MINNEAPOLIS — Three of the 49 people charged in an alleged quarter-billion-dollar scheme to defraud government meal programs pleaded guilty Thursday.
Bekam Addissu Merdassa, 40; Hanna Marekegn, 40; and Hadith Yusuf Ahmed, 33, entered pleas at the federal courthouse in Minneapolis, in the case linked to the nonprofit Feeding Our Future. The three were charged with wire fraud.
Prosecutors charged them by criminal information, rather than through a grand jury indictment, so the guilty pleas were expected.
Most of the other defendants charged in the Feeding Our Future case have pleaded not guilty.
Authorities say the Twin Cities-based nonprofit stood at the center of a network of shell companies controlled by people who used federal child nutrition money to buy cars, luxury goods, jewelry and property in the United States, Kenya and Turkey.
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According to Thursday's plea agreements and other court documents, Merdassa and two co-conspirators used a shell company, Youth Inventors Lab, and S&S Catering to steal $3 million. They fraudulently claimed to have served 1.3 million meals, but never received or served any. Co-conspirators Abdul Abubakar Ali and Yusuf Bashir Ali have been indicted.
Merdassa admitted taking 10% of the stolen money for himself and will be required to pay $343,086 as part of his plea agreement.
The government did not make a sentencing recommendation, but guidelines call for 2 to 2½ years in prison, along with $10,000 to $95,000 in fines.
According to court documents, Marekegn must repay $5.2 million she stole through her Brava Cafe business. Sentencing guidelines call for three to four years in prison.
In court, Marekegn admitted paying more than $150,000 in kickbacks to a Feeding Our Future employee in exchange for the group’s sponsorship of the cafe. When she refused to pay more, Marekegn said Feeding Our Future refused to submit additional fake reimbursement claims and cut her off.
Marekegn said she and her company took $7.1 million altogether in federal child nutrition program funds and claimed to have served 2 million meals to kids between September 2020 and last fall. In court Thursday, she said she served some meals, but was unsure of how many.
Ahmed, a Feeding Our Future employee, admitted taking more than $1 million in bribes and kickbacks, and another $1.1 million in federal meal funds by submitting fake reimbursements.
Andrew Luger, the U.S. attorney for Minnesota, has described the overall fraud case as a “brazen scheme of staggering proportions” that faked some 125 million meals at sites across Minnesota.
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