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A seventh defendant in the alleged federal food-aid fraud case pleaded guilty in federal court Tuesday, admitting to helping suspects launder money meant to feed underserved children.
Mulata Ali, 38, of Minneapolis, pleaded guilty to one count of aiding and abetting in the theft of public money.
Mulata operated Franklyn Transportation LLC, which federal authorities allege fraudsters used as a shell company to launder more than $2 million of stolen federal money.
Dressed in a black winter coat and seated next to his two attorneys, Mulata spoke softly through a court interpreter as he admitted to the wrongdoing. Andrew Mohring, one of Mulata’s attorneys, said in court that people involved in the alleged scheme paid Mulata close to $100,000 to use his business’ bank account to move stolen money. Beyond that, Mohring said, Mulata couldn’t control any of the stolen $2 million.
“I did not know he was doing this,” Mulata said Tuesday of a suspect who used his bank account. “I could not control his actions.”
Mulata’s plea agreement calls for a guideline sentence of 24 to 30 months in prison and a payment of $95,099 in restitution—equal to the amount he received for allowing alleged fraudsters to use his bank account.
Mulata was one of 10 new defendants U.S. Attorney Andrew Luger charged in the case in March. Mulata’s charge came via an information felony, which meant he was expected to plead guilty.
A total of 60 defendants have been charged in the alleged fraud, which investigators estimate at $250 million. The case has mostly centered around suspects who allegedly received federal food-aid money through the sponsor, Feeding Our Future.
The alleged fraud reportedly played out in a simple fashion: Several organizations in the money chain reported serving thousands more meals than they actually did, or simply never served any at all, in order to receive more federal reimbursement dollars. Those funds were then passed through various shell companies before allegedly being pocketed by the perpetrators who used the money to buy vacation property, homes, and luxury vehicles, among other items.
According to federal authorities, Mulata allowed a co-conspirator to use his business bank account. Other co-conspirators who worked with S&S Catering and Youth Investors Lab–two other businesses implicated in the alleged scheme–transferred more than $2 million into the bank account
Mulata told the court that he incorporated Franklyn Transportation in the fall of 2020 with the intention of starting a trucking business.
At one point, federal district Judge Nancy Brasel told Mulata that his admission of guilt could impact his immigration status. Mulata is a permanent resident and not a U.S. citizen.
“If you plead guilty, you may be deported or removed from the U.S.” Brasel said.
“Yes, your honor,” Mulata responded, adding that he previously spoke to an immigration attorney about his situation.
Mulata and his attorneys did not speak to the media following his guilty plea.