Home Future payments Dispute between Feeding Our Future and Minneapolis cafe owner alleges kickback scheme and inflated numbers

Dispute between Feeding Our Future and Minneapolis cafe owner alleges kickback scheme and inflated numbers

0

Tears welled up in Hanna Marekegn’s eyes last winter when she said her catering business collapsed financially because she refused to give Feeding a $150,000 bribe Our Future, the nonprofit it says demanded the money in exchange for facilitating federal reimbursements to feed needy children.

“I was fired because I was asked to give a bribe and I refused to give the bribe,” Marekegn said in a February interview with the Star Tribune, adding that she could not document it as it was a verbal request.

Marekegn, owner of the Brava Cafe in Minneapolis, said a Feeding Our Future employee asked him for the bribe to “do like everyone else.” When she refused, St. Anthony nonprofit leader Aimee Bock accused her of fraud and overcharging and stopped working with her, she said.

On Tuesday, federal prosecutors announced that Bock and Marekegn were charged with crimes — two defendants among 48 people charged so far in what officials say is a massive scheme to defraud the government of more than $250 million, the most major pandemic-related fraud in the country and one of the largest federal fraud cases ever recorded in Minnesota.

The dispute between the two women illustrates a wider web of blame between groups involved in meal programs accused of fraud and at the heart of the FBI investigation. Prosecutors allege the programs were tainted with kickbacks and used false or inflated numbers of poor children fed so they could get federal money to buy luxury cars, homes and trips.

Bock, accused by investigators of overseeing the fraudulent scheme, is charged with conspiracy to commit wire fraud, federal program bribery and other charges. She has pleaded not guilty and has publicly denied any wrongdoing, including after the FBI raided her Rosemount office and home in January.

Marekegn, 40, of Edina has been charged with one count of conspiracy to commit wire fraud. She was one of three people charged under a “criminal information”, which can only be filed with the cooperation of a defendant and signals that a guilty plea is likely. Prosecutors say she gave a $150,000 bribe in exchange for Feeding Our Future sponsoring Brava Cafe in the federal meals program, and allege she submitted fabricated invoices that significantly inflated the number meals, claiming to serve meals to more than 4,000 children a day, seven days a week.

Marekegn and his lawyer declined to comment on Wednesday. In a moving interview in February, she said she was the victim, refusing to give a bribe after working with Feeding Our Future and facing retaliation from Bock as a result.

“I didn’t cooperate with the way she wanted to work,” Marekegn said.

Bock’s attorney told a different story in emails obtained by the Star Tribune. In a letter to Marekegn’s attorney dated Nov. 15, 2021, Bock’s attorney Rhyddid Watkins accused the Brava Cafe and a St. Paul nonprofit he worked with of inflating the number. of meals they claimed to serve, and said Marekegn provided a monthly “contribution” to the St. Paul Association in exchange for a contract with her. Watkins accused the nonprofit and the Brava Cafe of failing to provide proper documentation after claiming to serve 21,000 meals a day.

“Many UN food operations are incapable of this kind of scale,” Watkins wrote, adding that Feeding Our Future would stop paying claims for these meals.

He wrote that because Brava Cafe breached his contract, Marekegn would have to repay $130,000.

Bock and Marekegn filed complaints against each other with the Minnesota Department of Education. The department distributes federal funds to reimburse Minnesota programs for providing snacks and meals to children and adults in need.

Packaged Goods Service Bags

Inside a nondescript warehouse in St. Anthony on a cold February day, Marekegn watched workers grab cups of canned fruits and vegetables from bins and distribute them in grocery bags to distribute to families in need.

Asked how she was able to increase the number of meals so quickly, she pointed to “meal packs” – bundling seven days worth of snacks and dinners such as macaroni and black beans into a single paper bag.

Prior to the pandemic, organizations receiving federal funds under the programs had to serve hot meals prepared on site. When the pandemic hit, the federal government approved waivers allowing offsite distribution of meals.

Marekegn said earlier this year that she was preparing to switch to providing hot meals on site and attended a conference in March to learn more about the programs.

Because Feeding Our Future cut off payments to her, Marekegn said she owed $6 million. She said she signed a five-year lease for a warehouse, which contained shelves of food when a reporter visited it in February. Marekegn said she couldn’t be paid for this food.

In court documents on Monday, investigators say Marekegn received more than $5 million in federal funds. If found guilty, it will have to confiscate the assets derived from the proceeds. Public records show she co-owns a nearly $1.3 million home in Medina purchased in May 2021.

Marekegn, who emigrated from Ethiopia as a child, started a food truck in 2010, serving Ethiopian dishes before expanding to serve a mix of Asian, African and American street food at farmers markets and at the exterior of downtown Minneapolis office buildings.

When the pandemic hit, downtown office workers disappeared. Marekegn said he heard about other vendors landing contracts through Feeding Our Future and signed with the nonprofit in fall 2020.

In addition to the St. Paul nonprofit, Marekegn has also partnered with Shamsia Hopes, a Brooklyn Center nonprofit created by Mekfira Hussein, to provide meals for children. Hussein had also contracted with Feeding Our Future and was looking to provide 2,000 hot meals a day.

This week, after Bock and Marekegn were indicted, Hussein became the 48th person charged in the fraudulent scheme. Prosecutors decided to detain her, citing a one-way flight she had booked to Ethiopia for Tuesday. She is accused in court papers of using most of the $6.8 million she received in 2020 and 2021 for personal purposes, including a new Porsche and Tesla, and of donating $80,000. $ in bribes to an employee of Feeding Our Future.

Asked by the Star Tribune in February if anyone from Feeding Our Future had ever offered or asked for a bribe, Hussein said no.

“No one ever,” she said, adding that she had 14 sites where families received food. “I hope all of these things are misunderstandings. I just want to wake up. It’s a nightmare…it doesn’t make sense.”