Major failures at Minnesota Department of Education contributed to nation’s largest Covid fraud scheme, audit finds

Major failures by the Minnesota Department of Education allowed widespread misuse of a federal program intended to feed children during the pandemic, according to a state audit report released Thursday.

The Minnesota Department of Education (MDE) failed to properly oversee Feeding Our Future, the nonprofit at the center of a purported $250 Covid relief package that federal plaintiffs say is the largest of its kind, the Minnesota Legislative Auditor’s Office said in a 103-page report.

The U.S. Attorney’s Office for the District of Minnesota has charged 70 people in connection with the massive fraud scheme involving Feeding Our Future. Eighteen pleaded guilty and five were found guilty last week, officials said.

The Feeding Our Future offices in St. Anthony in January. December 27, 2022, a week after FBI agents raided the Minnesota nonprofit.Shari L. Gross/Star-Tribune via AP

The Department of Education oversees federal programs that reimburse participants who provide free, nutritious meals to low-income children and families.

Feeding Our Future was a participant in the program. But prosecutors said the nonprofit’s employees recruited people and entities to take advantage of the program for personal gain.

Feeding Our Future went from receiving and disbursing about $3.4 million in federal funds in 2019 to nearly $200 million in 2021, prosecutors said.

MDE failed to hold nonprofit accountable for program requirements, failed to respond to warning signs and was “ill-prepared to respond to problems encountered with Feeding Our Future,” audit says .

“We found that MDE’s inadequate oversight of Feeding Our Future created opportunities for fraud,” the auditor’s office said in a statement.

Under federal regulations, the MDE was responsible for reviewing and approving participant applications and conducting monitoring visits and compliance reviews. The audit says MDE’s sole review of Feeding Our Future “resulted in serious findings” that required follow-up, which was never done.

The review, which included visits to four Feeding Our Future sites, took place in 2018, about four months after the nonprofit made its first meal claims. This review found that at least one site failed to collect child registration information, improperly inflated average daily attendance, claimed ineligible dining expenses, and improperly observed or counted expenses. meals and snacks, according to the audit.

MDE did not conduct any in-person follow-up exams due to the pandemic, the audit said.

The report exposes other major shortcomings. It states that the MDE received at least 30 complaints regarding Feeding Our Future between 2018 and 2021, but that it did not investigate certain complaints, “despite their frequency or seriousness”, or that it conducted investigations “inadequate”.

MDE was also required to provide guidance and training to Feeding Our Future employees, and it had the authority to terminate the group’s participation in the program if warranted, according to the audit. The audit said the office “did not always take steps to verify statements made by Feeding Our Future before approving its applications for the program.”

In a written response to the report, Education Commissioner Willie Jett disputed allegations of lax oversight made in the report and placed blame on individual defendants charged in the scheme.

“What happened with Feeding Our Future was a travesty – a coordinated and brazen abuse of nutrition programs that exist to ensure access to healthy meals for low-income children,” Jett said. “The responsibility for this blatant fraud lies with the indicted and convicted fraudsters.”

After the MDE made “extensive findings” about the nonprofit’s shortcomings, Jett said his office repeatedly contacted the U.S. Department of Agriculture’s Midwest Regional Office for assistance. ‘aid, as well as the USDA Office of Inspector General and the FBI. The commissioner said the MDE stopped approving new applications from Feeding Our Future in December 2020.

Jett, who became commissioner in January 2023, said MDE’s oversight of the federal program is “frequently reviewed” and improved. “MDE has been proactively making changes for several years to improve oversight and program integrity,” he said.

MDE faced additional pressure Thursday when it received a letter from a group of members of Congress demanding more information, including emails and text messages between MDE and the FBI.

The audit report comes nearly a week after a jury found five of seven defendants guilty of most of the crimes they faced related to the Covid relief package. The federal fraud trial was the first of many related to the alleged scheme.

The defendants in the first lawsuit collectively received more than $40 million in federal funds between April 2020 and January 2022, according to a criminal complaint. While the defendants claimed to have fed millions of children with the funds, prosecutors said they used most of the money to purchase several homes, properties and luxury vehicles.

Five of them – Abdiaziz Shafii Farah, Mohamed Jama Ismail, Abdimajid Mohamed Nur, Mukhtar Mohamed Shariff and Hayat Nur – were found guilty of various financial crimes last Friday.

The end of the trial was overshadowed by an alleged jury tampering incident.

Cash left at a juror’s home in a June 2 fraud case in Minneapolis.U.S. Attorney’s Office in Minnesota via AP

On the eve of jury deliberations, one juror who was later dismissed said she was offered nearly $120,000 in cash in exchange for her vote to acquit.

It is clear who offered the bribe to the younger man. The U.S. Attorney’s Office declined to comment on the jury tampering investigation, and the FBI said the investigation was ongoing.

The FBI raided a defendant’s Minnesota home last week. On Wednesday, the agency said it had conducted more “court-authorized law enforcement activities” at more than one home in connection with the investigation, but declined to provide more information.

Lawyers for the five convicted people did not respond to requests for comment.

The juror said a woman delivered a gift bag filled with cash and left it with a relative, according to an FBI search warrant affidavit. She said she was not home when the money was delivered.

The names of the jurors have not been made public, but the visitor knew the woman’s first name and told his relative that there would be “more gifts tomorrow” if the juror agreed to vote not guilty, the report said. affidavit.

The FBI said all defendants, their attorneys and prosecutors had access to this juror’s identifying information.

In a detention order, U.S. District Judge Nancy Brasel said it was “likely” that at least one defendant was involved in the bribe attempt.

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