A Minneapolis nonprofit that served food to low-income kids has agreed to dissolve itself after a state investigation found it violated laws regarding its operations and financial transactions.

The move was announced Tuesday by Minnesota Attorney General Keith Ellison, whose office began investigating Gar Gaar Family Services, also known as the Youth Leadership Academy, after it was rejected from participating in a federally funded program to provide food to students after school.

That denial, and the appeal process that followed, brought to light several instances of mismanagement in Gar Gaar's operations, including a lack of accounting in how $2 million in federal funds had previously been used, according to a Tuesday release from the attorney general's office.

The investigation then found additional issues, including:

  • Gar Gaar paid nearly $169,000 to a company owned by Khadija Ali and Priya Morioka, the two principal officers of Gar Gaar, without obtaining board approval or satisfying other requirements required by state law.
  • Gar Gaar paid $1.3 million to food vendors who were convicted of defrauding the federal government as part of the Feeding Our Future scandal.
  • The nonprofit's board was composed of two members – Ali and Morioka – in 2021, when state law mandates at least three people sit on a nonprofit's board. The board has also not held a meeting since January 2022.

An attorney who has represented Gar Gaar, Barbara Berens, could not be reached Tuesday afternoon. Neither Ali or Morioka have been charged in criminal court.

The settlement by the state and Gar Gaar requires it to begin the dissolution process within 60 days of a court's approval. The nonprofit then must transfer its assets to other charitable organizations with a similar mission.

Gar Gaar, which means "help" in Somali, launched in 2020 during the COVID-19 pandemic to help students in need, especially those in the Somali community. The group served meals outside of the school year as part of the Summer Food Service Program, which is funded by the U.S. Department of Agriculture but managed by the Minnesota Department of Education.

Gar Gaar received $21 million in reimbursements for serving 7 million meals — the top provider of summer meals in Minnesota in 2021.

The nonprofit then applied to participate in the Child and Adult Care Food Program during the school year. The state education department denied the application and the decision was later upheld by the Minnesota Court of Appeals.

The Attorney General's charities division can request a court order for a charity to dissolve or ban it from operating in Minnesota.

"Charitable nonprofits hold assets in trust for the public, not their directors, and nonprofit board members are obligated to act in the organization's best interests, not their own," Ellison said in a statement.

Kelly Smith contributed to this report.