One of the key players in a federal food aid fraud scheme will dissolve itself and pay the state its remaining assets, according to a settlement agreement filed in state court Thursday by the Minnesota Attorney General Keith Ellison.
The settlement is for a lawsuit also filed Thursday in court by Ellison alleging Partners in Nutrition violated the Minnesota False Claims Act. The lawsuit details roughly $54 million in federal dollars that Partners diverted to those running food sites including Mind Foundry Foundation, Multiple Community Services, Gedo Community Services and Minnesota’s Somali Community. All of these sites were run by people who have since pleaded guilty in court to fraud.
Partners in Nutrition agreed to pay the state $18.5 million, which the settlement describes as the amount of the nonprofit’s remaining assets from operating in the federal child nutrition programs.
“Claiming millions of dollars in taxpayer-funded reimbursements for astronomical amounts of meals that were never delivered to Minnesota’s children is despicable,” Minnesota Attorney General Keith Ellison said in a statement.
“Today’s settlement holds PIN accountable for defrauding the State and recoups $18 million in taxpayer funds, but it cannot adequately address the erosion of Minnesotans’ trust in government programs that bad actors like PIN and Feeding Our Future have caused.”
An attorney for Partners in Nutrition declined to comment Thursday afternoon.
The settlement comes one year into an investigation of Partners in Nutrition by the Attorney General’s Office, for which the nonprofit provided more than one million pages of documents.
Ellison’s case against Partners in Nutrition is civil. No one who worked for Partners in Nutrition has been charged with a crime in the larger federal food aid fraud case centered around a rival organization, Feeding Our Future, which has been ongoing since 2022. Still, a number of food site operators who Partners in Nutrition diverted federal money to have been convicted of fraud.
The settlement notes that Partners in Nutrition “denies any liability” related to fraud allegations and agreed to the settlement “merely to avoid having to engage in prolonged litigation of contested claims.”
Like Feeding Our Future, Partners in Nutrition acted as a sponsor, or go-between, that facilitated federal money to dozens of food sites that claimed to feed meals to underserved children during the pandemic.
These food sites were operated by other nonprofits, which submitted meal counts and rosters of children supposedly eating the meals to Partners in Nutrition.
Partners would then submit these claims to the Minnesota Department of Education, which in turn submitted them to the federal government for reimbursement. Once Partners in Nutrition received the federal money, it would then distribute the dollars to the food sites while keeping a cut for administrative purposes.
The fraud was simple in structure: Some organizations reported serving more meals than they actually did in order to receive more federal money. Some never actually served meals.
The settlement essentially absolves the nonprofit from fraud claims, though Ellison’s office said emphasized that it doesn’t release Partners’ “officers or employees from personal civil liability” and that the Attorney General’s Office “continues to actively investigate these entities and individuals for potential civil violations.”
“This fight is not over,” Ellison said in a statement. “My office continues to actively investigate a number of individuals and entities affiliated with PIN for violations of the Minnesota False Claims Act.”
Questionable meal counts, lack of oversight
Ellison’s lawsuit alleges that Partners in Nutrition and its executive director, Kara Lomen, knowingly committed fraud throughout the pandemic. As a sponsor, Partners in Nutrition was tasked with monitoring its food sites and vetting the meal counts each food site submitted. But the lawsuit alleges that Lomen directed sites to submit false meal claims.
This included allegedly directing Abdiaziz Farah, who co-owned Shakopee-based Empire Cuisine and Market, which supplied food to meal sites, to use the same meal counts it submitted for Mind Foundry that it used for an unrelated food site called Samaha.
“Starting today, can you transition Samaha meal counts and count them under Empire?” Lomen allegedly emailed Farah in July 2020.
Farah is one among many to be convicted in the federal food aid case.
The lawsuit also alleges Lomen instructed her employee Julius Scarver to lie in forms submitted to the state and say that he monitored food sites when he in fact didn’t monitor them.
When Partners in Nutrition employees did monitor food sites that they were sponsoring, they allegedly found problems. The lawsuit details instances where Partners in Nutrition employees monitored two Mind Foundry sites and found no one present during times when Mind Foundry claimed it was serving meals. Still, Partners in Nutrition sent meal claims for these sites for reimbursement by federal dollars.
The lawsuit also alleges Lomen submitted supporting documentation of meals served to the state after they were due.
“Just send [the attendance] when you can and I will try to sneak it in before they [MDE] notice it is missing,” Lomen allegedly wrote Farah and Mahad Ibrahim, another since convicted fraudster who ran Mind Foundry, in July 2021. “Technically we should have all of the attendance and everything before we process.”
Mind Foundry would submit required attendance records to Partners in Nutrition missing key information like children’s names and birthdates, according to the lawsuit. But instead of questioning the claims, Lomen would order those submitting them to “fix” the information, “often resulting in higher claims and more money,” the lawsuit alleges.
As in the Feeding Our Future case, the lawsuit argues that Partners in Nutrition should have scrutinized the numbers of meals claimed and kids served based on the implausibility of the figures. Mind Foundry, for example, at one point claimed to serve 4,500 children a day through a handful of sites in Owatonna — more children than are enrolled in the area’s entire public school system.
So far in the federal food aid fraud case, 80 defendants have been charged, 68 of them have been convicted in court or pleaded guilty and 27 have been sentenced.
