Minnesota seeks to shut down nonprofits accused of defrauding federal meals program

Minnesota Attorney General Keith Ellison's office is seeking to shut down 23 nonprofits accused of defrauding federal meals programs, most of which are related to the massive Feeding Our Future investigation.

The 23 civil cases, announced Wednesday, seek to legally dissolve the nonprofits from operating in Minnesota — a procedural step separate from more significant federal criminal cases.

Last fall, federal prosecutors announced the first indictments in the Feeding Our Future investigation, alleging a more than $250 million fraud scheme. Since then, 60 people have been charged, accused of stealing federal money meant to feed children in need while distributing little or no meals and spending the money on lavish homes, cars and trips.

The Attorney General's Office can't file criminal charges in the case, but it is responsible for enforcing charitable giving laws in Minnesota. Last January, Ellison's office sued the leaders behind one of Feeding Our Future's sites, ThinkTechAct Foundation. The Attorney General's Office also sought court supervision of Feeding Our Future's closure as a nonprofit, which is still ongoing.

Asked why it took more than a year after the federal investigation became public to seek to dissolve the organizations, a spokesman for Ellison's office said it took the agency time to conduct an independent investigation of the 23 organizations — doing site visits, reviewing bank records and other steps to make sure there were no legitimate charitable purposes behind the nonprofits before seeking the "drastic step" of dissolving the organizations.

Some of the organizations the office are seeking to dissolve haven't been named in federal indictments but were led by people who have been indicted. The state found that the 23 nonprofits were created or revived at the start of the COVID-19 pandemic to tap into the federally funded meals program and had a series of state law violations. Many misused bank records or weren't conducting legitimate nonprofit activities on-site.

"Nonprofits are supposed to benefit the public — not defraud it," Ellison said in a statement. "Most nonprofits work hard and do good work to help the people of Minnesota — but not these sham organizations."

The organizations in the civil cases 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, 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 and Youth Inventor's Lab.

Minneapolis City Council Member Jamal Osman's wife, Ilo Amba, founded Urban Advantage Services. She hasn't been criminally charged or accused of fraud by federal investigators.

In court documents, state attorneys said Amba established the "sham corporation" to direct money to herself and family, and her organization, which has no apparent legitimate activities or assets, refused to respond to the civil investigation. According to the state Education Department, which oversees the federal funding distributed to the state for these meal programs, her nonprofit received $461,533 in federal reimbursements in 2020 and 2021.

Reached Wednesday night, Osman, who is running for another term in next month's election, said he wasn't free to immediately comment on the state allegations. Last month, Ellison endorsed Osman, his fellow DFLer, for re-election.

Another of the organizations named in the new civil cases, Minnesota's Somali Community, was run by Sharmarke Issa, who resigned from his position at the Minneapolis Public Housing Authority. He was indicted by federal prosecutors last year.