Federal authorities charged 48 people in Minnesota with conspiracy and other charges in what they said Tuesday was the largest fraud conspiracy related to the pandemic, stealing $250 million from a federal program that provides meals to low-income children.
Prosecutors say the defendants formed companies that claimed to feed tens of thousands of children across Minnesota, then sought to reimburse for those meals through real nutrition programs products of the United States Department of Agriculture. In fact, very few meals were served, prosecutors said, and the defendants used the money to buy luxury cars, property and jewelry.
“This $250 million is the floor price,” Andy Luger, US attorney for Minnesota, said at a news conference. “Our investigation continues.”
Many of the companies that claim to be serving food are sponsored by a nonprofit called Feeding Our Future, which has filed claims from the companies. Feeding Our Future founder and chief executive Aimee Bock is among those indicted, and authorities say she and others in her organization submitted fraud allegations to get a refund and get your money back.
Bock’s attorney, Kenneth Udoibok, said the indictment “does not indicate guilt or innocence.” He said he would not comment further until he had seen the indictment.
In interviews after law enforcement searched multiple locations in January, including Bock’s home and office, Bock denied stealing money and said she had never seen a license. fraud evidence.
Earlier this year, the US Department of Justice made pandemic-related fraud a priority. The Department has taken enforcement actions related to more than US$8 billion in suspected pandemic fraud, including bringing charges in more than 1,000 criminal cases involving more than 1,00 damages. 1 million dollar.
Federal officials have repeatedly described the alleged fraud as “shameless” and decried that it was related to a program aimed at raising children in need during the pandemic. Michael Paul, special agent in charge of the FBI Minneapolis office, called it “an amazing deception.”
Luger said the government has billed more than 125 million fake meals, with some defendants generating names for children using an online random name generator. He put out a refund claim form claiming that one site served exactly 2,500 meals a day Monday through Friday – no children were sick or short on the program.
“These kids were simply invented,” says Luger.
He said the government has recovered $50 million in funds and assets so far and expects more to be recovered.
The Minnesota defendants face multiple charges, including conspiracy, electronic fraud, money laundering and bribery. Luger said some of them were arrested Tuesday morning. Authorities announced 47 indictments at a press conference; The Star Tribune and The New York Times reported the allegations against Tuesday night. 48. A spokesperson for the US attorney did not immediately respond to messages.
According to court documents, the plan allegedly targets the USDA’s federal child nutrition programs, which provide food to low-income children and adults. In Minnesota, funds are administered by the state Department of Education, and meals were previously provided to children through educational programs, such as schools or daycare.
Food service websites sponsored by public or nonprofit groups, such as Feeding Our Future. The funding agency holds 10% to 15% of the refund fund as an administrative fee in exchange for submitting claims, funding the sites, and disbursing funds.
But during the pandemic, some standard requirements for sites participating in federal food nutrition programs have been waived. USDA allows for-profit restaurants to participate and allows food distribution outside of educational programs. The indictment documents say the defendants exploited such changes “to enrich themselves.”
The documents say Bock oversaw the program and that she and Feeding Our Future funded the opening of nearly 200 federal child nutrition program websites across the state, knowing the sites meant it. intend to submit fraud claims.
“These sites claim to fraudulently serve thousands of children every day within days or weeks of being founded, and despite having very few, if any, staff and little or no experience in serving thousands of children. this number of meals,” according to the indictment.
One example described a small storefront restaurant in Willmar, in central-western Minnesota, that typically served only a few dozen people per day. According to an indictment, the two defendants offered their restaurant owners $40,000 a month, then billed the government for about 1.6 million meals for 11 months of 2021, according to an indictment. They listed the names of about 2,000 children — nearly half of the local school district’s total enrollment — and only 33 names matched the actual student, the indictment said.
The charging document says that Feeding Our Future received nearly $18 million in federal child nutrition program funds in the form of administrative fees during 2021, and Bock and other employees received the payments. additional kickbacks, often disguised as “consultation fees” paid to affiliated companies.
According to an unsealed FBI affidavit earlier this year, Feeding Our Future received a $307,000 reimbursement from the USDA in 2018, $3.45 million in 2019 and $42.7 million in 2020. Reimbursement amounts increased to $197.9 million in 2021.
Court documents say the Minnesota Department of Education is increasingly concerned about the rapid increase in the number of websites sponsored by Feeding Our Future, as well as the increase in chargebacks.
The department began reviewing Feeding Our Future’s website applications more carefully and rejected dozens of them. In response, Bock sued the department in November 2020, alleging discrimination, saying the majority of her websites are based on immigrant communities. That case was dismissed.