What to know about the fraud investigation into Minnesota nonprofit Feeding Our Future

A Star Tribune reporter and photographer stood outside the nonprofit offices of Feeding Our Future on Jan. 20 as FBI officers raided the building to confiscate and cart away files.

FBI investigators allege that Feeding Our Future played a central role in a "large-scale scheme" to defraud the government, using tens of millions of dollars meant to reimburse community groups, vendors and nonprofits for providing meals to children. Investigators allege that almost none of the money went to feed kids in need and instead funded personal costs — from luxury cars and lavish trips to lakefront homes.

Since that day, a team of Star Tribune reporters have been following the investigation and covering related developments in the case, publishing nearly a dozen articles so far.

What fraud is alleged?

On Jan. 20, more than 200 law enforcement officers raided more than a dozen sites in Minnesota including the St. Anthony offices of Feeding Our Future and executive director Aimee Bock's Rosemount home.

In more than 200 pages of U.S. District Court search warrants that were unsealed later that day, an FBI special agent detailed an elaborate scheme to defraud the USDA of millions of dollars by taking money meant to feed children in need. Investigators allege that the money was instead funneled to an array of entities to be laundered and used to buy jewelry, a Porsche, lakefront homes in Prior Lake, a $1 million Plymouth home, a $500,000 apartment in Kenya and other personal property, trips and items.

In a court order filed Jan. 21, prosecutors moved to seize 14 properties owned by people accused in the scheme.

How much money do investigators say was stolen?

Feeding Our Future received $244 million in federal funds through the federal nutrition programs from 2018 to 2021, according to the FBI, which has not alleged that all of those funds were misappropriated. According to FBI search warrants unsealed so far, investigators allege at least $48 million in federal nutrition aid was spent on lavish trips, luxury homes and other personal expenses.

Why is the Minnesota Department of Education involved?

In Minnesota, federal funds for food go to two agencies — the Department of Human Services (DHS) and the Minnesota Department of Education (MDE). DHS oversees programs such as food stamps or grants to food shelves. MDE distributes funding to reimburse schools and after-school programs for providing snacks and meals to children and adults in need. That includes two key USDA programs — the Child and Adult Care Food Program (CACFP) and Summer Food Service Program (SFSP).

"Sponsors," such as school districts and nonprofits, apply to MDE to be a sponsor and then may manage multiple sites where food is distributed such as community centers or affordable housing complexes. It's up to sponsors to oversee the paperwork and reimbursement claims for its sites.

The meals children receive during the school day, such as free or reduced-price lunch, aren't part of these specific programs or affected by the investigation.

How did the investigation begin?

The education department noticed rapid growth in the number of community sites sponsored by Feeding Our Future in 2020. The department said it didn't receive sufficient information to explain the sudden increase and reported irregularities to the USDA in 2020. The education department also denied dozens of site applications starting in December 2020. By early 2021, the department had declared Feeding Our Future "seriously deficient" over incomplete financial audits and a lapsed nonprofit status with the IRS and issued a "stop pay" order halting payments to Feeding Our Future.

Feeding Our Future sued the state and claimed the education department was discriminating against a nonprofit that worked with racial minorities. In April 2021, Ramsey County District Judge John Guthmann told the department it didn't have the authority to stop payments and ordered the department to resume payments. That same month, the education department provided information to the FBI, which began investigating in May.

What is Feeding Our Future?

Aimee Bock started the nonprofit in 2016 "to increase healthy food access for youth and senior[s]," she wrote in tax forms. The organization's primary funding is from federal USDA nutrition programs.

In her first media interview after the FBI raid, Bock told the Star Tribune she employed 65 staff members who spoke a total of 17 languages. Feeding Our Future quickly became the largest independent sponsor of federal food programs in the state, Bock said. Feeding Our Future received $197 million in federal nutrition program reimbursements last year — up from $307,000 in 2018, according to FBI documents. Bock said in an interview that she was working with 140 subcontractors to distribute 100,000 meals a day to kids across Minnesota — from Willmar to Burnsville.

