Minnesota AG Issues New Demands in Investigation of Hmong College Prep Investment Scandal

The Minnesota Attorney General’s Office recently stepped up its investigation into the Hmong College Preparatory Academy with a new request for records after the St. Paul charter school lost more than $4 million in a risky hedge fund investment. in 2019.

Hmong Prep confirmed with 5 INVESTIGATES that he received what is called a Civil Investigation Request (CID) nearly a year after the Attorney General’s investigation into the school.

In a rare acknowledgment of an ongoing investigation, a spokesperson for Attorney General Keith Ellison confirmed that his office is “investigating potential violations of Minnesota’s Nonprofit Corporations Act and the Soliciting Act. charity”.

5 INVESTIGATES first reported that the Attorney General’s Office requested “voluntary cooperation” from the HCPA in November 2021.

“In response to this request, the AGO has received most (but not all) of the requested documents,” a spokesperson for Ellison’s office wrote. “The AGO will review the evidence it obtains as part of its investigation and will determine at that time whether any laws were violated.”

Hmong Prep declined interview requests and declined to provide a copy of the CID, but said it was “cooperating with the Attorney General’s request” in a statement to 5 INVESTIGATES.

Last year, Minnesota’s state auditor released an investigative report that found the charter school’s $5 million investment with hedge fund Woodstock Capital violated state law. ‘State.

The school’s founder and principal, Christianna Hang, later resigned. HCPA says there have been more changes at the top as well.

“HCPA’s current leadership includes a new Director of Academics, Chief Financial Officer and Independent Chairman of the Board, as well as comprehensive safeguards and protections to help ensure proper decision-making and financial accountability,” said the school said in its statement.

Nonprofit legal experts, such as Jennifer Urban of Legal for Good, say the Attorney General’s decision to issue a CID is rare and significant.

“You are now required by law to respond instead of quote-unquote, ‘volunteer,’” Urban said. “Risky investments are fundamentally verboten and…obviously, on the face of it, investing in a risky hedge fund would not be commensurate with the requirements of this law.”

HCPA and the Minnesota Department of Education have confirmed that the charter school is also ending its relationship with Bethel University, which was responsible for overseeing school operations.

HCPA is in the process of finalizing a contract with Novation Education Opportunities which serves as the authorizer for approximately 30 charter schools in Minnesota.

Urban says the fact that Hmong Prep is now making changes could work in his favor as the attorney general’s investigation progresses.

“The attorney general’s office is trying to help charities…stay open,” Urban said. “It’s not their goal to shut down a charity. It is their goal to create conformity.

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