Attorney General Ellison files 23 lawsuits to shut down fraudulent nonprofits
Lawsuits allege that sham nonprofits were created or revived to act as fraudulent Federal Child Nutrition Program “sites,” seek dissolution
October 18, 2023 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his Office has filed 23 civil lawsuits seeking to shut down Minnesota nonprofit corporations that were created or revived to defraud the Federal Child Nutrition Program, primarily by acting as fraudulent “sites” tasked to administer meals to children in need.
As 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 conducted by the Charities Division of the Attorney General’s Office also 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 providing grounds to shut the organizations down under Minnesota’s civil nonprofit corporation laws.
“Nonprofits are supposed to benefit the public — not defraud it,” Attorney General Ellison said. “Most nonprofits work hard and do good work to help the people of Minnesota — but not these sham organizations. I am seeking to permanently shut down these sham nonprofits so they can’t be revived to defraud the public again.”
The complaints were filed in the counties of Hennepin, Ramsey, Dakota, Stearns, and Rice, but the Attorney General will shortly file a motion to consolidate them all in Hennepin County, where complaints were filed against 16 of the 23 nonprofit corporations. The nonprofit defendants are:
- Academy for Youth Excellence
- Advanced Youth Athletic Development
- African Chamber of Commerce Education
- Bet On Better Future
- Community Enhancement Services Inc.
- 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
- Serving Younger Generation
- Somali American Faribault Education
- South West Metro Youth
- Stigma-Free International
- The Free Minded Institute
- United Enrichment with Heart
- Unity Social Service
- Urban Advantage Services
- Xogmaal Media Group and Xogmaal Services
- Youth Higher Educational Achievement
- Youth Inventor’s Lab
These dissolution actions do not preclude future civil remedies against other defendants, including individuals.
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 additional information on nonprofit laws on its website at www.ag.state.mn.us/Charity/InfoNonProfits.asp.
The public may submit complaints to the Attorney General about the misuse of nonprofit resources. Complaints about charities may be submitted online or by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).
