Attorney General Ellison sues Refocus Recovery and former founder for breaches of fiduciary duties, violations of nonprofit laws

In civil lawsuit, accuses sham nonprofit of creating conflicts of interest, Dan Larson of improperly creating Refocus Recovery as passthrough to funnel Medicaid funds to Kyros for-profit corporations for personal benefit

Charities Division of Attorney General’s Office has civil, not criminal, authority to enforce Minnesota charities and nonprofit law

October 1, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that he has filed a civil lawsuit against Minnesota nonprofit corporation Refocus Recovery and its founder, former executive director, and board member, Daniel Larson, for violations of the Minnesota Nonprofit Corporation Act (“the Act”). Refocus Recovery violated the Act through a number of governance violations, including failing to be managed by a board of directors, failing to maintain proper books and records, and failing to address blatant conflicts of interest in the way that it allowed self-dealing and the improper diversion of charitable assets. Larson violated his fiduciary duties by improperly forming and using Refocus Recovery to funnel money for his personal profit and intimidating other board members to prevent the operation of Refocus Recovery in a lawful manner.

The Attorney General’s civil lawsuit, filed in Ramsey County, alleges that Daniel Larson improperly formed Refocus Recovery to act as a passthrough entity to funnel Medicaid funds to Larson’s for-profit corporations, Kyros PBC, Kyros Services, LLC and Kyros Staffing, LLC (collectively “Kyros”). Under Minnesota law, recovery community organizations must be independent nonprofits led and governed by representatives of local communities of recovery in order to be eligible for Medicaid reimbursement for providing peer recovery services.

Refocus Recovery’s alleged purpose was to organize a recovery community for people in recovery to provide recovery support services and promote recovery from alcohol and other drug addiction through advocacy, education, and service. The civil investigation that the Charities Division of the Attorney General’s Office conducted into violations of the Act found, however, that nonprofit Refocus Recovery was a sham and that in reality, the majority of all Refocus Recovery services, operations, and revenue was outsourced under backdated contracts with a backdated valuation to for-profit Kyros, an entity with minimal to no experience in nonprofit management or recovery support services, without consideration of alternatives or other providers. Kyros LLC ultimately shut down and entered into an Assignment for the Benefit of Creditors, a state alternative to bankruptcy proceedings, after the Minnesota Department of Human Services stopped payments to Refocus Recovery following credible allegations of fraud.

“Larson’s scheme outrages me, because he manipulated for his own benefit a system that offers real support for people in dire need,” said Attorney General Keith Ellison. “People in recovery should be supported, not abruptly left without support, which is exactly what happened when Kyros shut down amid allegations of fraud. My office is using our civil authority to bring this civil lawsuit over Refocus Recovery’s and Larson’s violations of charities and nonprofit law because Larson needs to face consequences for the choices he made to put his own interests ahead of the recovery community the charity was supposed to serve.”

In Minnesota, the Attorney General, through the Charites Division, has civil enforcement authority over the state’s nonprofit corporation and charitable solicitation laws. The Charities Division does not enforce criminal laws. Under state law, nonprofit executives owe fiduciary duties to act in the best interest of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests. The Attorney General’s Office website provides additional information about these fiduciary duties, as well as other resources to help nonprofit leaders properly serve their organizations.

The public may alert the Attorney General’s Office about nonprofit directors and officers putting their own interests before the charity’s interest either by filing a complaint online or by calling (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).