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Continued: Minnesota sues Eden Prairie nonprofit for diverting money meant for low-income students

  • Article by: KELLY SMITH , Star Tribune
  • Last update: March 14, 2014 - 11:57 AM

“We’re glad the attorney general is taking this step,” said Brian Niemczyk, Stoebner’s attorney. “That certainly helps our case. If the attorney general’s lawsuit is successful, it gets ABD back to all the good things it did for kids.”

Meanwhile, the Gays continue to rent the house. And since October, investigators say, Gay has spent $220,000 of the charity’s money for things such as airfare, cash, massages, groceries, gas and tires — without documenting how it related to the charity.

Gay admitted to investigators that some of it was for personal expenses but argues that others were legitimate nonprofit expenses. Since October, he also wrote out checks from the charity’s account such as $8,600 to his children for “reimbursements,” nearly $13,000 to his wife for “reimbursements” and more than $23,000 to himself for “payroll,” “bills” and “reimbursements.”

He told investigators he has mentored four former students three to four hours a week since last summer. About $130,000 remains in the nonprofit’s account. And the foundation has agreed to dissolve.

But Stoebner doesn’t know whether any of the donated money will be paid back.

“I think this is only the top of this whole mess of fraud,” he said. “I don’t regret helping the organization, but I regret being conned by Mr. Gay.”

 

Kelly Smith • 612-673-4141

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