A jury on Friday convicted five Minnesota residents in a pandemic food fraud scheme involving the exploitation of meal programs for low-income children in the state after someone attempted to bribe a juror with a bag of $120,000 in cash.
Abdiaziz Shafii Farah, Mohamed Jama Ismail, Abdimajid Mohamed Nur, Mukhtar Mohamed Shariff and Hayat Mohamed Nur were found guilty on most counts, which included conspiracy, wire fraud, money laundering, and federal programs bribery, the Associated Press reported. Said Shafii Farah and Abdiwahab Maalim Aftin were acquitted. They had all originally pleaded not guilty.
Prosecutors initially alleged that the seven collectively stole over $40 million in a conspiracy that cost taxpayers $250 million, AP said. Federal authorities said they only recovered about $50 million. They accused the defendants of spending a majority of the money collected by the charities on luxury cars, jewelry, travel and property.
Both the juror who allegedly received the huge bribe and the juror who was informed of the bribe were dismissed before deliberations started. The FBI is investigating the bribe.
An FBI agent’s affidavit said that a woman rang the doorbell at the home of “Juror #52” in the Minneapolis town of Spring Lake Park the night before the jury reviewed the case. The woman handed a relative of the juror a decorated gift bag as a “present” for the juror. The bag was allegedly filled with stacks of stacks of $100, $50 and $20 bills totaling around $120,000.
“The woman told the relative to tell Juror #52 to say not guilty tomorrow and there would be more of that present tomorrow,” the agent wrote. “After the woman left, the relative looked in the gift bag and saw it contained a substantial amount of cash.”
The woman reported the incident to the police.
Nonprofits Feeding Our Future and Partners in Nutrition had proceeds explode during the pandemic, allowing them to disburse around $200 million each in 2021. Provided by the U.S. Department of Agriculture, the food aid was supposed to enable the charities to serve meals to disadvantaged kids amid the Covid economic downturn. Prosecutors alleged that the organizations created invoices for meals that were never delivered to needy recipients, operated shell companies, and laundered money. Many of the food bank locations were actually parking lots, abandoned commercial spaces, apartment complexes, or parks, according to prosecutors.
In total, 70 defendants will be going to trial in the Minnesota scam, one of the most expansive in the country according to prosecutors.
“The defendants’ fraud, like an aggressive cancer, spread and grew,” prosecutors wrote in a summary of their case. “By the time the defendants’ scheme was exposed in early 2022, they collectively claimed to have served over 18 million meals from 50 unique locations for which they fraudulently sought reimbursement of $49 million from the Federal Child Nutrition Program.”
The pandemic-era was plagued with public funding fraud, also including small business loans and unemployment payments. Last June, the Small Business Administration’s (SBA) internal watchdog found that over $200 billion of the business loans the agency distributed during Covid went to fraudsters, equivalent to 17 percent of all loans disbursed. The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) — the two programs the SBA instituted to help businesses survive cash crunches during the crisis —suffered significant fraud.
In March 2022, Department of Labor inspector general Larry Turner testified that the federal government may have paid at least $163 billion in fake unemployment claims, either due to errors or fraud. The department at that point had recovered only about $4 billion of that, about 2.4 percent.
Republican senator Rob Portman described the shocking figure as “one of the largest frauds committed against the American people in our history.”