Minneapolis business owner pleads guilty to trying to defraud $3.8M in federal funding for pandemic relief
The founder of a Minneapolis nonprofit and marketing company pleaded guilty to fraud for his role in a pandemic funding scheme.
Court documents show Tezzaree El-Amin Champion pleaded guilty on Wednesday to one count of wire fraud, one count of money laundering and one count of illegally possessing a firearm as a felon.
The 28-year-old founder of the nonprofit Encouraging Leaders and marketing company Futuristic Management LLC submitted 42 grants and public-contract applications for federal funding between 2020 and 2024, according to court documents.
According to court documents, these applications contained material false misrepresentations in order to obtain funding, including false rosters of Encouraging Leaders' board of directors, a falsified independent third party audit for the nonprofit, falsified claims of community partner connections, which included local governments, requests for payment based on overstated hours, and false claims of events that never occurred or were organized by other organizations.
Officials then said that Champion transferred funds received from the applications to himself, using organizational funds for personal matters.
Out of the 42 grants Encouraging Leaders applied for, which would amount to more than $3.8 million in funding, it was awarded 27 grants, resulting in $2.7 million in funding. The nonprofit actually received approximately $1.5 million in funding, show court documents.
Through Futuristic Management, court documents show that Champion recruited and assisted clients in submitting fraudulent applications to Hennepin County's Small Business Relief grant program as well as the U.S. Small Business Administration's Paycheck Protection and Economic Injury Disaster Loan programs.
These applications grossly overstated applicants' income and expenses, supported by falsified tax records and lease documents obtained from Champion, officials say.
Court documents say that Champion also submitted nine fraudulent applications on his own behalf.
Through Futuristic Management, Champion was serving as a business advisor for Hennepin County under the county's Elevate Business program.
Champion was supposed to provide free marketing services to local small businesses as part of this program, instead he was billing clients and receiving payments from Hennepin County for services he'd already been paid for, court documents say.
During the federal investigation into Champion, officials say they recovered a safe containing $127,000 in cash and a Ruger LCR .357 revolver with Champion's DNA on it.
Due to a 2018 conviction for second-degree assault, Champion is prohibited under federal law from possessing firearms or ammunition at any time, court documents say.
Champion pled guilty on Wednesday to one count of wire fraud, one count of money laundering, and one count of illegally possessing a firearm as a felon.
Champion also agreed to pay restitution of at least $3,479,575 to the victims of his offense, court documents say.
A sentencing hearing has not been scheduled yet.
NOTE: The video attached to this article originally aired on May 22, 2024.
