On January 20, in a conference room at the Sonnenalp Resort in Vail, Colorado, a significant encounter took place, and it seemed like an unmistakable sign that the case against Greg Mortenson and the Central Asia Institute (CAI) is ramping up.

Representatives from CAI were in town to make a rare public appearance, one they hoped would be limited to discussion of the organization’s core mission: building schools in Central Asia. Mortenson and CAI, of course, are currently the focus of two major investigations—a civil suit alleging consumer fraud, and a probe by Montana’s attorney general into claims of mismanagement of a nonprofit—so it seemed likely that the controversy might be on the minds of some in the audience. To put it mildly, that turned out to be the case.

Two people were there representing CAI: Karin Ronnow, the group’s communications director and a former reporter at the Bozeman Daily Chronicle, and photographer Ellen Jaskol. Together they staged a 90-minute talk, accompanied by roughly 200 photographs showing CAI schools, students, and personnel in Pakistan, Afghanistan, and Tajikistan. Notably, Mortenson didn’t appear to be in any of them.

Also present was Jon Krakauer, the journalist who put CAI in its current world of hurt. Last April, Krakauer published “Three Cups of Deceit,” a long exposé, released by Byliner, that accused Mortenson of rampant fabrications in his two best-known books, Three Cups of Tea and Stones Into Schools. Krakauer also cited evidence of potentially criminal financial mismanagement by Mortenson, and his report, along with a 60 Minutes segment that preceded it with similar claims, prompted the legal action.

On April 19, Montana attorney general Steve Bullock announced that his office would look into whether Mortenson and other CAI officials had violated state laws covering the operation of nonprofits. On May 5, two plaintiffs from Montana filed a civil suit against Mortenson and CAI in U.S. District ...