AG Ellison Seeks to Dissolve Nonprofits that Profited at Expense of Needy Children

  • Minnesota AG Keith Ellison filed 23 lawsuits seeking to shut down nonprofit corporations that allegedly defrauded the Federal Child Nutrition Program by falsely claiming to serve meals to children in need while pocketing the funds received.
  • In the lawsuits, AG Ellison alleges that the entities were created or revived around the start of the COVID-19 pandemic, when changes were made by the USDA to the federal Child and Adult Care Food Program to ensure that children in need were able to access food. An independent civil investigation allegedly found that the entities did not serve any meals—or served only a fraction of the meals they claimed to provide—uncovered evidence of misuse in many of the entities’ bank accounts, including large transfers to personal bank accounts and shell companies associated with the corporations’ officers or board members.
  • The lawsuits seek dissolution of the nonprofit entities, as well as declarations that their acts violated the Minnesota Nonprofit Corporation Act.
  • Meghan Stoppel of Cozen O’Connor’s State AG Group recently attended a meeting of the National Association of Attorneys General and the National Association of State Charity Officials, where panelists discussed the importance of AGs—as charities regulators—in ensuring nonprofits are mindful of their fiduciary duties and strategic missions.