In the greatest pandemic-related fraud operation to far -47 used the pandemic to defraud the food program of $250 million.
47 people used the pandemic to defraud the food program of $250 million.The greatest pandemic-related fraud operation to far, according to US officials, involved the theft of $250 million from a federal program that distributes meals to low-income children. 48 people were charged in Minnesota with conspiracy and other offenses on Tuesday.
A lot of the businesses that advertised that they were serving meals were supported by the charity Feeding Our Future, which submitted the businesses’ claims for payment. Aimee Bock, the founder and executive director of Feeding Our Future, was one of the individuals charged; according to the prosecution, she and other members of her organization submitted the false claims for reimbursement and received kickbacks.
According to federal prosecutors, the defendants set up businesses that represented themselves as providing food to tens of thousands of kids throughout Minnesota, then applied for reimbursement for those meals through the food nutrition programs run by the U.S. Department of Agriculture. Few meals were ever given, according to the prosecution, and the defendants used the money to purchase expensive vehicles, real estate, and jewelry.
Andy Luger, the U.S. attorney for Minnesota, said at a news conference. “This $250 million is the floor.” “Our investigation continues.”
The Department of Justice announced today federal criminal charges against 47 defendants for their alleged roles in a $250 million fraud scheme that exploited a federally-funded child nutrition program during the COVID-19 pandemic.
“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”
“Today’s indictments describe an egregious plot to steal public funds meant to care for children in need in what amounts to the largest pandemic relief fraud scheme yet,” said FBI Director Christopher Wray. “The defendants went to great lengths to exploit a program designed to feed underserved children in Minnesota amidst the COVID-19 pandemic, fraudulently diverting millions of dollars designated for the program for their own personal gain. These charges send the message that the FBI and our law enforcement partners remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.”
“This was a brazen scheme of staggering proportions,” said U.S. Attorney Andrew M. Luger for the District of Minnesota. “These defendants exploited a program designed to provide nutritious food to needy children during the COVID-19 pandemic. Instead, they prioritized their own greed, stealing more than a quarter of a billion dollars in federal funds to purchase luxury cars, houses, jewelry, and coastal resort property abroad. I commend the work of the skilled investigators and prosecutors who unraveled the lies, deception, and mountains of false documentation to bring this complex case to light.”
The 47 defendants are charged across six separate indictments and three criminal informations with charges of conspiracy, wire fraud, money laundering, and bribery.
As part of the charged scheme, Feeding Our Future employees recruited individuals and entities to open Federal Child Nutrition Program sites throughout the state of Minnesota. These sites, created and operated by the defendants and others, fraudulently claimed to be serving meals to thousands of children a day within just days or weeks of being formed. The defendants created dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites. The defendants also created shell companies to receive and launder the proceeds of their fraudulent scheme.
To carry out the scheme, the defendants also created and submitted false documentation. They submitted fraudulent meal count sheets purporting to document the number of children and meals served at each site. The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites. The defendants also submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day. These rosters were fabricated and created using fake names. For example, one roster was created using names from a website called “www.listofrandomnames.com.” Because the program only reimbursed for meals served to children, other defendants used an Excel formula to insert a random age between seven and 17 into the age column of the rosters.
Despite knowing the claims were fraudulent, Feeding Our Future submitted the fraudulent claims to MDE and then disbursed the fraudulently obtained Federal Child Nutrition Program funds to the individuals and entities involved in the scheme.
In exchange for sponsoring these sites’ fraudulent participation in the program, Feeding Our Future received more than $18 million in administrative fees to which it was not entitled. In addition to the administrative fees, Feeding Our Future employees solicited and received bribes and kickbacks from individuals and companies sponsored by Feeding Our Future. Many of these kickbacks were paid in cash or disguised as “consulting fees” paid to shell companies created by Feeding Our Future employees to make them appear legitimate.
When MDE attempted to perform necessary oversight regarding the number of sites and amount of claims being submitted, Bock and Feeding Our Future gave false assurances that they were monitoring the sites under its sponsorship and that the sites were serving the meals as claimed. When MDE employees pressed Bock for clarification, Bock accused MDE of discrimination and unfairly scrutinizing Feeding Our Future’s sites. When MDE denied Feeding Our Future site applications, Bock and Feeding Our Future filed a lawsuit accusing MDE of denying the site applications due to discrimination in violation of the Minnesota Human Rights Act.
In total, Feeding Our Future opened more than 250 sites throughout the state of Minnesota and fraudulently obtained and disbursed more than $240 million in Federal Child Nutrition Program funds. The defendants used the proceeds of their fraudulent scheme to purchase luxury vehicles, residential and commercial real estate in Minnesota as well as property in Ohio and Kentucky, real estate in Kenya and Turkey, and to fund international travel.
“Exploiting a government program intended to feed children at the time of a national crisis is the epitome of greed,” said Special Agent in Charge Justin Campbell of the IRS Criminal Investigation, Chicago Field Office. “As alleged, the defendants charged in this case chose to enrich themselves at the expense of children. Instead of feeding the future, they chose to steal from the future. IRS – Criminal Investigation is pleased to join our law enforcement partners to hold these defendants accountable.” Source FBI.gov