First guilty pleas entered in Feeding Our Future investigation; 3 admit to fraud, including EP man

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Three defendants, including an Eden Prairie man, pleaded guilty Thursday in a massive food-aid fraud investigation, admitting that they inflated or completely lied about the number of meals they served needy children in order to receive federal money.

Hadith Yusuf Ahmed, 33, of Eden Prairie, Bekam Addissu Merdassa, 40, of Inver Grove Heights, and Hanna Marekegn, 40, of Medina, pleaded guilty in federal court to one count each of wire fraud. The three, like most defendants in the case, are not in custody and will return to court at a future date to be sentenced. They face prison terms ranging from about two years to nearly five years; the maximum penalty for wire fraud is five years in prison and three years of supervised release.

They are the first defendants to plead guilty in the case.

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A total of 49 defendants were charged in September with embezzling $250 million from federal food-aid programs that distribute money to local organizations to feed underprivileged children. Federal prosecutors said the case is the single biggest fraud committed against the government during the COVID-19 pandemic, and have hinted that more charges are possible.

Minnesota U.S. Attorney Andrew Luger and several defense attorneys for other suspects who were not scheduled to appear Thursday attended Merdassa’s hearing. Many of the same defense attorneys also attended Marekegn’s hearing.

Ahmed, Merdassa, and Marekegn were charged on Sept. 20 with wire fraud via “an information” charging document, which occurs when defendants are expected to plead guilty. They worked with or under Feeding Our Future, a sponsor organization that received federal food-aid funds through the state and then distributed that money to smaller organizations that were supposed to feed underprivileged children.

The money came from two federal programs used to feed children and adults in daycare and afterschool programs: the Child and Adult Care Program and the Summer Food Service Program. The alleged fraud was simple at its foundation: Some organizations along the money chain reported serving more meals than they actually did in order to receive more federal reimbursement dollars.

‘My client’s life is now being threatened’

Ahmed answered questions affirmatively from a prosecutor and U.S. District Judge Nancy Brasel. Hadith worked for Feeding Our Future monitoring and supporting food sites enrolled in federal food-aid programs under Feeding Our Future’s sponsorship. He admitted to receiving more than $1 million in kickbacks from those food sites in exchange for enrolling them into federal food-aid programs. 

Ahmed also admitted to starting a shell company called Southwest Metro Youth that received $1.1 million in food-aid money by claiming to feed 2,000 children a day. When Brasel asked Hadith how many children Southwest Metro Youth in Eden Prairie actually fed, Ahmed said he wasn’t sure.

“I don’t have the exact number of kids we served, but there was nowhere close to 2,000,” Ahmed said. 

Hadith agreed to a prison term between about four and five years. He also agreed to pay the government more than $1.3 million in restitution.

At one point, prosecutor Joe Thompson asked Ahmed why he decided to plead guilty.

“I want to tell the truth, sir,” Ahmed responded.

Ahmed and his attorney, Richard Dansoh, declined to comment after the hearing. But in an interview Wednesday, Dansoh, a Miami-based attorney, told Sahan Journal that Ahmed has faced threats.

Dansoh emphasized that he wants to clear up rumors that Ahmed gave inside information to the FBI to help their investigation. Rather, federal investigators confronted Ahmed with evidence, and Ahmed decided to plead, Dansoh said.

“It’s not like he left the organization and he went to the feds and started complaining about it,” Dansoh said Wednesday. “We are on the receiving end just like everybody else.”

The rumors have been dangerous, Dansoh said.

“Frankly, they are creating a hazardous situation where my client’s life is now being threatened,” he said. “They think he is the origin.”

Ahmed decided to plead because of a paper trail of evidence federal investigators compiled against him, Dansoh said.

“It’s only a fool who thinks you can block the sun by closing his eyes,” Dansoh said. “If you decide to live in a fool’s paradise and close your eyes, that’s fine. But if there’s a paper trail, how are you going to refute it?”

Editor’s Note: This report was condensed from a story originally published on Oct. 12 in the Sahan Journal. It was written by Joey Peters, a reporter for the Sahan Journal.

He has been a journalist for 15 years. Before joining Sahan Journal, he worked for close to a decade in New Mexico, where his reporting prompted the resignation of the Albuquerque Public Schools superintendent and a successful public records lawsuit against the governor. Peters can be reached at jpeters@sahanjournal.com.