Government grants for Minnesota's poor went for handbags, designer jeans

The two nonprofit programs for poor Minnesotans that Roberta Barnes started in 2002 and 2008 touched the heartstrings and she was rewarded with $1.7 million in state grant funds to underwrite her efforts.

The trouble was that more than a quarter of the money given by two state agencies for combating teen pregnancy and providing housing assistance appears to have gone to Barnes and to members of her family.

It included $731 for handbags by Miche; $247 to a designer jean retailer; $713 for sleep apnea supplies and equipment; $273 to the St. Paul impound lot; and $6,050 to pay her son's rent.

Barnes, 57, of St. Paul, pleaded guilty this week before U.S. District Judge John Tunheim to one count of mail fraud.

U.S. Attorney Andy Luger said she stole more than $460,000 in state and federal grant money.

"This defendant stole from grant programs designed to help underprivileged communities in Minnesota," said Assistant U.S. Attorney Benjamin Langner in a statement.

"She used the guise of two nonprofit entities to steal money that could have been used for philanthropic purposes in order to enrich herself."

Barnes' two companies, Agape House for Mothers, started in 2002, and Sierra Young Family Institute, begun in 2008, also used the grant money for personal mortgage and car payments, according to a plea agreement filed in federal court.

Some of the funds she received came from the Minnesota Health Department under a program aimed at preventing and reducing teen pregnancies, particularly among minority populations.

She also got money from the Minnesota Housing Finance Agency under its initiative to end long-term homelessness.

The fraud dates back at least to 2009 and continued into 2012, according to the plea agreement. Barnes was the president of both nonprofits.

The legislative auditor's report said Barnes fabricated documents to cover up the theft. She was unable to adequately explain the basis for $22,320 in checks she made payable to herself and $16,790 that she withdrew in cash from ATMs and banks.

Under the plea agreement Barnes will be required to forfeit property, including a 2006 Buick Rendezvous, and make restitution.

The plea agreement states that the sentencing guidelines would set a prison sentence of 27 to 33 months and a fine range from $6,000 to $60,000.

Both sides stated in the plea agreement that they reserve the right to file motions for a sentence outside the applicable guidelines. No sentencing date has been set.