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Dispute between Feeding Our Future and Minneapolis site alleges a system of kickbacks, inflated meals

Tears welled in Hanna Marekegn’s eyes as she said her catering business had crumbled financially because she refused to give a $150,000 kickback to Feeding Our Future, the nonprofit that she said demanded the money in return for facilitating federal reimbursements for feeding needy children.

“I got terminated because I was asked to give a kickback and I refused to give the kickback,” Marekegn said in a February interview with the Star Tribune, adding that she couldn’t document it because it was a verbal request.

Marekegn, who owns Brava Cafe in Minneapolis, said a Feeding Our Future employee asked her for the kickback to “just do like everyone else is doing.” But when she refused, the St. Anthony nonprofit’s leader, Aimee Bock, then accused her of fraud and overbilling and stopped working with her.

On Tuesday, federal prosecutors announced that both Bock and Marekegn were charged with crimes — two defendants among 48 people charged so far in what officials say was a massive scheme to defraud the government of more than $250 million, the largest pandemic-related fraud scheme in the country and one of the largest federal fraud cases ever brought in Minnesota.

The dispute between the two women illustrates a broader tangled web of blame between groups involved with fraud-accused meal programs and the crux of the FBI’s investigation. Prosecutors allege that programs were tainted by bribes and used fake or inflated numbers of poor children fed so they could use federal money to buy luxury cars, homes and trips.

Bock, accused by investigators of overseeing a $240 million fraud scheme, is charged with conspiracy to commit wire fraud, federal programs bribery and other charges. She pleaded not guilty and has publicly denied any wrongdoing, including after the FBI raided her office and her Rosemount home in January.

Marekegn, 40, of Edina was charged with one count of conspiracy to commit wire fraud. She was one of three people charged under a “criminal information,” which can only be filed with a defendant’s cooperation and signals a guilty plea is likely. Prosecutors say she gave a kickback of $150,000 in exchange for Feeding Our Future sponsoring Brava Cafe in the federal meals program, and allege that she submitted fabricated invoices that substantially inflated meal counts, claiming to serve meals to more than 4,000 children a day, seven days a week.

Marekegn and her attorney declined to comment Wednesday. But in an emotional interview in February, she said she was the victim, refusing to give a kickback after working with Feeding Our Future and facing retaliation from Bock as a result.

“I didn’t cooperate with the way she wanted to work,” Marekegn said.

Bock’s attorney gave a different story in e-mails obtained by the Star Tribune. In a letter to Marekegn’s attorney dated Nov. 15, 2021, Bock’s attorney, Rhyddid Watkins, accused Brava Cafe and a St. Paul nonprofit it was working with of inflating the number of meals they claimed to serve, and said Marekegn was providing a monthly “contribution” to the St. Paul nonprofit in exchange for contracting with her. Watkins accused the nonprofit and Brava Cafe of not providing proper documentation after claiming to serve 21,000 meals a day.

“Many United Nations food operations are incapable of that kind of scale,” Watkins wrote, adding that Feeding Our Future would stop paying claims for those meals.

He wrote that because Brava Cafe had breached its contract, Marekegn would have to pay back $130,000.

Both Bock and Marekegn submitted complaints to the Minnesota Department of Education about the other person. The department distributes federal funding to reimburse Minnesota programs for providing snacks and meals to children and adults in need.

Serving bags of packaged goods

Inside a nondescript warehouse in St. Anthony on a cold February day, Marekegn watched as workers grabbed cups of fruit and canned vegetables from tubs and doled them out in grocery bags to be distributed to families in need.

When questioned about how she was able to scale up the number of meals so quickly, she pointed to the “meal packs” — bundling seven days worth of snacks and dinners like macaroni and black beans in one paper bag.

Pre-pandemic, organizations receiving federal money under the programs had to serve prepared, hot meals on-site. But when the pandemic hit, the federal government approved waivers allowing off-site distribution of meals.

Marekegan said earlier this year that she was preparing to switch to providing hot meals on-site and attended a conference in March to learn more about the programs.

Because Feeding Our Future cut off payments to her, Marekegn said she was owed $6 million. She said she signed a five-year lease for a warehouse, which had racks of food when a reporter visited it in February, and Marekegn said she couldn’t get paid for that food.

In court documents filed Monday, investigators say Marekegn received more than $5 million in federal funds. If convicted, she will have to forfeit property derived from the proceeds. Public records show she is co -owner of a nearly $1.3 million house bought in Medina in May 2021.

Marekegn, who emigrated from Ethiopia as a child, launched a food truck in 2010, serving Ethiopian dishes before expanding to serve a mix of Asian, African and American street food at farmers markets and outside downtown Minneapolis office buildings.

But when the pandemic hit, downtown office workers disappeared. Marekegn said she had heard about other vendors landing contracts through Feeding Our Future and signed on with the nonprofit in fall of 2020.

Besides the St. Paul nonprofit, Marekegn also teamed up with Shamsia Hopes, a Brooklyn Center nonprofit started by Mekfira Hussein, to provide meals to kids. Hussein had also contracted with Feeding Our Future and was looking to provide 2,000 hot meals a day.

This week, after Bock and Marekegn were charged, Hussein became the 48th person charged in the fraud scheme. Prosecutors moved to detain her, citing a one-way flight she booked to Ethiopia for Tuesday. She’s accused in court documents of using most of the $6.8 million she received in 2020 and 2021 for personal costs, including a new Porsche and Tesla, and of giving $80,000 in kickbacks to a Feeding Our Future employee.

When asked by the Star Tribune in February if anyone at Feeding Our Future had ever offered her or asked for a kickback, Hussein said no.

“No one once ever,” she said, adding then that she had 14 sites where families were getting food. “I hope all of these things are misunderstandings. I just want to wake up. It’s a nightmare … it doesn’t make sense.”

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