Attorney General Keith Ellison claims former Ramsey County Commissioner Blake Huffman used a nonprofit he founded for personal and family gain instead of for his nonprofit’s charitable mission.
“Minnesotans want everyone to be able to afford their lives and live with the same dignity and respect that they want for themselves and their own families," Ellison said in a news release announcing a lawsuit he filed against Huffman. "They know everyone needs stable, affordable housing, especially people in crisis, and they’re willing to open their wallets to help.”
But Journey Home Minnesota, Huffman's nonprofit, "took advantage of their generosity and trust," Ellison added. "If nonprofits and their executives don’t use Minnesotans’ money for the purposes they gave it, I’ll hold them to account.”
Huffman created Journey Home Minnesota (JHM) in 2008 to help provide affordable housing opportunities to Minnesotans in need, particularly single parent households, veterans and domestic violence survivors.
“JHM has claimed that it rents to families earning no more than 40%–80% of the area median income, and charged no more than 30% of their income for rent,” the 24-page lawsuit reads.
JHM’s 2016 federal tax return stated ownership of more than $2.7 million in land and buildings, the complaint says, but now has at least seven foreclosed properties and faces more than $485,000 in default judgments from lawsuits that allege JHM didn’t pay for completed work.
The lawsuit claims Huffman breached his fiduciary duties by acting against the JHM’s charitable mission, which prohibits personal and private monetary benefit because the Internal Revenue Service granted JHM tax-exempt status.
Although 11 members sat on JHM’s board of directors, the lawsuit says Huffman “ran JHM largely as a one-man show,” citing the following examples.
• JHM, in June 2018, purchased a property in Shoreview, Minnesota, for $149,900, from a for-profit company in which Huffman “had an ownership interest.”
• A month later, JHM already owed $39,673 in back taxes on 14 different properties, but JHM sold one of its properties to Huffman’s son, using a different son as a real estate agent, who also brokered other JHM properties.
• JHM solicited tens of thousands of dollars to build a new handicap-accessible home for a family with terminally ill children, Ellison wrote, but abandoned it as the home was never built and that family never received any money donated.
The lawsuit claims Huffman used JHM to try to cancel leases during contracted housing terms so JHM could sell the property, as well as increased tenants’ rent above his nonprofit’s stated rated.
Some tenants said they paid Huffman directly for rent rather than paying JHM, the lawsuit alleges, and JHM “falsely promised that tenants would eventually be able to purchase the homes they were renting for below markets.”
JHM has defaulted on loans and has been sued by creditors, contractors, engineers and architects for not paying those workers, according to the lawsuit.
The lawsuit also states JHM hasn’t been registered with the Attorney General’s organization as a charitable organization since July 15, 2018, but has continued to solicit donations through its website since Monday.
Huffman resigned from the commissioner board in June after his financial conflicts were brought to light, Minnesota Public Radio reported.
The lawsuit seeks to ban Huffman from future association with nonprofits, to dissolve JHM to pay owed money, and to donate the remaining money to another Minnesota charitable organization near Ramsey County.