Already reeling from the loss of $4.3 million from an illegal investment with a hedge fund, Hmong College Prep Academy now is being investigated by the Minnesota attorney general for possible violations of state laws on charities and nonprofits.
The St. Paul charter school this week released an Oct. 21 letter from the attorney general’s office in response to a Pioneer Press records request. It cites the office’s authority to investigate and enforce three chapters of state statutes that relate to charitable solicitations, charitable trusts and nonprofit corporations, some of which can come with misdemeanor criminal charges.
“Information has come to the attention of the AGO about certain activities and practices” of the school, the letter reads, in part.
SCHOOL ASKED TO TURN OVER RECORDS
It asks the school to turn over a long list of records from the past three years, including:
- Names of people who had control over the school’s finances.
- Records of fundraising activities.
- Bank records.
- School board minutes.
- School policies on investment, internal controls, board governance and conflicts of interest.
- Contracts related to the school’s $5 million investment with the Woodstock Capital hedge fund.
The school has until Nov. 19 to provide the records, according to the school’s media consultant, Joanna Hjelmeland.
The school’s founder and superintendent, Christianna Hang, agreed to resign last month, days after the Office of the State Auditor released an investigative report finding that the school’s investment violated state statutes. The auditor sent that report to the Ramsey County Attorney’s Office for review, citing a statute concerning the use of public funds.
The school board is meeting Friday to discuss Hang’s severance and related issues. The meeting agenda also references the attorney general’s letter.
COMPLAINTS, CONFLICTS
Before the school released the letter to the Pioneer Press, the attorney general’s office declined to do the same, saying it’s not public under the state’s Data Practices Act. The letter provides no details about what is alleged.
However, a former employee, Lisa Wedell Ueki, has filed numerous complaints with state and federal agencies in recent years about possible misconduct by people associated with the school.
She’s raised questions about what the school has done with revenue from State Fair-goers who use the school’s parking lot, as well as various conflicts of interest involving members of the school board.
Bethel University, the school’s authorizer, said in August it had “significant concerns” about two conflicts of interest: a five-year school contract worth around $190,000 a year with a company owned by Hang and her husband; and the selection of Northeast Bank to finance part of the middle school expansion while a bank executive served on the school’s board.
As a school, Hmong College Prep is considered a charitable trust by law. But school officials in 2019 also considered establishing a separate charitable foundation, which could pay for student scholarships and school equipment, as well as secure donations for the ongoing expansion of its middle school; the proposal to create a foundation apparently never came to fruition.
Documents filed in connection with the school’s lawsuit against the hedge fund also may have caught the attorney general’s attention. They showed that Hang had asked a Wisconsin friend, Kay Yang, to help the school raise money or invest school funds to pay for the middle school.
Yang, who reportedly donated $20,000 toward a school picnic in 2019, later connected Hang with representatives of the Woodstock hedge fund.
Yang last year was ordered by Wisconsin regulators to return $17 million to her own investors after coordinating foreign currency exchange trades without registering as an investment adviser, and after misleading prospective investors about her own hedge fund.