A St. Paul nonprofit once dedicated to helping people find jobs and housing has been permanently dissolved after its leader allegedly used charity bank accounts to pay for his son's college tuition, piano lessons, gym memberships, and car payments. Rajesh Mehta, the president of Act for Cause, has agreed to pay $200,000 in penalties and accepted a 20-year ban from serving as an officer or director of any Minnesota nonprofit as part of a settlement with the state.
The case traces back to a complaint the Minnesota Attorney General's Office Charities Division received from a constituent, which triggered an investigation into Mehta and the organization he ran, according to WJON. Attorney General Keith Ellison's office formally sued Mehta and Act for Cause in Ramsey County District Court in January, alleging self-dealing, misuse of nonprofit assets, and a string of governance violations. Act for Cause, founded in December 2014, was meant to help individuals gain employment, receive community support, and access housing information — a mission that stood in stark contrast to how prosecutors say the money was actually spent.
A Board That Never Met, Until It Mattered
According to the Minnesota Attorney General's civil complaint, Mehta routinely tapped Act for Cause bank accounts to cover personal expenses far removed from the nonprofit's stated purpose. Court documents further alleged that Mehta used the organization as a shell to dodge personal income taxes, claiming the nonprofit's operating expenses as sole-proprietorship business losses on his own tax returns so that he paid zero income tax.
Ellison's lawsuit alleged that Act for Cause was not properly governed by a board of directors, and state filings and legal analyses reported that the organization owned a commercial property valued at over $1 million, home to 10 to 15 commercial tenants, as detailed by Regulatory Oversight. When the nonprofit dissolved, Mehta allegedly transferred title of that building to his own for-profit LLC at no cost. The same reporting noted that after state regulators issued a Civil Investigative Demand in December 2024, Mehta convened the board's first-ever meeting since the organization's founding two weeks later — and used it to quietly move the $1 million deed without telling board members about the state's probe.
Statutory Authority Behind the Dissolution
The Minnesota Attorney General's Office says nonprofit executives owe strict fiduciary duties of care and loyalty under the Minnesota Nonprofit Corporation Act and the Supervision of Charitable Trusts and Trustees Act, statutes that also give the Attorney General civil authority to dissolve noncompliant corporations and bar officers from future leadership roles. Under the settlement, Mehta will pay $200,000 in penalties, though $100,000 of that amount has been stayed. Act for Cause will remain dissolved permanently.
The Attorney General's Charities Division functions as the state's primary civil regulator for charities, and it typically relies on constituent complaints like the one that started this case to investigate governance breaches rather than pursue criminal charges. That distinction leaves open a key question: whether local or federal authorities might separately pursue criminal tax evasion or fraud charges against Mehta, since the Charities Division's enforcement powers are civil rather than criminal.
Part of a Broader Crackdown on Minnesota Charities
The Act for Cause settlement is not an isolated case. It follows a broader enforcement push by Ellison against mismanaged Minnesota nonprofits, including actions against housing charity SJM Properties in January 2025 and community group We Push for Peace in May, according to Radio Mankato. In July, Hoodline reported that Ellison secured a separate civil settlement forcing the dissolution of the Twin Cities' sham stadium fundraiser, MN Fundraising Initiative, which had generated $3.47 million in revenue while running what regulators called an illegal concession staffing operation disguised as a charitable grant program.
The dissolution also lands against a backdrop of real housing and economic need in St. Paul. Mayor Kaohly Her reported during her State of the City address in May that local businesses suffered more than $129 million in losses earlier in the year, prompting the city to redirect $1.4 million into emergency rental assistance for vulnerable residents, according to the Pioneer Press. That context underscores what was lost when a nonprofit ostensibly built to connect residents with jobs and housing information instead became, prosecutors allege, a vehicle for one man's personal finances.
