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A Minnesota nonprofit named in FBI search warrant affidavits related to alleged fraud is suing the state for cutting off its federal funding.
St. Paul-based Partners in Quality Care filed a lawsuit in federal court Friday accusing the Minnesota Department of Education of violating its constitutional right to due process. The nonprofit, which has not been accused of or charged with fraud, also says the department flouted federal regulations governing the Child Nutrition Programs, which give federal money to state nonprofits and agencies to feed underserved children.
The department of education serves as a go-between by distributing the federal funds to local agencies like Partners in Quality Care, who then distribute it further to several smaller groups that are supposed to feed children.
The department cut off funding to Partners in Quality Care in January after FBI documents revealed that tens of millions of those dollars may have been misused for personal expenses instead. No person or agency named in the FBI documents has been charged with financial fraud in connection with the investigation, which is ongoing.
The lawsuit accuses the department of education of having a “vendetta” against Partners in Quality Care. It also says the department treated the nonprofit as a “scapegoat” to make up for the department’s own “maladministration” of the federal funds.
“MDE [Minnesota Department of Education] has recklessly concluded that PIQC [Partners in Quality Care] has, in fact, participated in the as-yet-unproven crimes that federal authorities are apparently still investigating,” the lawsuit reads. “MDE has done so without any evidence of specific wrongdoing by PIQC.”
The lawsuit is asking a judge to compel the department of education to resume federal payments to Partners in Quality Care, which says it funnels the federal dollars to daycares, afterschool programs, and religious organizations that feed children.
Department of Education spokesperson Kevin Burns declined to comment on the lawsuit, citing a policy about not commenting on pending litigation.
“MDE [Minnesota Department of Education] remains committed to ensuring that young people have access to healthy and nutritious meals,” Burns said.
An attorney for Partners in Quality Care declined to comment on the lawsuit Friday afternoon, and staffers for the nonprofit did not respond to requests from Sahan Journal for comment.
The FBI alleges that a wide-ranging network of nonprofit food sites and shell companies in Minnesota defrauded the federal government through the Child Nutrition Programs in the first two years of the COVID pandemic. As part of this investigation, the FBI conducted raids on at least 15 locations in January and unsealed three search warrant affidavits that same month.
The search warrants name more than two dozen people, nonprofits, food sites, and alleged shell companies as part of the alleged scheme. A key player in the search warrants is Feeding Our Future, an organization similar to Partners in Quality Care. The search warrants accused Feeding Our Future’s executive director, Aimee Bock, of fraud. Bock hasn’t been charged and has vehemently denied the allegations.
The search warrants also named Partners in Quality Care, which also does business as Partners in Nutrition. However, the documents never directly accused the nonprofit of engaging in fraud. The FBI, however, alleged that three vendors that worked with Partners in Quality Care committed fraud.
Shortly after the three search warrants went public, the department of education terminated its contract with Partners in Quality Care. The search warrants also prompted the department to terminate its contract with Feeding Our Future and cut off funding to the organization.
Partners in Quality Care appealed the decision, and a department of education panel sided with the nonprofit last spring, determining that the department acted too quickly in cutting the nonprofit off of federal funding. Following the panel’s decision, Partners in Quality Care applied several times for money from the Child Nutrition Programs but was denied by the department of education.
According to the lawsuit: In May, the department of education sent a letter to Partners in Quality Care once again barring the nonprofit from participating in the Child Nutrition Programs. The department cited the fraud allegations in the search warrants and the arrests of two men last spring who previously worked as vendors for Partners in Quality Care.
The men allegedly mishandled Child Nutrition Programs money meant to be used to feed children. The men were arrested and charged with passport fraud and allegedly trying to flee the country to avoid prosecution.
Partners in Quality Care criticizes the department’s reasoning as “assumed guilt by association.”
Partners in Quality Care’s lawsuit claims that the department’s actions prompted the nonprofit to cut food aid from more than 300 at-risk afterschool programs, 15 childcare centers, and 10 adult care centers. Partners in Quality Care also blames the department for its decision to cut its staff from 14 to eight employees.
The lawsuit follows a similar lawsuit Feeding Our Future filed against the department of education in 2020.
Feeding Our Future filed a lawsuit in state court accusing the department of improperly denying its applications to the Child Nutrition Programs. Feeding Our Future accused the department of discrimination because the vendors Feeding Our Future worked with were run by immigrants and people of color. Feeding Our Future dropped the lawsuit shortly after the FBI raids went public; the nonprofit later dissolved as an organization. Partners in Quality Care’s executive director, Kara Lomen, once ran Partners in Quality Care with Bock. Lomen and Bock had a falling out along the way, and Bock left Partners in Quality Care to run Feeding Our Future in 2018.