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Minnesota nonprofit under federal investigation for alleged misuse of funds meant to feed children

FBI search warrants claim tens of millions of dollars were instead used to buy cars, real estate and luxury items.

MINNEAPOLIS — The FBI is investigating a Minnesota-based nonprofit organization for alleged misuse of millions of dollars in government funds intended for programs to feed children.

Unsealed FBI search warrants claim Feeding Our Future received "tens of millions of dollars" in federal funding to open community sites across the Twin Cities that provide meals to underprivileged children and adults. The FBI documents allege "almost none of this money was used to feed children." Investigators claim the money was instead funneled through other entities, and used to buy cars, real estate and other luxury items.

On its website, Feeding Our Future says it "utilizes the Child and Adult Care Food Program to increase healthy food access for Minnesota's youth and seniors."

"We are driven by a single goal; making participation in the USDA Child and Adult Care Food Program safe and easy for our community partners," Feeding Our Future writes on its website. "We ensure programs are easily able to receive funding to purchase nutritious meals and snacks."

The FBI warrant cites records from the Minnesota Department of Education, which distributes reimburses organizations locally with the federal dollars, showing that Feeding Our Future greatly increased its funding during the COVID-19 pandemic, going from $3.4 million received in 2019, to $42 million in 2020, to more than $197 million in 2021.

In a statement, MDE officials said the department grew concerned with the "rapid growth in the number of community sites sponsored by Feeding Our Future" and the rate of meal reimbursement claims by the company in the summer of 2020. MDE claims Feeding Our Future could not provide "sufficient information and supporting documentation," leading MDE to report the "unexplained growth" to USDA officials in charge of the program.

MDE later denied Feeding Our Future's applications for additional community sites, declared the organization "deficient" in its financial audits, and stopped payments. However, Feeding Our Future filed suit against MDE in November 2020, and a judge later ruled that MDE did not have the authority to stop payments at that time.

Former FBI agent and attorney Jeff Van Nets said as a general rule fraud cases involve intensive mining of banking and financial documents.

"Many times those are document intensive, so there’s a review of documents to kind of follow the money, so to speak," Van Nest told KARE.

"A lot of times those money flows will sort of speak for themselves."

In this case the FBI was aided by IRS, BCA, US Postal Inspection Service and US Marshal's office. A total 200 officers were involved in raids on at least a dozen homes, offices and businesses.

Van Nest, who now works for the Center for the American Experiment, said it's not surprising to see multiple law enforcement agencies working in unison.

"The Minneapolis and Minnesota law enforcement community is very, very tightknit, and we certainly view our law enforcement responsibilities as a team sport and a team effort."

The warrants show FBI investigators were monitoring numerous homes, businesses and offices across the Twin Cities metro area that are potentially connected to the alleged fraud. FBI agents executed search warrants on Thursday at the Feeding Our Future offices in St. Anthony.

No charges have been filed in connection with the investigation thus far.

Feeding Our Future has not commented publicly on the allegations made by the FBI.

As a result of the FBI investigation, MDE said it is again moving to stop payments to Feeding Our Future and to terminate agreements under the federal program. 

MDE officials said the investigation into Feeding Our Future does not have any impact on free and reduced-price meals received by students during the school day, and the agency works with other community organizations through the federal program to get food to families in need.

Minnesota Senate Education Committee chair Sen. Roger Chamberlain (R-Lino Lakes) is calling for a wider audit of COVID federal funding as a result of this investigation.

"This money is supposed to help people, help kids, help small businesses," Chamberlain said in a statement. "I appreciate the Department of Education's diligence in reviewing these funds to catch this fraud. I'm sure other agencies and departments could use support for oversight, so I am calling for an audit of all COVID-related funds and spending to hold accountable bad actors. We must ensure these dollars are going to those who need the help."

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