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A Minnesota Education Department official testifies about reporting Feeding Our Future fraud to the FBI. Minnesota Reformer

The director of Minnesota’s nutrition program testified Tuesday that she was concerned about an unusually high number of reimbursement claims shortly after a pandemic relief program began to feed children under looser rules.

Emily Honer, director of Nutrition Program Services for the Minnesota Department of Education, testified all day Tuesday at the first federal trial of seven defendants among the 70 people accused of defrauding the federal government of more than $250 million through the meal program.

When the pandemic closed schools and daycares, the U.S. Department of Agriculture relaxed rules for two programs to feed people and let restaurants participate.

That fueled tremendous growth for two Minnesota nonprofits: Partners in Nutrition and Feeding Our Future. The two organizations, founded less than five years earlier, grew from raising a few million dollars a year before the pandemic to distributing about $200 million each in 2021.

As sponsoring nonprofits, Partners in Nutrition and Feeding Our Future can enroll restaurants in the program while keeping 15% of the meal reimbursement funds.

“We quickly became concerned,” Honer testified. As the months of July and August progressed, more and more planning applications were received for restaurants and I found that very worrying.”

Before the pandemic, a distribution center might serve 100 or 200 children, but those numbers started to climb to 500 or 600, she said. Most requests came from Feeding Our Future and Partners in Nutrition, which was the first to ask if it could collaborate with restaurants.

She checked company files and discovered that Empire Cuisine & Market, a halal market, was a main supplier to Partners in Nutrition and was founded in April 2020. The small restaurant in the Shakopee strip mall soon began charging for more meals than the state’s largest high schools.

Honer and her staff began asking the nonprofits questions about whether they could handle so many children and whether the locations were open.

Claims for reimbursement started coming in at “incredibly high” numbers, Honer said.

“I had never seen payments of that size before,” she said.

Her department asked the USDA to refer concerns about claims to the Office of Inspector General after not receiving “reasonable responses” from Feeding Our Future or Partners in Nutrition.

In the fall of 2020, MDE consulted with the USDA and concluded that restaurants were not functioning well as venues and ended the practice. Feeding Our Future already threatened legal action and sued MDE in November 2020. Partners in Nutrition “seemed to take it better,” Honer said.

Empire Cuisine & Market pivoted and began acting as a supplier to other distribution sites. This proved to be even more lucrative, as Empire became a supplier to approximately 30 locations, such as the Samaha Islamic Center in Shakopee, Cedar Run Townhomes in Owatonna and Winfield Townhomes in Savage. It participated in both the summer and after-school programs.

Defendants Mohamed Ismail and Abdiaziz Farah owned and operated Empire.

Assistant U.S. Attorney Joseph Thompson, along with Honer, spent hours going through the MDE files, which revealed that the number of meals was exploding each month.

Claims for Empire’s summer program increased from 9,180 meals in May 2020 to 46,000 in August 2021.

Honer was particularly concerned about a site at Tot Park in Circle Pines, a suburb north of the Twin Cities, because it wasn’t even open — it was under construction.

The nonprofit Mind Foundry Learning Foundation began claiming that 500 snacks and dinners had been distributed in January 2021, and three months later that number had increased to 2,500. The nonprofit then reported the exact same number of meals served from April through June.

“That is not realistic because children get sick, people go on vacation and parents cannot go to dinner,” says Honer.

Nonprofit organization ThinkTechAct Foundation – sponsored by Feeding Our Future – began making claims that it served 62,000 meals in January 2021 and that number increased to 101,780 meals in August 2021.

Honer said she continued to raise her concerns with MDE leadership and the USDA signed “notices of serious deficiencies” to Partners in Nutrition and Feeding Our Future in March 2021. Honer also contacted the Federal Bureau of Investigation because she had not heard from the USDA. The Office of the Inspector General and the MDE had no investigative authority.

MDE has issued “stop pays,” which means the sponsor can continue to submit claims but will not be paid until providing documentation of invoices, menus, meal quantities and attendance. In April 2021, Feeding Our Future was granted a temporary restraining order halting stop payments, accusing the department of being racist and discriminatory against minorities.

A judge told MDE it did not have the authority to issue the stop payment order in that manner. Claims continued to rise.

Frederick Goetz, attorney for Mukhtar Mohamed Shariff, asked Honer why MDE didn’t go to sites, and Honer said that was the sponsor’s job. On-site monitoring was paused by the USDA during the pandemic, and MDE was able to conduct “desk audits” instead. Honer said she had not done a desk check on the sites she was concerned about.

Goetz said Honer told federal agents and prosecutors in March 2022 that senior MDE management was concerned about the Feeding Our Future lawsuit and told her to stop investigating issues — although Honer testified Tuesday that she did not could remember telling them that.

He suggested that Honer could not identify with the food insecurity faced by people who lost their jobs as taxi drivers, Uber drivers, housekeepers and restaurant workers.

Honer agreed that the Feeding Our Future lawsuit was “very nasty” and accused MDE staff of being racist.

“I was frustrated, but I was also convinced that I wasn’t (racist),” she said.

Her testimony continues Wednesday.