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FBI and IRS launch probe into Community Action of Minneapolis

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A Twin Cities nonprofit shut down amid allegations it mis-spent hundreds of thousands of dollars of taxpayer money is the subject of an investigation by the FBI and IRS.

The Star Tribune reports that the two agencies have launched a probe into Community Action of Minneapolis, which closed down after a state audit found its board and executive officers spent $226,000 public money on vacations, spa treatments, a celebrity cruise and a car loan, as well as overcharging federal and state grant programs by $600,000.

The nonprofit served low-income residents in Minneapolis by providing heating assistance, home weatherization and services for children and families to help them become self-sufficient, and was primarily funded from the state and federal governments.

MPR says the scope of the FBI and IRS investigation isn't clear at this stage, but it was revealed after documents were filed in Ramsey County District Court.

The radio station says the documents allege that even more misuse of public money may have been discovered, such as using it to pay of credit card bills of friends of senior management, excessive gift-giving by senior board members, and paying family members or friends "wages" for doing no or minimal levels of work.

Davis told MPR he wasn't aware of the investigation, and said he has done nothing wrong.

The Associated Press reports that the documents were filed by court-appointed receiver Michael Knight, who is going through Community Action's books.

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