Minn. AG says charity spent funds for personal use

By Bryan Cohen | Mar 17, 2014

SAINT PAUL, Minn. (Legal Newsline) - Minnesota Attorney General Lori Swanson filed a lawsuit on Thursday against an Eden Prairie charity and its executive director for allegedly misspending charitable assets for personal use.

A Brighter Day Foundation and Gardner Gay allegedly spent significant assets since October for Gay's personal benefit, including a gym membership, massages, air travel and restaurant purchases. ABDF also allegedly failed to provide written substantiation that many thousands of dollars spent since October were used to further the organization's charitable mission.

ABDF was formed in 1995 with the nonprofit mission of offering at-risk students the opportunity to attend public schools and have a supportive home environment. ABDF allegedly failed to house any students since June and provided only limited mentoring to students.

"Minnesotans are generous with their charitable giving, and a charity should spend funds to further its charitable mission, not for personal gain," Swanson said.

Swanson's lawsuit alleges eight counts of violations of the state's charitable and nonprofit organization laws, including breach of trust, breach of fiduciary duty and failure to administer charitable assets for charitable purposes. The suit seeks a temporary restraining order to stop ABDF and Gay from making further payments from the charity's bank account until safeguards are put in place to ensure the assets are properly administered.

The lawsuit also seeks recoupment of charitable funds that were allegedly spent for Gay's benefit.

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