MINNEAPOLIS — Three people have pleaded guilty to their roles in the $250 million fraudulent scheme that operated a federally funded infant nutrition program during the COVID-19 pandemic, U.S. Attorney Andrew M. Luger announced.
According to court documents, Bekam Addissu Merdassa, 40, of Inver Grove Heights, Hanna Marekegn, 40, of Medina, and Hadith Yusuf Ahmed, 34, of Eden Prairie, admitted that between 2020 and 2022 they had knowingly and willfully conspired with others to participate in a fraudulent scheme to obtain and misappropriate millions of dollars in federal child nutrition program funds intended to reimburse the cost of serving meals to underprivileged children.
According to his guilty plea, Merdassa used a non-profit entity called Youth Inventors Lab as a front company to carry out his plan. Merdassa and his co-conspirators entered the Youth Inventors Lab into the federal infant nutrition program under the sponsorship of Feeding Our Future. After signing up for the program, Merdassa and his co-conspirators immediately began submitting claims for allegedly serving meals to hundreds or thousands of children a day. In support of these fraudulent allegations, Merdassa and his co-conspirators prepared and submitted false invoices purporting to document the purchase of food from a supplier, S&S Catering. But Youth Inventors Lab never received a meal from S&S Catering to serve on its site. In total, Youth Inventors Lab claimed to have served over 1.3 million meals between December 2020 and June 2021 and fraudulently received $3,029,786 in refunds from Feeding Our Future.
According to his guilty plea, Marekegn entered his business, Brava Cafe, into the federal infant nutrition program under the sponsorship of Feeding Our Future. In her application, Marekegn claimed she would serve meals to up to 4,000 children a day at her restaurant in Minneapolis. In reality, Marekegn had neither the capacity to prepare and serve so many meals each day nor the number of children to feed. Marekegn presented fraudulently inflated invoices for reimbursement in which she claimed to serve meals to thousands of children a day. In support of these fraudulent claims, the defendant prepared and submitted false documentation, including falsely inflated meal numbers. Marekegn also participated in the federal infant nutrition program as a supplier and paid bribes to a Feeding Our Future employee in return for the nonprofit organization sponsoring her business. In total, the company claimed to have served more than 2 million meals to children between September 2020 and fall 2021 and secured approximately $7.1 million in federal child nutrition program funds.
According to his guilty plea, Ahmed was an employee of Feeding Our Future and was responsible for monitoring and supporting sponsor sites. Ahmed solicited and accepted bribes from several sites under the sponsorship of Feeding Our Future. Ahmed created and used a front company, Mizal Consulting LLC, to receive and conceal bribe payments, which were often disguised as “consulting fees”. In total, Ahmed has solicited and received over $1 million in kickbacks and bribes from individuals and companies involved in the program under the sponsorship of Feeding Our Future. Ahmed also created a site under the sponsorship of Feeding Our Future called Southwest Metro Youth. Ahmed and his co-conspirators submitted fraudulent invoices for reimbursement in which they claimed to serve meals to 2,000 children a day at Southwest Metro Youth. In support of these fraudulent allegations, Ahmed and his co-conspirators prepared and submitted false documents, including false meal receipts and fake invoices purporting to document the purchase of food from a vendor. In total, Ahmed’s company, Southwest Metro Youth, has secured more than $1.1 million in federal child nutrition program funds.
The three defendants pleaded guilty today in United States District Court before Judge Nancy E. Brasel to one count each of conspiracy to commit wire fraud. Sentencing hearings will be scheduled at a later date.
These cases are the result of an investigation by the FBI, IRS – Criminal Investigations, the US State Department’s Diplomatic Security Service and the US Postal Inspection Service.
These cases are being prosecuted by Assistant U.S. Attorneys Joseph H. Thompson, Harry M. Jacobs, Chelsea A. Walcker, Matthew S. Ebert, and Joseph S. Teirab. Assistant U.S. Attorney Craig Baune is handling the asset seizure and forfeiture.
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