A nonprofit organization that served low-income residents until it shut down after a state raid last year owes nearly $700,000 to contractors and former employees, records show.
Community Action of Minneapolis owes nearly $700,000 to creditors
Receiver for Community Action of Minneapolis also is questioning some debts.
By Alejandra Matos, Star Tribune
April 3, 2015 at 3:16AM
Community Action of Minneapolis' unpaid bills are in addition to potentially $800,000 owed to the state Department of Human Services, after the state agency conducted an audit that found financial improprieties, including money spent on lavish trips, cruises, personal loans and other unallowable expenses.
Court-appointed receiver Michael Knight listed all companies and individuals that are owed money. They include heating and air conditioning company Centraire Inc., which is owed about $182,000. A construction consulting firm is owed $80,000. Salem LLC, which is registered at New Salem Missionary Baptist Church and is owned by the Rev. Jerry McAfee, is owed $37,000. McAfee said the company was never paid for work it did to weatherize low-income homes.
Community Action shut down in September after the Star Tribune reported on the DHS audit. Since then, the receiver has found other cases of possible misspending.
The new allegations are that Community Action's senior leaders used the organization's money to pay friends' medical expenses and credit card bills, court records show.
Senior management also allegedly diverted money in the form of "wages" to friends and family members and allowed employees to double-bill for meals and gas.
Bill Davis, the organization's CEO, could not be reached for comment, but has denied any wrongdoing. Court records filed in February indicate that the FBI and IRS are investigating the organization's spending.
Davis and Knight are in a dispute over what information Davis needs to disclose. Knight is seeking all documents, but Knight has told the court that Davis is not cooperating.
In recent court filings, Knight included a records request for documents pertaining to car purchases, personal loans, a Ben and Jerry's "PartnerShop" and all documents relating to MAD DADS, a north Minneapolis nonprofit organization that tries to combat drugs and gang violence.
Davis' fiancée, Patricia Banks, is the program director at MAD DADS.
Community Action of Minneapolis has just over $1.8 million in assets, but owes at least $2.2 million, according to court documents. That amount does not include money owed to private contractors and the Minnesota Department of Commerce.
Alejandra Matos • 612-673-4028
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Alejandra Matos, Star Tribune
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