On Feb. 25, the nonprofit's three board members announced they had voted unanimously to dissolve the organization in part because the FBI had frozen its bank accounts.

Who leads Feeding Our Future?

Bock is the executive director and founder. Feeding Our Future also has three board members, who have oversight of the nonprofit. As of January, the three board members were Ali Egal, Jamie Phelps and John Senkler, according to forms filed with the Minnesota Attorney General's Office. Egal, Phelps and Senkler couldn't be reached for comment. Messages left with former president Benjamin Stayberg weren't returned. As of February, the three board members are Egal, Henry Komolo and Amal Sala.

Bock incorporated Feeding Our Future with the state in 2016 and initially listed board members Christine Twait and Kara Lomen as incorporators. Bock worked at the time with Twait and Lomen at Partners in Nutrition, also known as Partners in Quality Care, a St. Paul-based nonprofit that also sponsors federal nutrition programs. Lomen and Twait said in a statement that they had no role in Feeding Our Future "as a functioning agency," adding that since Bock ran the organization as an active sponsor in 2018, they weren't involved.

What's Feeding Our Future's response to the allegations?

Bock said she never stole money nor has seen any evidence of fraud among her subcontractors. She said Feeding Our Future visited subcontractor sites at least monthly to verify they were following federal guidelines and only reimbursed subcontractors after they provided meals. She said the for-profit businesses could use their earnings for personal use.

Bock accuses the Minnesota education department of supplying the federal government with a bogus criminal case to derail her civil case against the state, which was scheduled to go to trial in April. She also alleges discrimination, saying the department held up approvals and payments because she works with organizations led mostly by Somali immigrants.

In response to other nonprofit leaders who said they find Feeding Our Future's numbers of meals unexplainable, Bock said she found a way to scale up her work by operating outside of the usual system of buying food from grocery stores and food banks, instead purchasing from local organizations like East African restaurants and keeping the money in the community.

How could possible fraud happen with these programs?

Minnesota Department of Education officials told FBI investigators that relaxed guidelines from the USDA during the COVID-19 pandemic made these programs more vulnerable to abuse. The USDA loosened guidelines on the types of organizations allowed to participate in the programs, opening them up to for-profit restaurants and allowing meals to be bundled — giving more than one day's worth of meals in a pack — and consumed off-site.

Nonprofit experts say that may have expanded access to more kids, but it also made it hard to maintain the integrity of what the federal meal programs were established to do.

Also, because of the pandemic, the USDA lifted in-person monitoring requirements. The MDE spokesperson said the agency and sponsors conducted site visits virtually before it resumed in-person visits last summer. "At this time, we don't anticipate using the in-person waivers broadly going forward," she added. The department credited its "diligent monitoring" for helping identify "concerning activities in the food programs so quickly" in 2020.

Who is investigating?

The FBI is leading the investigation with assistance from the IRS, Minnesota Bureau of Criminal Apprehension, U.S. Postal Inspection Service and U.S. Marshals Service.

The Minnesota Attorney General's Office, which regulates all charities that solicit donations in the state, is also conducting an investigation, according to a person the office requested data from this month.

At the Legislature, Legislative Auditor Judy Randall told senators requesting an audit of the education department that her office is already conducting an audit of all state and federal COVID-19 aid received by state agencies from March 2020 to April 2021, including the Minnesota Department of Education.

Who is accused of fraud or wrongdoing?

No one named in search warrants has been arrested or charged with any crime in this case.

Investigators accused Bock, the executive director of Feeding Our Future, of receiving a $310,000 kickback from a restaurant owner involved in the scheme. She denied it was a kickback, saying she received the money as payment for selling a shuttered child care center she owned in Burnsville.

The Star Tribune has attempted to interview 17 people accused of fraud by the FBI. One declined to comment and most did not respond to calls, e-mails or letters. Investigators name three prime contractors who worked with Feeding Our Future as misusing federal funds: Safari Restaurant & Event Center, Empire Cuisine & Market and S&S Catering. Salim Said, Ahmed Ghedi and Ahmed Artan all have ties to Safari Restaurant or sent money to Safari Restaurant and its associates and personally benefited from the federal money, investigators say. Abdiaziz Farah and Abdimajid Mohamed Nur led Empire Enterprises or Empire Cuisine while Qamar Ahmed Hassan ran S&S Catering; investigators allege they all misused federal money.

