Attorney General Ellison reaches settlement with Saint Paul nonprofit and its president in lawsuit over misuse of charitable funds, governance failures

Settlement bans Act for Cause president, Rajesh Mehta, from nonprofit sector for 20 years and requires Mehta to pay $200,000 in civil fines for his breaches of fiduciary duties. Act for Cause will remain a dissolved entity under the settlement.

September 3, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today he has secured injunctive relief and civil penalties against Act for Cause (“AFC”)’s president, Rajesh Mehta.  As a part of the settlement, Mehta will be banned from serving as an officer or director of a Minnesota nonprofit for twenty years.  Additionally, Mehta will pay $200,000 in civil penalties, with $100,000 of the penalties stayed.  AFC will remain a dissolved entity as a part of the settlement. AFC was a Minnesota nonprofit corporation located in Saint Paul, Minnesota. 

The Attorney General initially filed his lawsuit against AFC and Mr. Mehta alleging self-dealing, misuse of nonprofit assets, and a variety of governance violations. Specifically, the Attorney General alleged that Mr. Mehta improperly used AFC’s assets for his personal benefit, and that upon dissolving AFC, he unlawfully transferred title of AFC’s commercial property to his for-profit corporation without compensating AFC.  The lawsuit further alleged that AFC was not properly governed by a board of directors, that its finances were impermissibly intermingled with Mr. Mehta’s personal finances, and that the corporation was improperly dissolved.

“Mr. Mehta violated his fiduciary duties, and in doing so, he harmed the public’s trust in Minnesota charities,” Attorney General Ellison said.  “In securing injunctive relief and civil penalties in this settlement, my office has made it clear – nonprofit laws exist for a reason, and there are consequences to failing to adhere to them.” 

AFC was founded in December 2014 and was meant to assist individuals with obtaining employment, community support and access to information about housing.  After receiving a complaint from a constituent regarding Mr. Mehta and AFC, the Charities Division of the Minnesota Attorney General’s Office investigated under Minnesota’s civil Nonprofit Corporation Act and the Supervision of Charitable Trusts and Trustees Act and ultimately filed a lawsuit against Mr. Mehta and AFC. That lawsuit included claims related to violations of the Minnesota Nonprofit Corporation Act for lacking a board of directors, failing to hold annual board meetings, failing to maintain financial records, and breaching director’s and officer’s fiduciary duties.

In Minnesota, the Attorney General, through the Charites Division, has civil enforcement authority over the state’s nonprofit corporation and charitable solicitation laws.  The Attorney General also has statutory authority to enforce consumer protection laws and seek an injunction to enjoin the unauthorized practice of law.  The Charities Division does not enforce criminal laws.  Under state law, nonprofit executives owe fiduciary duties to act in the best interest of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests.  The Attorney General’s Office provides additional information about these fiduciary duties, as well as other resources to help nonprofit leaders properly serve their organizations, on its website at www.ag.state.mn.us/Charity/InfoNonProfits.asp.

The public may submit complaints to the Attorney General about nonprofit directors and officers putting their own interests before the charity’s interests.  Complaints may be submitted by using a form on the Attorney General’s website. The Office can also be contacted by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).