The organization was the brainchild of what most consider to be the first American to convert to Islam, named (Mohammed) Alexander Russell Webb.
Webb converted to Islam while he worked in the US Consulate in the Philippines. He then went to India on a fundraising mission to spread the faith to America: (Washington Post, December 21, 1892)
But all was not Paradise for Mr. Webb. He got into a dispute with one of his workers at the publishing company and she barricaded herself in the office demanding to be paid money he owed her. (This is the first article that refers to his organization as the American Moslem Brotherhood.) The worker, Nefeesa Keep, also alleged various monetary indiscretions from Webb, saying that he solicited and took large amounts of money from rich Muslims abroad and used them for his personal needs (7/16/1894):
She then added an additional charge of mail fraud:
The following year, an Indian prince came to America to see how his money meant for converting Americans to Islam was being spent, and he left sorely disappointed. The New York Times did a very large piece on this, interviewing both the prince and Webb. Webb strongly denied receiving most of the money from the Nawab and was found to be living in poverty.
Webb again in this interview denied wanting to convert most Americans to Islam.
Things quickly went downhill for Webb and his mission. There was lots of name-calling and blaming, and Webb became disillusioned at the idea of having any success in America. He blamed the lack of funds on his failure as well as some of his partners who split off from him.
Strikingly, even at a time that the media was explicitly racist in many guises, Alexander Russell Webb's faith was treated with respect - there was no "Islamophobia" in America in the late 19th century.