Minnesota Attorney General Keith Ellison has announced a settlement with SJM Properties and its founder, Steven Meldahl. The agreement follows allegations that Meldahl operated a sham nonprofit in violation of Minnesota charities laws. As part of the settlement, known as an Assurance of Discontinuance, SJM will be dissolved. Additionally, Meldahl is prohibited from holding any position or having control over property intended for charitable purposes.
Attorney General Ellison stated, "The evidence surrounding this investigation—including my prior action against Meldahl as a landlord, his criminal prosecution, and my independent investigation—all prove that SJM is a complete sham created to further Meldahl’s private gain." He emphasized the importance of accountability when individuals misuse charities for personal enrichment.
SJM was established in 2008 by Meldahl with the mission to provide affordable housing and prevent community deterioration in Minnesota's inner-city areas. However, in August 2023, Meldahl faced charges of tax evasion and fraud for allegedly using SJM's sales tax exemption certificates improperly. An independent investigation by the Charities Division under Minnesota's civil nonprofit corporation laws led to the decision to dissolve SJM.
In May 2024, as part of a plea agreement related to these charges, Meldahl admitted to using SJM as a means to avoid state sales taxes on his rental properties. He agreed to cooperate with the Attorney General's Office in dissolving the organization.
Previously, in October 2019, Attorney General Ellison sued Meldahl for violating tenants' rights. The court found that he acted knowingly and in bad faith against 267 low-income families renting from him. The court described his conduct as "brazen and deplorable illegal business conduct harming a vulnerable part of Minnesota’s population," noting severe issues with living conditions at some properties.
The Charities Division within the Attorney General's Office holds civil enforcement authority over nonprofit corporations and charitable laws but does not enforce criminal laws. Nonprofit executives are required by state law to prioritize their organization's interests above personal financial gains.
Residents concerned about nonprofit governance can file complaints through the Attorney General’s website or contact their office directly via phone numbers provided for different regions.