First guilty pleas made in Feeding Our Future fraud case
The first three guilty pleas in the nonprofit Feeding Our Future fraud case were entered on Thursday.
A total of 49 people have been charged so far in connection with the alleged $250 million scheme, which involved the misuse of COVID-19 childhood nutrition relief funds.
Bekam Merdassa, 40, from Inver Grove Heights, Hanna Marekegn, 40, of Edina, and Hadith Ahmed, 34, of Eden Prairie, each entered a guilty plea to one count of conspiracy to commit wire fraud.
After pleading guilty, the three will face the following amount of time in prison as part of the deal:
- Merdassa – 24-30 months
- Marekegn – 37-46 months
- Ahmed – 46-57 months
The three will be officially sentenced at a later date. All three charges carry a maximum sentence of five years in prison.
In the plea deal, Merdassa admitted to taking $343,086 from the food program by creating a fake organization called Youth Inventors Lab to allegedly provide meals to kids in need via a vendor, S&S Catering.
The fake company claimed to have served 1.3 million meals between December 2020 and June 2021, receiving more than $3 million in disbursements.
Marekegn falsely claimed to have fed more than two million meals through her business, Brava Cafe, in Minneapolis, obtaining $7.1 million in funds in the process. She will have to pay back millions to the government, including forfeiting her million-dollar home in Medina that she bought with funds gained through the scheme, according U.S. Attorney's Office.
Ahmed was responsible for monitoring and supporting sponsor sites at Feeding Our Future, according to the U.S. Attorney's Office. He created a shell company, Mizal Consulting LLC, to receive and hide the kickback payments that was allegedly flowing into the organization. The payments were disguised as "consulting fees," according to his guilty plea.
In all, Ahmed received more than $1 million in bribe and kickback payments from people and companies involved in the scheme.
In addition, Ahmed also admitted to creating a site under the organization's sponsorship called Southwest Metro Youth. He used that fake organization's name to claim to be serving around 2,000 children a day.
The charges were announced in September. Feeding Our Future executive director Aimee Bock and others are accused of overseeing a massive scheme to defraud Minnesota Department of Education funds by creating dozens of shell companies to enroll in COVID relief programs as Federal Child Nutrition Program sites, creating thousands of fictitious children that they claimed to be serving on a daily basis.
The Sahan Journal reports that requirements for states accessing federal Child Nutrition Programs were relaxed in March 2020 as COVID-19 unfolded, with Feeding Our Future – which was formed in 2016 – greatly ramping up the amount of funds it was accessing and distributing.
The potential fraud had been flagged by the Minnesota Department of Education in 2020, with the department stopping payments in early 2021 only for Feeding Our Future to sue the state, claiming discrimination.
An FBI investigation began in spring 2021, and in early 2022 Attorney General Keith Ellison moved to block the nonprofit from dissolving, asking a court to supervise the organization's disbanding as his office investigated the claims of fraud.
Besides individuals tied to the fraudulent nonprofit, owners and operators of five Minnesota restaurants were also allegedly involved in the scheme: Safari Restaurant in Minneapolis; Brava Restaurant & Cafe in Rochester; Empire Cuisine and Market in Shakopee; S&S Catering in Minneapolis; and Wacan Restaurant in Minneapolis each received millions of dollars in fraudulent funds.
U.S. Attorney for Minnesota Andrew Luger said an investigation found that $50 million-worth of property was confiscated, including vehicles, real estate, bank accounts and jewelry.
