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Pelican Rapids, MN – Minnesota Attorney General Keith Ellison announced on Wednesday that he reached a settlement with Pelican Rapids-based nonprofit organization, Dan Ottoson Ministries, Inc., after uncovering evidence that the organization engaged in conflicted transactions and self-interested lending. The settlement requires Dan Ottoson Ministries to repay $238,000 in self-dealing loans and change governance deficiencies that allowed the improper loans to occur.
An investigation conducted by Attorney General Ellison’s Charities Division found that Dan Ottoson Ministries engaged in a number of self-interested loans and other transactions totaling $238,000 for purposes unrelated to the charity. This includes loans made to charity directors and their family members to purchase vehicles, purchase a boat, fund an MBA, and for a home remodeling project. None of the loans furthered the charitable mission of the organization. They contained loan terms that were extremely favorable to the recipients, and the repayment schedules were not followed or enforced by the organization. The conduct was enabled by the fact that the charity did not have a fully functional board of directors for several years.
“Charities are supposed to benefit the public—not their leaders and family members,” Attorney General Ellison said. “Every charity should have a functional, independent board to make sure assets are used for the greater good and to prevent conduct like this from happening in the first place. While I am disappointed to see charitable assets misused in such a way, I am pleased to have secured a settlement that recovers those misused assets and strengthens governance and oversight at Dan Ottoson Ministries.”
Under the terms of an Assurance of Discontinuance (“Assurance”) filed in Ramsey County, all the remaining loan balances have been paid back to Dan Ottoson Ministries, Inc. Among other actions, Dan Ottoson Ministries will also ensure that its assets are not used for any individual’s private benefit, and that it is managed by a board of directors as required by Minnesota law, and that no further loans are made to Ottoson family members. The charity will be required to submit an update to the Minnesota Attorney General’s Office in one year detailing the progress made to improve its governance.
Story courtesy of the Attorney General’s Office.
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