in 2023. Steinley allegedly pushed for the board to vote to end the program in part because of its slow uptake but also because it lacked protections for AI’s intellectual property and was being operated under a contract that went to an insider without a competitive bidding process, according to the suit.
AI said PAREA is operating with a positive net margin and delivered a high-quality education opportunity to prospective appraisers.
“AI PAREA is producing graduates: as of today, the program has 85 graduates and 246 active participants,” Garber said. “We continually evaluate key metrics, including participant and mentor performance, expenses, and the use of technology, to strengthen the program as needed.”
Two senior AI executives are accused of using agency funds for unproductive international travel.
Two top AI executives, Sandra Adomatis and Paula Konikoff, are also being sued for defamation by Steinley, who alleges they “published and republished false statements” implying Steinley engaged in sexual harassment despite AI being in possession of “information demonstrating that the allegations against [Steinley] were unsubstantiated.”
Adomatis and Konikoff are also accused of using AI funds for years’ worth of international travel that was ostensibly for agency business despite AI having only around 100 members outside the U.S. The average annual expense rate for reimbursed international travel was $279K between 2012 and 2016, the suit alleges.
The complaint says, while Adomatis was president of AI, financial reporting standards for the agency’s audit committee were changed to avoid disclosing where funds were being directed around the same time that contracts were being awarded to Adomatis, Konikoff and other insiders. The practice continued in 2025 when Konikoff took over as president, the suit alleges.
“It is my belief they were protecting the status quo that benefited them professionally and financially,” Steinley said in an email to Bisnow on Tuesday.
Konikoff referred questions to AI as part of company policy, and Adomatis didn’t respond to a request for comment.
The complaint, filed on May 8 in the Northern District of Illinois Eastern Division, includes accusations dating to 2019 but relating to mismanagement of funds from as far back as 2012 — Adomatis and Konikoff were using the AI funds to travel abroad from 2012 through 2016, according to the suit.
Steinley also describes a yearslong friendly business relationship with Chance, who sued him for sexual harassment after being fired as CEO at AI in September 2024, and includes purported text messages he says stand in contrast to Chance’s portrayal of unwanted signs of affection and inappropriate comments.
“Here’s the thing — we may already know each other too well or too long as friends — real friends — for this to be anything else,” Chance allegedly texted Steinley on April 13, 2024, around the time Steinley claims he directed Chance to work more closely with Adomatis. “There’s just another level to those things and if I’m confused about how you feel, then we don’t have that.”
Steinley said in an emailed statement he and Chance were never romantically involved. Chance said she wouldn’t “dignify the question with a response.”
Steinley is also suing Denise Graves for defamation for comments she gave to the New York Times that were published in a May 8 piece in which a dozen women, most of whom were anonymously referenced, told the outlet they had interactions with Steinley that made them uncomfortable. The last defamation claim is against James Park for comments to The Times that Steinley was widely known for engaging in inappropriate behavior with women.
Park spent time as executive director of the Appraisal Subcommittee, the governmental agency that oversees state-level appraisal programs, and Graves was his deputy.
Steinley is also suing AI for retaliatory discharge and violations of the Illinois Whistleblower Act.
The Appraisal Institute headquarters is in the Madison Plaza in Chicago.
Chance’s firing and the lawsuit that followed set off a firestorm inside the insular and opinionated appraisal community, which has active forums where members from across the country talk shop and gossip.
In a statement Tuesday, Chance used an acronym typically associated with domestic violence or abuse to describe the charges against her.
“Deny, attack, reverse victim and offender (DARVO) is a well known playbook,” Chance said in a text message. “Here we have a longtime insider and bureaucratic tactician claiming he was impeded in ‘reform efforts.’ Coercive control, confidentiality rules, and secret investigations, over many years, have undermined governance and impacted a profession with responsibility for the public trust.”
A petition to rehire Chance, who was well-liked by rank-and-file appraisers, was circulated, and the heads of some local chapters openly questioned why the ethics expert was ousted from her role.
After Chance sued, AI initially said Steinley would “step away from his public AI officer appearances,” a move that was described as mutually agreed upon at the time. But Steinley says he was forced into the decision.
“The statement was crafted by Konikoff and AI legal counsel and was first presented to me mere hours before it was released publically,” Steinley said in an email. “While I was cooperative in the investigation of Chance’s claims, I had already been restricted in my activities by Konikoff prior to the filing of Chance’s lawsuit and despite the known lack of evidence that I had participated in the wrongdoing alleged in that complaint.”
AI is facing challenges on multiple fronts as it bleeds cash. It lost over $1M in 2023, nearly $2.4M in 2024, was on track for $2M in losses in 2025 and projected $3M in losses this year, the suit alleges.
Alissa Akins, another former staffer at the agency, is suing after she was fired, claiming it was retaliation for her raising an issue with how AI was grading its exams that had for years resulted in faulty test results going out to appraiser oversight agencies.
Her suit was filed around the same time as and was overshadowed by the sexual harassment allegations, but her suit is ongoing and her attorney has previously told Bisnow that two state agencies have opened their own investigations into the claims.
A separate suit filed in April alleges that a contractor hired to review designation applications stopped getting assignments after raising concerns that Gilbert Valdez, the acting head of the department that manages submission reviews for accreditations, hasn’t had an appraisal license for over seven years, which Bisnow first reported in September.
