Instead of providing free meals to children in need, defendants on trial in the Feeding Our Future case sold some of the food at their Shakopee restaurant, profiting twice — once from government reimbursements and once from the food sales — an FBI forensic accountant testified.
Federal prosecutors called Pauline Roase to the witness stand Tuesday and Wednesday in the high-profile trial to describe how she traced a complex paper trail of financial records to reveal that only $3 million of the nearly $30 million in government reimbursements that went to Empire Cuisine & Market — the restaurant at the center of the trial — went toward buying food, as intended.
"Largely, I didn't find food purchases," Roase said.
The U.S. Department of Agriculture reimburses day cares, schools and nonprofits for giving free meals to low-income children after school and during the summer. Instead, Roase testified, defendants used most of that money for real estate, wire transfers to Chinese companies and other personal expenses.
And of the food they did buy, she testified, some went to purchase goat meat, coffee, mango juice and other items that weren't given to kids, but instead matched food and drinks sold at Empire Cuisine & Market.
The seven defendants are the first to go to trial out of 70 people charged in the sprawling case, which prosecutors have called one of the largest pandemic-related fraud cases in the country, totaling more than $250 million. Since the first charges were filed in 2022, 18 people have pleaded guilty.
The defendants on trial had 50 food distribution sites spanning across the state from Rochester to St. Cloud, and were largely overseen by St. Paul nonprofit Partners in Nutrition as well as St. Anthony nonprofit Feeding Our Future, which is at the center of the case.
The FBI began its massive fraud investigation into Minnesota's meal programs in April 2021. Starting the next month, Roase said she was tasked with following the money defendants received; they requested $49 million in reimbursements for providing 18 million meals, $5.6 million which went to Partners in Nutrition and Feeding Our Future in administrative fees.
Assistant U.S. Attorney Joseph Thompson showed photos that defendants took of bags of apples, cereal and other produce they gave out. But other invoices showed items like toothbrushes, cleaner and tea, which Roase said didn't show up in photos or on meal site menus. Thompson asked if that shows there was a mix of items bought for children's meals and for the Shakopee business, all reimbursed with the same federal money.
Roase answered yes.
Roase combed through a complicated string of invoices and business filings between the defendants, who created a tangled web of numerous LLCs during the pandemic, sending checks between themselves and other people charged in the case who aren't on trial.
"I kept following the trail until I found food," Roase said.
Some of those checks were listed as for "groceries," but Roase said she subpoenaed bank records for 300 accounts tied to defendants and found little food expenses, instead linking the money back to real estate, cars and other purchases.
Other checks were for "consulting" or related fees, which prosecutors have said were shell companies to launder money. On Wednesday, prosecutors showed consulting contracts backdated to 2021 created by one defendant a week after FBI search warrants were executed, publicly revealing the investigation.
Prosecutors have said some food vendor invoices from defendants were completely made up, not serving any food. But Roase said others from reputable wholesalers that supplied food were replicated by defendants, submitted to support reimbursement claims for different meal sites at different locations.
Empire Cuisine & Market — which enrolled in April 2020 in the meal programs — relied on the federal reimbursements for revenue during the pandemic, Roase said. The restaurant drew about $1 million in restaurant sales from 2020 to 2022, while the $30 million from meal programs was a surge in money for a small store that drew about $1,500 a day in sales pre-pandemic, she said.
"I don't see how $30 million could flow through it," Roase said of the small storefront.
Prosecutors have said defendants submitted fake invoices and rosters of made-up children's names to inflate the number of meals they claimed to serve, buying luxury homes, new cars, gold jewelry and lavish trips to Dubai and the Maldives.
Defense attorneys have countered that their clients served real food and earned a fair profit.
The defendants — Said Shafii Farah, Abdiaziz Shafii Farah, Mohamed Jama Ismail, Abdimajid Mohamed Nur, Abdiwahab Maalim Aftin, Mukhtar Mohamed Shariff and Hayat Mohamed Nur — were charged in 2022 with wire fraud, money laundering and other crimes. They collectively received about $41 million in federal reimbursements and money from other defendants in the case.
Defense attorney Andrew Mohring sought to distance his client, Shariff, from the allegations on Wednesday, pointing out that others also ran Shariff's organization and business bank accounts. Mohring repeated what defense attorneys have brought up throughout the trial: that USDA waivers during the pandemic relaxed rules, allowing defendants to give out seven days' worth of meals at once, so the number of meals rose rapidly.
Defense attorneys will continue cross-examination of Roase on Thursday. The prosecution has called more than 30 witnesses in the last four weeks. Prosecutors expect to rest their case this week before defense attorneys call witnesses next week.
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FBI expert: Feeding Our Future defendants used money meant for kids' meals to supply their Shakopee restaurant - Star Tribune
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