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Minnesota Attorney General Keith Ellison’s office is shutting down nonprofit Welch Charities after an investigation found it misused tens of thousands of dollars.

A civil enforcement action filed in Ramsey County District Court Wednesday requires that Welch Charities liquidate its assets, distribute them to another similar nonprofit, and dissolve.

The action also permanently bans Welch Charities President Arturo Eguia from operating a charity, having access to charitable assets or soliciting charitable contributions in Minnesota. Eguia must pay a $50,000 fine if he violates the terms of the settlement.

Welch Charities' stated mission was to help low-income children get the supplies they needed for school. The nonprofit held the annual Indian Bike Week motorcycle festival as a fundraiser.

But according to the settlement and Ellison’s investigation, Welch Charities’ board of directors did not meet, vote, or keep minutes of decisions. This lack of oversight resulted in a failure to track revenue, expenditures, deposits or other financial records.

Despite the nonprofit raising $142,000 over a four-year period, it only distributed $12,203 for charitable purposes. But Eguia’s spending totaled $36,856, including restaurants, bars, hotels and motorcycle parts.

“As Minnesota’s chief regulator of charities and protector of consumers, it’s my job to ensure nonprofits that raise money for charitable purposes use it as they promised their donors they would use it,” Ellison said in a statement.

“Arturo Eguia took advantage of Minnesotans’ and motorcycle riders’ trust and generosity. Instead of using donations well-intentioned people made to Welch Charities to help low-income school children, Eguia instead used the money intended for children to enrich himself, travel on the charity’s dime, and prop up his for-profit business.” 

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