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Minneapolis Man Pleads Guilty to Money Laundering in $250M “Feeding Our Future” Fraud Scheme

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Feeding the Future and money laundering were at the heart of a 39-year-old Minneapolis man who pleaded guilty to charges of wire fraud and money laundering in connection with the $250 million fraud scheme that exploited a federally funded child nutrition program during the COVID-19 pandemic. This marks the forty-fifth conviction in the extensive investigation that has uncovered widespread corruption within the program, impacting both local communities and federal resources. Abdihakim Ali Ahmed’s role in the scheme involved significant money laundering activities, through which millions of dollars were misappropriated for personal gain. The scale and complexity of the fraud have drawn widespread attention from both law enforcement and policymakers, highlighting the vulnerability of public resources during times of crisis.

The Feeding Our Future fraud scheme began as a well-orchestrated operation designed to exploit the Federal Child Nutrition Program, which was created to provide meals to children in need during the COVID-19 pandemic. With millions of children unable to attend school in person, the federal government ramped up funding for child nutrition programs, which were meant to ensure that children continued to receive adequate nutrition. However, Abdihakim Ali Ahmed, along with his co-conspirators, exploited this initiative for personal financial gain. They fabricated documentation, falsified meal counts, and misappropriated government funds intended for the benefit of children.

The core of the fraudulent scheme involved false claims about the number of children receiving meals at various feeding sites. To facilitate these claims, Ahmed and his associates falsified attendance rosters for their purported “after-school programs,” which were supposed to serve meals to children. In one case, Ahmed registered a business called ASA Limited LLC with the Minnesota Secretary of State in September 2020. Four days later, he applied for the Federal Child Nutrition Program to operate a feeding site at the Gurey Deli, a small market in a St. Paul strip mall. The fraudulent operation was registered under the sponsorship of Feeding Our Future, a nonprofit organization, but instead of helping children, it served as a vehicle for massive fraud and money laundering.

The Shell Game: Money Laundering in Action

The key component of Ahmed’s fraudulent activities was his use of money laundering techniques to conceal the origins of the stolen funds. Rather than using the misappropriated money for its intended purpose of feeding children, Ahmed and his co-conspirators created a complex web of shell companies to launder the funds and make them appear legitimate. These companies acted as intermediaries through which stolen funds were funneled, obscuring the trail of financial transactions that originated from fraudulent claims made to the Federal Child Nutrition Program.

One of the first steps in Ahmed’s money laundering process involved the creation of 1130 Holdings Inc., a shell company that he used to transfer fraud proceeds. Through this entity, Ahmed moved large sums of money that were fraudulently obtained from the Feeding Our Future program. Another company, Five A’s Projects LLC, was also set up for similar purposes, with Ahmed transferring more than $1 million in funds from the Federal Child Nutrition Program into this entity. The use of these shell companies allowed Ahmed to disguise the stolen funds as legitimate business transactions and evade detection by law enforcement authorities.

In total, Ahmed and his co-conspirators were able to siphon millions of dollars from the program. The laundered funds were used for various personal expenses, including the purchase of real estate and luxury items. One notable acquisition was the purchase of a former bar and restaurant in Brooklyn Park, Minnesota, using proceeds from the fraud. In addition, Ahmed bought a 2022 Mini Cooper vehicle with the illicit funds, which was later seized and will be forfeited as part of the restitution process.

The Fake Rosters and Other Fraudulent Activities

To further perpetrate the fraud, Ahmed and his co-conspirators submitted fake attendance rosters that purported to identify the names and ages of children who supposedly attended the feeding site. These rosters were fabricated, with randomly inserted numbers to make the lists appear legitimate. In some cases, the lists included the names and ages of children who did not exist. The fraudulent rosters were submitted to Feeding Our Future, allowing Ahmed to claim funds for meals that were never served.

The process of creating these fake documents was a key part of the scheme. According to court documents, the rosters were organized with the help of spreadsheets, which included a formula that inserted random ages for each “child.” In this way, Ahmed and his associates were able to inflate the number of children being served, thereby inflating their claims for federal funds. The fraudulent claims were submitted for meals that were never actually prepared or distributed.

In total, Ahmed and his co-conspirators claimed to have served over 1.6 million meals between September 2020 and September 2021. These false claims allowed them to siphon off millions of dollars from the Federal Child Nutrition Program. The fraud was carried out over an extended period, from September 2020 to January 2022, during which Ahmed made repeated false claims to Feeding Our Future to continue receiving funds.

Bribes and Kickbacks: A Corrupt Relationship

As part of the money laundering operation, Ahmed also engaged in bribery and kickback schemes. He paid more than $49,000 to Abdikerm Eidleh, a Feeding Our Future employee, in exchange for facilitating the fraudulent approval of ASA Limited’s participation in the Federal Child Nutrition Program. This corrupt relationship between Ahmed and Eidleh played a critical role in the success of the fraud scheme, as it allowed ASA Limited to bypass oversight and gain access to federal funds.

In return for facilitating the fraudulent claims, Feeding Our Future received nearly $400,000 in administrative fees. This arrangement further illustrates the systemic nature of the fraud and the complicity of multiple individuals and organizations involved. The use of bribes and kickbacks enabled Ahmed to continue his fraudulent activities with relative impunity, highlighting the challenges that authorities face in preventing such schemes from occurring in the first place.

Investigating and Prosecuting the Fraud Scheme

The Feeding Our Future fraud scheme was uncovered through a coordinated investigation involving several federal agencies, including the FBI, IRS Criminal Investigation, and the U.S. Postal Inspection Service. These agencies worked together to trace the flow of funds, identify the individuals involved, and ultimately bring those responsible to justice.

The investigation was complex, as the criminals involved had taken significant steps to conceal their activities. The use of shell companies, fraudulent documents, and bribes made it difficult for investigators to initially detect the scheme. However, through diligent work and collaboration, the authorities were able to piece together the full extent of the fraud.

Abdihakim Ali Ahmed’s guilty plea represents a significant victory for law enforcement in the battle against fraud and money laundering. While he faces sentencing in U.S. District Court, the investigation is far from over. The authorities continue to pursue other individuals involved in the scheme, and additional convictions are expected.

Conclusion: The Ongoing Fight Against Money Laundering and Fraud

The Feeding Our Future fraud case serves as a stark reminder of the dangers posed by money laundering and fraud within government programs. The $250 million scheme exploited vulnerable children and abused the trust placed in public resources. It also underscores the importance of continued vigilance and effective enforcement of anti-money laundering measures to protect public funds.

Ahmed’s use of shell companies, fake rosters, and bribes allowed him and his co-conspirators to launder millions of dollars, depriving children of vital meals and resources. The legal consequences faced by Ahmed highlight the severity of his actions and send a clear message that individuals engaged in money laundering and fraud will face serious legal repercussions.

As the investigation continues, it is expected that more individuals will be held accountable for their role in the scheme. The case also raises important questions about how such fraud can be prevented in the future, particularly when government programs are expanded in response to crises like the COVID-19 pandemic. Only by strengthening safeguards, improving oversight, and promoting transparency can we protect valuable resources intended to help those in need.