Empire Cuisine, the Shakopee restaurant at the center of the ongoing Feeding Our Future trial, has racked up $25 million in federal food costs in a year and a half, according to an FBI forensic accountant who testified Tuesday. He said he received only $3 million in food expenses.
Pauline Rose, a forensic accountant who examined bank records related to the case, described Empire Cuisine as a small storefront in a Shakopee strip mall and testified that the dollar figure was suspicious.
“This is significantly less than it should be,” Rose testified. “I would like to see more of that go to food.”
Her testimony came during the fifth week of a joint trial of seven defendants accused of falsely reporting the number of meals they provided to underprivileged children in order to receive compensation through the federal child nutrition program. . They are accused of stealing $40 million and face a total of 41 criminal charges, including money laundering, fraud and bribery.
The trial is part of a larger federal investigation into alleged fraud estimated at $250 million. Overall, 70 people were charged in the case, 18 of whom pleaded guilty.
Lawyers for the seven defendants in the trial argued there was nothing illegal about their clients benefiting from federal food programs during the pandemic. Dozens of exemptions from pandemic food program regulations, paving the way for customers to respond to child hunger at a time when most businesses were closed and the world was filled with uncertainty. they claim.
“The government has decided to harness the power of America’s free enterprise system to meet these needs,” said Andrew Birrell, representing Empire Cuisine co-owner and defendant Abdiaziz Farah. the attorney said in his opening statement last month.
Roth said he began investigating possible child nutrition fraud soon after the Minnesota Department of Education (MDE) tipped off the FBI in April 2021. MDE officials encouraged the FBI to investigate meal claims from two sponsored nonprofits, Feeding Our Future and Partners in Quality Care, as hundreds of food sites seek federal funds to feed underserved children during the COVID-19 pandemic.
Rose testified that both sponsoring organizations each disbursed more than $100 million in federal child food assistance funds during 2021. After reviewing 3,000 bank accounts, she said she found more than 700 food sites that claimed food funds from the federal government. She said 50 of those sites were associated with seven defendants in the trial.
Soon after starting her investigation, Rose discovered that $12 million had already been paid to the Safari Restaurant in Minneapolis in one year, which was a red flag to her.
“It was definitely very worrying. In fact, it was very alarming,” Loos testified. “Due to the coronavirus pandemic, the restaurant’s funding stopped and everything was gone.” [federal] There are millions of dollars coming in for food.”
The defendants in the Safari-related “Feeding Our Future” lawsuit are not currently being tried in court and are expected to go to trial later this year. But Roos said her investigation had identified 12 restaurants linked to the alleged fraud, including Empire Cuisine and Market, run by Abdiaziz and another defendant in the case, Mohamed Ismail. Stated.
Empire Cuisine enrolled in the food program in April 2020, the same month Abdiaziz and Mohamed registered the restaurant as a business with the state. Rose said the timing was questionable.
Empire Cuisine was registered as a food site through Partners in Quality Care for several months.
By fall of that year, MDE ordered for-profit restaurants to withdraw from the food program. Although Empire Cuisine ended its role as a food site, its role in federal food programs rapidly expanded.
The company is providing services to approximately 24 food outlets run by the ThinkTech Act Foundation, a nonprofit organization led by Mahad Ibrahim, another defendant who is not participating in the case. carried out activities.
Though ThinkTechAct existed before the pandemic, it was relatively financially dormant until it launched its food site in February 2021, Rose testified. That month, Partners in Quality Care began depositing hundreds of thousands of dollars into ThinkTechAct’s bank account. Rose said he found the move suspicious because there had been no deposits or expenditures into the bank account for two years.
“I think there will be some spending out of this account,” she said.
In his overall investigation, Mr. Rose found a pattern in which child nutrition funds flowed to food sites and food vendors, and from there to limited liability companies set up by the same individuals associated with the food sites and food vendors. He said that he was Rose said she found this pattern questionable, especially since many of the limited liability companies were formed just before receiving their first federal food payments.
“It was to hide the fact that they weren’t actually buying the food,” Rose said of the limited liability companies. “It appears that they were hiding the transfer. If they really wanted to, they could have transferred the money to their own account, but they didn’t. They went to the trouble of creating a new entity, opening a new bank account and transferring the money there.”
Much of the money, which was examined in the overall investigation, was instead used for personal purchases such as luxury vehicles and real estate, Rose said.
Rose said some of the funds scrutinized in court went toward food, but that food still didn’t necessarily go toward free meals for children. For example, Empire Cuisine spent $3.1 million on food from April 2020 to February 2022. However, this also includes purchasing items such as tea, coffee, and halal meat that match Empire Cuisine’s menu. The restaurant had about $1 million in credit card revenue from food and merchandise sales during the same period, Roos testified.
The $3.1 million does not include large checks that ThinkTechAct paid to Empire Cuisine and Empire Enterprises, another organization Abdiaizz founded, the memo states.[Child and Adult Care Food Program] food. ” Mr. Rose spent time Tuesday presenting a paper review of how the money from such checks is deposited into bank accounts and then used for other purchases. In one case. In , funds from a similarly labeled check were deposited and wired to Kenya for Abdi Aziz’s $725,000 investment in five four-bedroom apartments to be built in Nairobi. It was shown that
“Was that money used to buy food?” Assistant U.S. Attorney Joe Thompson asked.
“It wasn’t,” Rose said.
“What was it used for?” Thompson asked.
“It’s to buy real estate in Kenya,” Roos said.
Trial testimony resumes Wednesday at 9 a.m.
