Testimony begins in alleged COVID-19 fraud scheme in Minnesota

May 2, 2024

Deena Winter

MINNEAPOLIS (Minnesota Reformer) – The director of Minnesota’s nutrition program testified Tuesday that she became concerned about an unusually high number of reimbursement claims soon after a pandemic relief program started to feed children under looser rules.

Emily Honer, director of Nutrition Program Services for the Minnesota Department of Education, testified all day Tuesday during the first federal trial of seven defendants out of the 70 people charged with defrauding the federal government of over $250 million through the meals program.

Once the pandemic shuttered schools and daycares, the U.S. Department of Agriculture loosened its rules for two programs to get food to people and allowed restaurants to participate.

That fueled massive growth for two Minnesota nonprofits: Partners in Nutrition and Feeding Our Future. The two organizations, founded less than five years earlier, grew from collecting a few million dollars a year before the pandemic to dispersing about $200 million each in 2021.

As sponsoring nonprofits, Partners in Nutrition and Feeding Our Future could enroll restaurants in the program while keeping 15% of the meal reimbursement money.

“We became concerned very quickly,” Honer testified. “As July and August went on, we had more and more site applications coming in for restaurants and I found that to be highly concerning.”

Before the pandemic, a distribution site would serve maybe 100 or 200 children, but those numbers began climbing to 500 or 600, she said. Most of the applications were coming from Feeding Our Future and Partners in Nutrition, which was the first to ask if it could partner with restaurants.

She checked business filings and learned a main vendor to Partners in Nutrition, Empire Cuisine & Market, a halal market, was incorporated in April 2020. The tiny Shakopee strip mall restaurant quickly began seeking reimbursement for more meals than the state’s biggest high schools.

Honer and her staff began asking the nonprofits questions about whether they could handle that many children and whether the sites were even open.

The reimbursement claims began rolling in at “incredibly high” numbers, Honer said.

“I had never seen payments of that magnitude before,” she said.

Her department asked the USDA to refer concerns about claims to the Officer of Inspector General because it wasn’t getting “reasonable answers” from Feeding Our Future or Partners in Nutrition.

In the fall of 2020, MDE consulted the USDA and concluded restaurants were not properly operating as sites, and halted the practice. Feeding Our Future had already been threatening legal action, and sued MDE in November 2020. Partners in Nutrition “seemed to take it better,” Honer said.

Empire Cuisine & Market pivoted and began acting as a vendor for other distribution sites. This turned out to be even more lucrative, as Empire became a vendor for about 30 sites, such as the Samaha Islamic Center in Shakopee, Cedar Run Townhomes in Owatonna, and Winfield Townhomes in Savage. It participated in both the summer and after-school programs.

Defendants Mohamed Ismail and Abdiaziz Farah were owners and operators of Empire.

Assistant U.S. Attorney Joseph Thompson spent hours walking through MDE records with Honer that showed meal numbers exploding with each month.

Empire’s summer program claims rose from 9,180 meals in May 2020 to 46,000 in August 2021.

Honer was particularly concerned about a site at Tot Park in Circle Pines, a suburb north of the Twin Cities, because it wasn’t even open — it was under construction.

Nonprofit Mind Foundry Learning Foundation began claiming 500 snacks and suppers were being distributed in January 2021, and three months later that number had climbed to 2,500. Then the nonprofit reported the exact same number of meals served April through June.

“That is not realistic because children get sick, people go on vacation, parents aren’t able to go and get the meal,” Honer said.

Nonprofit ThinkTechAct Foundation — sponsored by Feeding Our Future — began submitting claims it served 62,000 meals in January 2021 and the number climbed to 101,780 meals in August 2021.

Honer said she continued to express concerns to MDE leadership and the USDA signed off on “serious deficiency notices” to Partners in Nutrition and Feeding Our Future in March 2021. Honer also contacted the Federal Bureau of Investigation because she hadn’t heard from the USDA Office of Inspector General and MDE didn’t have investigatory authority.

MDE issued “stop pays,” meaning the sponsor can continue to submit claims but won’t get paid until after it provides documentation of invoices, menus, meal counts and attendance. In April 2021, Feeding Our Future got a temporary restraining order halting the stop pays, accusing the department of being racist and discriminatory against minorities.

A judge told MDE it didn’t have the authority to issue the stop pay in that manner. The claims continued to increase.

Frederick Goetz, attorney for Mukhtar Mohamed Shariff, asked Honer why MDE didn’t go to sites, and Honer said that was the sponsor’s job. Onsite monitoring was paused by the USDA during the pandemic, and instead MDE could do “desk audits.” Honer said she did not do a desk audit of any of the sites she was worried about.

Goetz said Honer told federal agents and prosecutors in March 2022 that upper MDE management was worried about the Feeding Our Future lawsuit and told her to stop looking into problems — although Honer testified Tuesday that she didn’t recall telling them that.

He suggested Honer couldn’t identify with the food insecurity being experienced by people who lost their jobs as taxi drivers, Uber drivers, housekeepers and restaurant workers.

Honer agreed that the Feeding Our Future lawsuit was “very nasty” and MDE staff was accused of being racist.

“I was frustrated but I was also confident that I was not [racist],” she said.

Her testimony continues Wednesday.