MINNEAPOLIS (WJON News) – Mohamed Ali Hussein and Lul Bashir Ali have pleaded guilty to their roles in the $250 million fraud scheme that exploited a federally-funded child nutrition program during the COVID-19 pandemic.

According to the defendant’s guilty pleas and court documents, 53-year-old Hussein, and 57-year-old Ali both of Faribault, admitted that between June 2020 and January 2022, they knowingly and willfully conspired with others to participate in a fraudulent scheme to obtain and misappropriate millions of dollars in federal child nutrition program funds that were intended as reimbursements for the cost of serving meals to underprivileged children.

In April and September 2020, Ali and Hussein enrolled their companies, Lido Restaurant and Somali American Faribault Education (SAFE), respectively, in the Federal Child Nutrition Program under the sponsorship of Feeding Our Future. After enrolling, Hussein and Ali began submitting fraudulently inflated invoices for reimbursement in which they claimed to be serving meals to thousands of children a day. In support of these fraudulent claims, they prepared and submitted fake paperwork, including falsely inflated meal counts.

Lido Restaurant also participated in the program as a vendor. Lido Restaurant had a contract to prepare meals to be served by Hussein’s SAFE site. Ali and Hussein submitted fraudulent claims that sought reimbursement for far more meals and food than Ali’s company actually prepared. As part of the scheme, Hussein also paid more than $100,000 in kickbacks to Feeding Our Future personnel in exchange for the nonprofit’s sponsorship of Lido Restaurant and SAFE.

In total, Hussein’s company claimed to have served more than 1.2 million meals to children between February and November 2021 and obtained approximately $2.1 million in Federal Child Nutrition Program funds. Ali’s company claimed to have served more than 700,000 meals to children between June 2020 and April 2021 and obtained approximately $2.9 million in Federal Child Nutrition Program funds.

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Hussein and Ali pleaded guilty to one count each of conspiracy to commit wire fraud. They agreed to pay restitution in the amount of $5,037,649 and to forfeit to the United States real property and a vehicle.

Sentencing hearings will be scheduled at a later time.


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