Some of the people named in court documents had a history of criminal and financial problems, including felony convictions related to theft. Bock said she didn't conduct background checks and that "many of the young black men in our state have records, but when given a chance they have shown that their past does not define their future or even their present."

If the fraud allegations are true, who could be criminally or legally liable and when could charges be filed?

No one named in search warrants has been charged with any crime. Criminal justice experts say it could be months before charges, if any, are filed; if charges involve mail fraud and money laundering, prison sentences could be lengthy.

Attorneys who work with nonprofits say it's unlikely Feeding Our Future's board members would be criminally or legally liable in a fraud case. Unlike corporate boards or college and university boards, state and federal laws give more protection to the unpaid volunteers who serve on nonprofit boards, making them immune from legal or criminal liability, unless they engaged in willful misconduct. The Attorney General's Office, which regulates charities that solicit in Minnesota, could take broader action such as filing a court order to remove board members or shut down a charity.

What are local and state politicians' response to the allegations?

After the news broke, Gov. Tim Walz's press secretary, Claire Lancaster, said: "This was an appalling abuse of federal funding and public trust. We're grateful to the Minnesota Department of Education for catching and stopping this fraud – this scheme was brought to light because of their persistent efforts to stop it."

Four Republican state senators have called for an audit of the Minnesota Department of Education. Several Republican and Democratic legislators also issued statements condemning the alleged fraud.

U.S. Rep. Ilhan Omar, whose district includes Feeding Our Future's headquarters, said the alleged wrongdoing, if true, is "reprehensible." She also wrote a letter to the U.S. Secretary of Agriculture, Thomas Vilsack, asking for more information about how the agency is investigating fraud and preventing it from happening.

Minneapolis Mayor Jacob Frey and state Sen. Omar Fateh, DFL-Minneapolis, have returned donations given by people now named in the FBI search warrants. Minneapolis Council Member Jamal Osman founded one of the nonprofits that authorities allege misused money, but he said he cut ties with the group before the period outlined in search warrants. Frey, Osman and other state leaders had also met with the education commissioner or Feeding Our Future sites previously, but said they didn't advocate for Feeding Our Future specifically.

In February, Sharmarke Issa, the board chair of the Minneapolis Public Housing Authority, resigned after a building he helped buy was tied to a federal investigation. He said he resigned for personal matters, not because of the investigation. Authorities moved to seize 14 properties; Issa is part-owner of one of those buildings along with Abdi Nur Salah, a former senior aide to Frey who also resigned in February. Issa is not named in any FBI documents, but Salah is, with investigators alleging he improperly benefited from the scam, using federal nutrition money to buy properties. Salah and his attorney dispute the government's allegations.

Is this impacting other Minnesota nonprofits?

Nonprofits worry the allegations will bolster distrust among policymakers and the public, making it more difficult for nonprofits to lobby for aid, especially for other food programs. Other nonprofits say they sought money from the education department but the increased scrutiny on these meal programs may have ended up leaving some legitimate organizations without funding.

The Minnesota Department of Education has stopped all funding to Feeding Our Future and a second nonprofit, Partners in Quality Care, because the St. Paul organization had also distributed federal child nutrition funds to some of the same vendors Feeding Our Future funded that FBI investigators said spent little to no money on meals for kids. Partners in Quality Care, which wasn't searched by FBI investigators, said it immediately cut ties with the vendors and will appeal the education department's decision.

Hundreds of organizations that worked with Feeding Our Future and Partners in Quality Care are now stuck without funding to reimburse the cost of providing snacks or meals, such as St. David's Center for Child and Family Development in Minnetonka and House of Refuge in St. Paul. The Minnesota Department of Education, Minnesota Department of Human Services and the Children's Cabinet said they are working to help legitimate sites secure a new sponsor so they can continue to operate their programs.