Feeding Our Future trial: thousands of meals purportedly served at a park. It was closed.

The Feeding Our Future trial is being held at the Diane E. Murphy United States Courthouse in downtown Minneapolis. Photo by Max Nesterak/Minnesota Reformer.

FBI Special Agent Jared Kary heard a park in Circle Pines was closed due to construction, and yet people were getting reimbursed by the federal government after claiming to serve meals to 2,000 children per day there.

The FBI investigation would grow into a sprawling $250 million fraud case, the burly, silver-haired FBI agent told jurors Wednesday. The money was meant to feed hungry children as schools and child care centers closed during the pandemic, ending an important pipeline for healthy food.

Kary testified in the first case to go to trial in what’s been dubbed Feeding Our Future — named after the nonprofit prosecutors say was at the center of the scheme. Seven people are charged with defrauding the federal government of over $40 million. In all, 70 people have been charged in the case; 18 have pleaded guilty.

The Minnesota Department of Education administered the program for the U.S. Department of Agriculture. Emily Honer, MDE director of nutrition program services, testified that she became suspicious of big-dollar reimbursement requests and alerted her superiors, the USDA, and eventually, the FBI.

Kary said the FBI began by looking at the people getting the most money, and the “drastic increase” in payments going out.

“It was massive,” he said. “It definitely warranted an investigation.”

The number of meal distribution sites was huge, and their locations were questionable, he said.

“Some of them were sort of on top of each other or right down the street,” Kary said. “You ask, ‘How could this possibly be happening?’”

Prosecutors allege about 10% of the money was spent on food; the rest went to luxury cars, homes, travel, jewelry and property — covered up with bogus receipts, fake invoices, imaginary children, bribes and kickbacks,

Many of the bank records subpoenaed by a grand jury showed brand new accounts, filled solely with money from the federal government, Kary said, which led agents to believe corporations were created “to get this money.”

The FBI first zeroed in on Empire Cuisine & Market in Shakopee — a former beauty salon converted into a halal market — that was paid about $30 million in federal funds during its first 18 months of existence, from mid-2020 through January 2022.

Defendants Abdiaziz Shafii Farah and Mohamed Jama Ismail, both of Savage, incorporated Empire Cuisine & Market on April 1, 2020, and got permits to convert it into a grocery store. Eighteen days after incorporating the LLC, they told their sponsoring nonprofit, Partners in Nutrition, they were ready to distribute 250 meals at the Samaha Family Center in Shakopee — which Kary said has a parking lot big enough for about 10 cars.

They opened a bank account for their company on May 12, 2020, and began filing claims seeking reimbursement from the government for meals.

Kary spent hours Wednesday walking the jury through emails, incorporation papers and MDE documents showing how the number of distribution sites sprouted all over the state, with the number of meals served at each steadily increasing with time, spiking in March 2021.

There were red flags: Emails showed some imams reached out to Partners in Nutrition saying mosques were being registered as distribution sites without their knowledge.

The FBI looked at the Dar Al-Farooq mosque in Bloomington, which Kary said was a “significant site” due to the large meal counts and dollars being reimbursed to the site sponsor.

The mosque allowed the site to be used to distribute food to make money, which helped finance an East African cultural campus, developed by Afrique Hospitality Group . The attorney for Afrique CEO Mukhtar Mohamed Shariff said he never defrauded anyone in his pursuit of a dream to build the campus.

Emails and marketing materials with Shariff’s name on them said the cultural campus would be buttressed by “large, consistent revenue” with high profit margins from 2,500 kids getting food through the nutrition program.

MDE official didn’t visit any sites or even do ‘desk audits’

Defense attorneys have argued their clients actually provided all those meals and were merely making a fair profit off the government program. They portray the program as overly complex, and accuse the nonprofit sponsors and state bureaucrats of failing to make sure the program was run correctly.

Honer, the director of the state’s nutrition program, acknowledged Wednesday she was not aware of any MDE employees who went to the locations where people claimed to be serving thousands of meals per day — and getting reimbursed big bucks for it.

She said her employees didn’t go to the sites because that was the responsibility of the nonprofit groups overseeing the vendors. And those sponsoring agencies — Feeding Our Future and Partners in Nutrition — now stand accused of enabling and sometimes participating in the fraud.

Honer said due to “a very nasty lawsuit” by Feeding Our Future, MDE employees were often being hauled into court and had to follow the protocol of working through concerns with the nonprofit sponsors overseeing the sites.

When the FBI investigation burst into public with raids in January 2022, Republicans blamed the Democratic-Farmer-Labor Party and Gov. Tim Walz for failing to prevent the fraud. Walz said the state’s hands were tied by a court order to resume payments, and an FBI request to continue the payments while it investigated.

Ramsey County District Judge John Guthmann didn’t order MDE to stop payments, but said he thought the agency was not legally allowed to halt payments, so MDE resumed payments.

Honer testified that MDE opted to waive in-person monitoring of sites, but could still do “desk audits.” But Honer said she didn’t do any desk audits and didn’t ask any of her subordinates to do them — despite concerns that prompted her to go first to the USDA Office of Inspector General, and then the FBI, in April 2021.

Defense attorneys highlighted the fact that outside of a month where payments were stopped to some sponsors, MDE kept paying reimbursement claims until the FBI investigation went public.

They painted Honer as out of step with working class East Africans who lost jobs in restaurants and hotels and driving taxis and Ubers during the pandemic, and repeatedly asked her about Feeding Our Future’s allegations that discrimination was at play.

Honer brushed off charges of racism and said she’s a “very proud” member of the Red Lake Band of Chippewa, and has experienced racism.

“I know how it feels,” she said.

She kept pressing with her concerns because she said she’s passionate about  providing healthy meals to children, and worried that if the programs were abused, they’d be taken away.

Honer acknowledged the USDA had issued broad waivers to boost the programs during the pandemic, but she said there were no waivers allowing people to get rich off the program.

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