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Attorney General Ellison shuts down 17 sham nonprofits involved in federal child nutrition fraud

May 16, 2024 (SAINT PAUL) — Minnesota Attorney General Ellison today announced judgments dissolving 17 Minnesota nonprofit corporations that were created or revived to defraud the Federal Child Nutrition Program. At the request of the Attorney General’s Office, Hennepin County Judge Karen A. Janisch issued orders shutting down the nonprofits after the Attorney General established that officers and directors of the nonprofits misused nonprofit assets, had no legitimate nonprofit activities, and failed to cooperate with the Attorney General’s investigation or to respond to the lawsuit.

The dissolution of these charities does not preclude future civil actions against other defendants, including any individuals involved in misappropriating charitable assets.

“The leaders of these 17 nonprofits harmed public trust in charities by pocketing funds intended to feed children,” Attorney General Ellison said. “After thorough investigations, we successfully shut down these sham nonprofits to ensure they can never again be used for fraudulent purposes.”

In October 2023, the Minnesota Attorney General filed 23 complaints against charities in Hennepin, Ramsey, Dakota, Stearns, and Rice counties. The complaints against six entities, Advanced Youth Athletic Development, Bet On Better Future, Community Enhancement Services Inc, Serving Younger Generation, Urban Advantage Services, and Xogmaal Media Group and Xogmaal Services were resolved voluntarily.

As Attorney General Ellison alleged in the lawsuits, a majority of the entities were created or revived by individuals indicted under federal criminal laws for their roles in perpetrating fraud. An independent civil investigation that the Charities Division of the Attorney General’s Office conducted revealed that the nonprofits:

• were all created or revived around the start of the pandemic to capitalize on the Federal Child Nutrition Program,

• did not appear to have legitimate nonprofit activities on site,

• showed evidence of misuse in bank records when located,

• were abandoned or gave false addresses,

• failed to comply with state and federal reporting requirements that would have allowed regulators to detect the fraud,

• and failed to comply with the Attorney General’s investigation.

All of these findings provided grounds to shut the organizations down under Minnesota’s civil nonprofit corporation laws.

The 17 nonprofit defendants that were dissolved by court order include:

• Academy for Youth Excellence

• African Chamber of Commerce Education

• Gedo Community Services

• Hobyo Health Care Foundation

• Hope Academy for Youth & Women Empowerment

• Minnesota African Chamber of Commerce

• Minnesota’s Somali Community

• Multiple Community Services, MCS

• Optimum Community Services

• Somali American Faribault Education

• South West Metro Youth

• Stigma-Free International

• The Free Minded Institute

• United Enrichment with Heart

• Unity Social Service

• Youth Higher Educational Achievement

• Youth Inventor’s Lab

In Minnesota, the Attorney General through the Charities Division has civil enforcement authority over the state’s nonprofit corporation, charitable-solicitation, and charitable-trust laws. The Charities Division does not enforce criminal laws. The Attorney General’s Office provides many resources and information about laws governing nonprofits and nonprofit governance on its website.

The public may submit complaints to the Attorney General about the misuse of nonprofit resources online. The Attorney General’s Office can also be contacted on the phone at (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).

 

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