Diana E. Murphy federal courthouse is shown in Minneapolis Friday, May 17, 2024.
BY: DEENA WINTER
MINNEAPOLIS (Minnesota Reformer) – An FBI accountant testified Tuesday that the seven defendants connected to a Shakopee halal restaurant only spent a few million dollars on food out of the $49 million they got from the federal government to serve children free meals during the pandemic.
FBI forensic accountant Pauline Roase’s job was to follow the money, and she has examined about 3,000 bank accounts so far in the sprawling federal case. She testified that the fraud started out small, with a nonprofit claiming to give out food at the Samaha Islamic Center in Shakopee in April 2020.
The number of sites grew, spiking in January 2021 until the group ultimately claimed to have given out 18.8 million meals from 50 sites across the state, claiming $49 million in federal reimbursement dollars.
Roase is expected to be one of the last witnesses to testify for the prosecution in the trial that is now on its 16th day. After that, defense attorneys say they will call multiple witnesses.
The seven defendants — Abdiaziz Shafii Farah, Mohamed Jama Ismail, Abdimajid Mohamed Nur, Said Shafii Farah, Abdiwahab Maalim Aftin, Mukhtar Mohamed Shariff, and Hayat Mohmed Nur — are the first to go on trial out of 70 people charged so far. Federal prosecutors have said it was the nation’s largest pandemic relief fraud, in which $250 million from the U.S. Department of Agriculture was misused.
Defense attorneys say they actually did distribute meals, and were allowed to “bundle” and give out multiple meals at once, multiplying their numbers.
Roase said she began her investigation by looking at the entities getting the most money. Safari Restaurant had already received $12 million in less than a year, claiming to feed thousands of meals per day from a busy, congested Lake Street location.
“It just didn’t seem possible,” Roase testified.
The two nonprofits at the heart of the case — Feeding Our Future and Partners in Nutrition — were supposed to be monitoring over 700 distribution sites to make sure they were actually giving away food. But prosecutors allege they were middlemen and part of the fraud, taking cuts of 10 to 15% of the more than $100 million paid out in 2021.
“It was definitely very concerning,” Roase said. “It was alarming, actually.”
Roase said numerous LLCs were set up and money was funneled through them “to hide the fact that they were not actually buying food.” Instead, she said, defendants bought pricey cars, homes and property — wiring money to build apartments in Kenya and hundreds of thousands of dollars to textile and tire companies in China.
The state Department of Education also had an oversight role and officials there grew alarmed by the escalating number of sites and federal money flowing out. The agency stopped allowing restaurants to distribute meals directly in October 2020, so those restaurants pivoted to acting as vendors for nonprofits, and continued in the program.
One of the biggest vendors was Empire Cuisine & Market, a small halal restaurant and market in a Shakopee strip mall. It had just been incorporated by defendants Abdiaziz Farah and Mohamed Ismail of Savage in April 2020, and soon was contracting with a couple dozen distribution sites to prepare meals.
The restaurant received a total of nearly $30 million in federal funds, Roase said, and spent about $3 million of it on food. Some of that money appeared to be food for the Shakopee restaurant, because that type of food wasn’t allowed in the USDA program — such as goat meat, beef, lamb, camel and chicken — but was on Empire’s menu.
Before Empire started getting federal meal money, the restaurant averaged $1,500 in net sales per day; its most popular menu items were gyros, goat meat and beef steak, Roase said.
One of the nonprofits it contracted with was ThinkTechAct, which opened a bank account in September 2018 that was largely dormant — outside of $73,000 it received from the city of Minneapolis — often holding less than $200 through September 2020.
But in February 2021, money started pouring in. Not a dollar was spent on food from the account before the nonprofit began depositing thousands of dollars in checks, Roase said.
ThinkTechAct would go on to get $18 million through Partners in Nutrition, and $3.8 million through Feeding Our Future. Most of the money — $15.4 million — went to Empire Cuisine & Market and an affiliated LLC. Just $66,500 was spent on food, Roase said.
Prosecutors say they are nearly done presenting their case, before the defense gets its chance to counter with its own witnesses.
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