Attorney General Keith Ellison has filed a lawsuit against a former St. Paul charter school superintendent over a 2019 investment with a hedge fund that lost the school $4.3 million.
Christianna M. Hang, superintendent and founder of Hmong College Prep Academy, “committed the school to become a limited partner in Woodstock Capital Partners LP, a hedge fund, against the advice of the school’s legal and accounting advisors, and despite the school’s investment policy…” according to a news release on the lawsuit.
Hang then wired $5 million of the school’s money to the hedge fund created by Woodstock without the knowledge of the school’s board of directors or meaningful research into the hedge fund, according to the attorney general.
Minnesota law prohibits schools from investing in hedge funds, which often use risky investment strategies.
The lawsuit, which was filed in Ramsey County District Court, says Hang breached the fiduciary duty of care she had to the school under state law governing nonprofit corporations, meaning she had a responsibility to act in the best interest of the organization. In the civil suit, Ellison is seeking a return of the funds.
Eighteen months after sending the money, all that was left of the school’s investment was $700,000, the Pioneer Press reported in 2022.
According to the school’s 2021 year-end audit, the value of the investment had fallen to $684,762. School officials at the time didn’t know what happened to the rest of the money.
The school sued Woodstock in federal court in 2021, alleging the hedge fund either stole or badly mismanaged the money. Woodstock at the time said the $4.3 million loss was a matter of bad timing.
The school was criticized in a report by the Office of the Minnesota State Auditor, and the Charities Division of the Attorney General’s Office eventually began an independent civil investigation under the state’s nonprofit corporation, charitable-solicitation, and charitable-trust laws. Hmong College Prep is considered a charitable trust.
Hang and her husband, chief operating officer Pao Yang, resigned from the school at the end of 2021, leaving with a total of $350,000 in separation payments.
The couple eventually sold their Hugo home, and Hang no longer lives in the state, according to the lawsuit.
Hang could not be reached for comment Thursday.
“This illegal use of HCPA’s resources and subsequent loss of over $4 million is an astonishing disservice to students and their families, teachers and administrators, and Minnesota taxpayers. Today, I am suing to recover these funds, protect the educations of young Minnesotans attending HCPA, and hold Ms. Hang accountable,” Ellison said in a statement.
Ellison also filed an Assurance of Discontinuance in a separate action with Hmong College Prep Academy, which places reforms on the school’s governance and investment practices.
Related Articles
St. Paul school board approves moving elections to even years
Twin Cities colleges, universities pursue renovations, new buildings despite enrollment challenges
University of Minnesota students studying Dakota language reflect on program’s future
Trump promised mass deportations. Educators worry fear will keep immigrants’ kids from school
The FAFSA is now open. Submit ASAP to get money for college
Leave a Reply