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January 2, 2026 CERTIFIED MAIL Eric Vagel, Authorized Agent Lakeside Academy 740 E. 24th St. Minneapolis, MN 55404 License Number 1078609 (CRF) ORDER TO PAY A FINE FOR BACKGROUND STUDY VIOLATIONS Dear Eric Vagel: The Department of Human Services (DHS) is ordering you to pay a fine of $800 for four background study violations. Details of our findings are provided below. Our next steps and your options are also detailed. Reason for the Fine DHS is issuing this fine order based on your failure to comply with the following background study requirements: Background Study Violation Determined on October 22, 2025: 1. As a result of a licensing review, a DHS Licensor determined that you failed to initiate a background study request for two staff persons (SP2 and SP4) after being ordered to do so by DHS. On October 22, 2025, DHS determined SP2 and SP4 did not have a valid background study. Fingerprint studies were not submitted after the COVID studies had expired on December 31, 2022. Statute Violated: Minnesota Statutes, section 245C.04, subdivision 1, paragraphs (a) and (b). Fine: $400 Corrective Action Required: You must comply with background study requirements in Minnesota Statutes, chapter 245C. Within 10 days from receipt of this order, submit documentation demonstrating that background studies have been submitted and that the program has received notice to allow the identified staff persons above, to work in the children’s residential facility. 2. As a result of a licensing review on October 22, 2025, a DHS Licensor determined that the license holder allowed individuals (SP1 and SP3) to work in the children’s residential facility prior to receipt of notice. a. SP1 was hired and began working in the facility on April 28, 2022, however, the license holder did not receive notice until May 1, 2022; and b. SP3 was hired and began working in the facility on July 23, 2025, however, the license holder did not receive notice until August 4, 2025. Statute Violated: Minnesota Statutes, sections 245C.11 and 245C.13, subdivision 2, paragraphs (a) and (c). Fine: $400 Corrective Action Required: You must comply with background study requirements in Minnesota Statutes, chapter 245C. Within 10 days from receipt of this order, submit written documentation to your licensor detailing how compliance will be maintained in the future. Billing and Payment of the Fine DHS will send you an invoice for the $800 fine. Payment must be made as directed on the invoice. If you request a contested case hearing, as described below, do not pay the fine at this time. Following the contested case hearing, the Commissioner of DHS will issue a final order on this matter. Please note, you may not avoid payment of this fine by closing, selling, or otherwise transferring the license to a third party. If this occurs, each controlling individual are jointly responsible for payment. If you do not pay the fine on or before the date specified on the invoice and you did not request a contested case hearing, as described below, the Commissioner may issue a second fine, may not issue or reissue a license, or may suspend the license until the license holder pays the fine. Your Right to Appeal You have the right to appeal the fine. Your request must be in writing and clearly state that you are requesting a contested case hearing for this matter. Your request must be made before the deadlines provided below. If you do not meet this deadline, you lose your right to an administrative appeal. The timeline to appeal began when you received this order. If you are mailing your request, it must be sent by certified mail and postmarked within 10 calendar days from when you receive this order. Please send it to: Commissioner, Department of Human Services Office of Inspector General Legal Counsel’s Office Attn: Licensing Legal Unit PO Box 64953 St. Paul, MN 55164-0953 If your request is being personally delivered, it must be received by DHS within 10 calendar days from when you receive this order. Please bring it to: Commissioner, Department of Human Services Office of Inspector General Legal Counsel’s Office Attn: Licensing Legal Unit 444 Lafayette Road North St. Paul, MN 55155 Upon DHS’ receipt of your timely appeal, your case would be scheduled for a contested case hearing in front of an Administrative Law Judge. Following this hearing, the Commissioner of DHS will issue a final order. Legal representation at the contested case hearing You do not need a lawyer to appeal. However, a lawyer can help you with your appeal. The state or county will not get you a lawyer and will not pay for a lawyer. If you cannot afford a lawyer, you may be able to get free legal advice or help with your appeal. To find out if free help is available, contact: Volunteer Lawyers Network at 612-752-6677; Central Minnesota Legal Services at 612-332-8151; Southern Minnesota Legal Services at 651-222-4731; or go to www.lawhelpmn.org to find a local legal services program that may be able to help you. You can also find information on contested cases from the Office of Administrative Hearings website at https://mn.gov/oah/self-help. Click on Administrative Law Overview, then click on Administrative Law Contested Case Hearing Guide for a list of frequently asked questions. Legal Authority for this Licensing Action · DHS may impose a $200 fine for each background study violation under Minnesota Statutes, section 245A.07, subdivision 3, paragraph (c)(4)(iv). · Minnesota Statutes, section 245A.07, subdivision 3, paragraph (c)(5) states that license holders may not avoid payment of a fine by closing, selling, or transferring a license. · Minnesota Statutes, section 245A.04, subdivision 7, paragraph (d)(4), states that DHS shall not issue or reissue a license if the applicant, license holder, or controlling individual has an outstanding debt related to a license fee, licensing fine, or settlement agreement for which payment is delinquent. · Minnesota Statutes, section 245A.07, subdivision 3, paragraph (c)(2), states that that the license holder shall pay the fine assessed on or before the payment date specified, and if the license holder does not do so the commissioner may issue a second fine or suspend the license until the license holder complies. · License holders have a right to appeal licensing actions and request a contested case hearing, under Minnesota Statutes, chapter 14 and Minnesota Rules, parts 1400.8505 to 1400.8612. · NetStudy 2.0 is defined by Minnesota Statutes, section 245C.02, subdivision 13e. Questions If you have any further questions regarding this matter, you may contact Paula Halverson, Unit Manager, at 651-431-5653. Sincerely,
Paula Halverson, Unit Manager Licensing Division Office of Inspector General
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