Fraud-plagued nonprofit reaches $18.5 million settlement with state of Minnesota

MINNEAPOLIS — A nonprofit that steered nearly $100 million to fraudsters has agreed to hand over $18.5 million to the state of Minnesota to settle a lawsuit by Minnesota Attorney General Keith Ellison.

Under the settlement agreement, which was filed Thursday in Hennepin County District Court, Partners in Nutrition will dissolve and turn over its remaining money to the Minnesota Department of Education, which paid out the funds as part of a federal meals program for needy children. Ellison said the $18.5 million will be returned to the U.S. Department of Agriculture, which finances the meals program and reimburses states for their related expenses.

Ellison also is recommending that at least one person tied to the nonprofit face criminal prosecution, and Ellison may recommend additional criminal or civil charges against six others who worked for Partners. He declined to identify the individuals but said he’s referred the one individual to state and federal authorities.

“Let me be real clear — we’re not done,” Ellison said in an interview with the Minnesota Star Tribune. “We’re going to get to the bottom of it... Anybody who steals money from the mouth of a child, they’re going to have to answer for that.”

The settlement comes three months after the Star Tribune published a lengthy investigation into Partners in Nutrition, which revealed that the nonprofit’s leaders escaped criminal charges despite allegedly engaging in the same kind of schemes that resulted in a 41-year prison sentence for the leader of Feeding Our Future.

The agreement also comes six weeks before Ellison faces reelection in a race that has been dominated by his handling of fraud oversight. Gov. Walz dropped his reelection bid in January over criticism of his weak response to the crisis. Ellison’s opponent, Ron Schutz, and other Republicans are accusing Ellison of going soft on fraudsters. Ellison has defended his record and repeatedly noted that his office does not have sweeping jurisdiction over criminal matters.

In its 43-page False Claims Act lawsuit against Partners in Nutrition, which also was filed Thursday, the Attorney General’s Office documented dozens of instances in which the nonprofit’s leaders ignored warnings from underlings and intentionally inflated reimbursement claims to maximize their windfall.

Many of those incidents involved Kara Lomen, the co-founder and former chief executive of Partners, who repeatedly turned a blind eye to what the Attorney General called “obvious signs of fraud,” including site visits that found no one receiving meals on days in which the nonprofit billed for thousands of children, according to the lawsuit.

At one site in Minneapolis, Partners was paid $895,241 after claiming it handed out an average of 4,500 meals in December 2020, even though the site was “not yet operating,” according to the lawsuit.

In another case, the lawsuit says, Lomen instructed a co-worker to “falsely back date the forms” to make it appear as though the nonprofit was abiding by meal program rules. When workers submitted low reimbursement claims, Lomen allegedly told them to “fix” the meal counts to get the numbers up.

When a Partners worker notified colleagues that there were “TONS of duplicate children” showing up on roster sheets, another fraud indicator, the nonprofit failed to act. Instead, the lawsuit says, the nonprofit helped a fraudster keep cheating by “transferring” the kids to another site, even though Partners executive Christine Twait thought the move was “sketchy.”

The lawsuit says Partners “knowingly” submitted false claims to the state and engaged in “deliberate ignorance” when confronted with red flags. It says the nonprofit’s conduct was “egregious” because Partners “capitalized on a moment of vulnerability” when program oversight was relaxed during the pandemic.

As previously reported in the Star Tribune, confessed fraudster Haji Salad told the FBI that he paid more than $60,000 in kickbacks to Lomen for giving his food companies preferential treatment, according to a summary of Salad’s interview with federal investigators.

That account was corroborated by former Partners employee Julius Scarver, who told the FBI that Lomen took kickbacks and handed out five-figure bonuses to employees in 2021 to keep them quiet about the scheme, according to an FBI summary of Scarver’s interview.

Lomen’s attorney, Brett Kelley, previously said his client denies any wrongdoing.

“Kara did not receive kickbacks, authorize kickbacks or participate in any kickbacks or ‘hush money’ arrangement,” Kelly said in a written response to questions.

Scarver also admitted to his role in the conspiracy, telling FBI agents that he received an $8,000 Chevy Avalanche as a “bribe” from Salad, noting he showed Salad how to “get away” with defrauding the meals program.

Scarver’s attorney, Dan Adkins, previously declined to address his client’s role in the fraud, noting that Scarver was investigated for more than a year and never charged, which Adkins said “speaks volumes, without need for further clarification.”

Ellison’s investigators have yet to receive the summaries of the FBI’s interviews with Scarver, Salad and other witnesses who implicated Partners officials in wrongdoing, but a spokesman said Ellison requested those records.

In June, Dan Rosen, the U.S. Attorney for Minnesota, declined to comment on the possibility of future charges against anyone who worked for Partners in Nutrition, referring reporters to his predecessor, Andy Luger. Luger declined to say why no one at the nonprofit was criminally charged.

Altogether, the Minnesota U.S. Attorney’s Office filed charges against 22 people who collectively received $99.2 million in fraudulent proceeds from Partners in Nutrition, according to a Star Tribune review of the charges and related records. So far, 17 of those people have been convicted or pleaded guilty.

Ellison’s team began its investigation of Partners in June 2025, after the U.S. Attorney’s Office informed state officials that it “had no objection to such an investigation,” according to an Ellison spokesman.

Previously, the only penalty Partners faced was in 2024 when the Minnesota Department of Education barred the organization, Lomen and seven other employees from participating in the meals program for at least seven years.

The education department stepped up its enforcement action in the wake of federal raids on Feeding our Future in January 2022. Two weeks later, Partners made the first of at least three payments to Omar Jamal, a politically connected consultant, to advocate on its behalf with state regulators, according to cancelled checks and minutes from a Partners board meeting obtained by the Star Tribune. Altogether, PIN paid Jamal at least $70,000, the records show.

Those payments came after Jamal told FBI agents that Partners was engaging in illegal activity and provided the names of five vendors who aided the scheme by providing “fake receipts,” according to Jamal’s September 2021 interview with the FBI. Jamal told investigators that he confronted Lomen, who “acted as if she knew about the fake receipts but did not mind sharing copies of them,” according to a summary of the interview obtained by the Star Tribune.

Jamal, who works as a community service officer for the Ramsey County Sheriff’s Office, is being scrutinized by his bosses after a Star Tribune investigation revealed that he earned nearly $250,000 by advocating on behalf of fraudsters while also informing on some of them to the FBI. That figure does not include the payments from Partners.

The sheriff’s department probe began after current and former members of the Ramsey County Board of Commissioners expressed concern about the Star Tribune’s investigation. Some former members have called for Jamal’s firing.

Jamal has declined to comment through his attorney, Patrick Boyle.

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