The curious case of the foodless food charity
It turns out that giving away free food to poor hungry children was an extremely lucrative enterprise in 2021. I’ve mentioned before how hundreds of nonprofits sprung up overnight (or…
Three defendants in the case ran a Burnsville charter school.
In the last post, we dug into the tax returns filed by the biggest nonprofits involved in the free-food scandal. Here, we look at the returns filed by some other nonprofit entities linked to the case. What they lack in size, these nonprofits make up for in fascinating details.
One of the major indictments in the Feeding Our Future case centers on a now-defunct Shakopee restaurant, Empire Cuisine and Market. The Empire indictment names eight defendants in the network, including three who were involved in the operation of a Burnsville charter school.
Gateway was founded in 2018 as a K-6 public charter school by Farah and he served as its executive director until February 2022, after he was named in FBI search warrants in the case. Farah was arrested in May 2022, reportedly as he tried to flee the country.
The 2019 IRS Form 990 tax return filed by Gateway covers its first school year of operation. The return lists Farah as executive director, paid a modest $46,000 for his efforts that year. As a newly-founded entity, it ran a deficit that first year.
The return filed for the 2019-2020 school year shows improving finances, with the organization producing a modest surplus. Farah was able to up his compensation to over $100,000.
Joining Farah on Gateway’s board that year was Mahad Ibrahim, Defendant No. 16 in the Feeding case.
Before the end of that school year, as did many public schools, Gateway joined the Summer Food Service Program (SFSP) as a distribution site. Gateway served as its own sponsor for the free-food program, cutting out any middleman. Gateway’s operation appears to be completely unrelated to Empire or to any of the free-food charities later shut down by the state Dept. of Education (MDE).
Beginning in March 2020, as the pandemic got underway, Gateway had a capacity to serve up to 200 children per day, enough to cover the school’s enrollment.
The school’s primary food vendor, based in Columbia Heights, appears as the school’s second-largest private vendor that year, with payments of about $127,000.
The tax return for the 2020-21 school year shows further financial improvement. Gateway’s enrollment had grown to 215 students in K-6 (p. 6). The school boasted revenue of over $4.1 million that year, which works out to a per-pupil amount of $19,223. Farah was able to bump up his pay to $107,000.
Over the previous summer, Gateway switched their SFSP food vendor to one based in south Minneapolis. The new vendor was paid about $247,000 for the full school year.
Gateway’s third-largest private vendor that year is listed as Mind Foundry Learning of Edina, which was paid $108,000 for “after school tutoring.”
Mind Foundry is a registered trade name of the ThinkTechAct Foundation, run by then Gateway-board-member Ibrahim. In early 2023, state Attorney General Keith Ellison successfully sued ThinkTechAct to dissolve the nonprofit. Under court order, the Foundation ceased to exist as a corporate entity in May 2023.
(There is no record of ThinkTechAct filing a tax return since 2016.)
Gateway’s tax return does not appear to disclose any conflict of interest between the board member and a six-figure contract with the public school.
Gateway’s 2021-22 tax return shows that Ibrahim no longer served on the board, and Farah is shown as a “former executive director” with a salary of $108,000. However, the new board chair is named as Mukhtar Shariff, a name that matches Defendant No. 21 in the Feeding case. Shariff does not appear on the board’s roster beginning with the 2022-23 school year.
(Please note that all three defendants have pled not guilty in the case. Their trial is scheduled to begin in 2024).
Gateway’s FY21-22 revenue increased to more than $4.5 million, now serving only 205 students, spread through K-7. That works out to revenue per pupil of $22,139 for the public school.
For this school year, Gateway brought their SFSP food service operation in house. At the same time, Gateway added a new free-food offering, one open to the public and said to be capable of serving up to 650 children per day.
Food now appears to be a money maker for the organization, as Gateway records food sales of $428,000 against food expense of $375,000.
For FY 22-23, Gateway continued both SFSP food service offerings (for students and the public), scaled back to reflect the end of the pandemic. The school appears to have dropped from the program for the current year.
A reminder: no one currently associated with Gateway STEM Academy has been accused of any wrongdoing. Fortunately, Gateway continues to operate.
I’ve mentioned on several occasions that there were hundreds of free-food charities that were created and vanished without ever filing a tax return. However, there were exceptions.
Liban Alishire (Defendant No. 36, Guilty Plea No. 6) is the lead defendant in the JigJiga group. Alishire founded the nonprofit Community Enhancement Services in 2016. Community Enhancement is one of 23 food-fraud-related nonprofits that Keith Ellison currently is suing to shut down.
Community Enhancement filed tax returns for 2018 and 2019, showing revenue below $50,000 each year. Its next, and final, tax return was for fiscal year 2021 (ending June 30), where the nonprofit suddenly showed revenue above $1 million, a substantial increase over the previous year’s revenue of $500. In 2021, the nonprofit indicates they earned a net margin of almost $400,000 giving away free food, serving 21,450 recipients.
The 2021 return lists Alishire as the President, and his business partner Ahmed Ali (Defendant No. 37) as the nonprofit’s Secretary. A footnote to the return indicates that the nonprofit’s Treasurer is Alishire’s sister (who is not implicated in the case).
Shamsia Hopes is a nonprofit founded in 2015 by Defendant No. 48 in the Feeding case, Mekfira Hussein.
To date, the nonprofit has filed only one tax return, for 2020. Shamsia was able to utilize the EZ form, as it reported revenue that year of only $128,000. However, its expenses totaled nearly $425,000, with the deficit being covered by Hussein herself. The loan was later repaid in full.
We’ll keep digging.
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