Federal authorities charge 47 people in theft of $250 million from child nutrition program



Federal authorities charged 47 people in Minnesota with conspiracy and different counts on Tuesday in what they stated was a large scheme that took benefit of the COVID-19 pandemic to steal $250 million from a federal program that gives meals to low-income kids.

Prosecutors say the defendants created firms that claimed to offer meals to tens of 1000’s of kids throughout Minnesota, then sought reimbursement for these meals via the U.S. Department of Agriculture’s meals nutrition applications. Prosecutors say few meals have been really served, and the defendants used the cash to purchase luxurious automobiles, property and jewellery.

“This $250 million is the ground,” Andy Luger, the U.S. attorney for Minnesota, said at a news conference. “Our investigation continues.”

Many of the companies that claimed to be serving food were sponsored by a nonprofit called Feeding Our Future, which submitted the companies’ claims for reimbursement. Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted, and authorities say she and others in her organization submitted the fraudulent claims for reimbursement and received kickbacks.

Bock’s attorney, Kenneth Udoibok, said he wouldn’t comment until he’s had a chance to see the indictment, but that the indictment “doesn’t indicate guilt or innocence.”

In an interview in January after law enforcement searched her home and offices, among other sites, Bock denied stealing money and said she never saw evidence of fraud.

Earlier this year, the U.S. Department of Justice made prosecuting pandemic-related fraud a priority. The department has already taken enforcement actions related to more than $8 billion in suspected pandemic fraud, including bringing charges in more than 1,000 criminal cases involving losses in excess of $1.1 billion.

The defendants in Minnesota face multiple counts, including conspiracy, wire fraud, money laundering and bribery.

According to court documents, the alleged scheme targeted the USDA’s federal child nutrition programs, which provide food to low-income children and adults. In Minnesota, the funds are administered by the state Department of Education, and meals have historically been provided through educational programs, such as schools or day care centers.

The sites that serve the food are sponsored by public or nonprofit groups, such as Feeding Our Future . The sponsoring agency keeps 10% to 15% of the reimbursement funds as an administrative fee in exchange for submitting claims, sponsoring the sites and disbursing the funds.

But during the pandemic, some of the standard requirements for sites to participate in the federal food nutrition programs were waived. Among them, the USDA allowed for-profit restaurants to participate, and allowed food to be distributed outside educational programs. The charging documents say the defendants exploited changes in the program’s requirements “to enrich themselves.”

Luger stated the scheme concerned greater than 125 million faux meals, with some defendants making up names for youngsters by utilizing a web-based random identify generator. He displayed one type for reimbursement that claimed a website served precisely 2,500 meals every day Monday via Friday — with no kids ever getting sick or in any other case lacking from the program.

“These kids have been merely invented,” Luger stated.

He stated the federal government has thus far recovered $50 million in cash and property and expects to get well extra.

The paperwork say Bock oversaw the scheme and that she and Feeding Our Future sponsored the opening of almost 200 federal child nutrition program websites all through the state, realizing that the websites supposed to submit fraudulent claims. “The sites fraudulently claimed to be serving meals to thousands of children a day within just days or weeks of being formed and despite having few, if any staff and little to no experience serving this volume of meals,” in accordance with the indictments.

Feeding Our Future obtained almost $18 million in federal child nutrition program funds as administrative charges in 2021 alone, and Bock and different workers obtained further kickbacks, which have been typically disguised as “consulting fees” paid to shell firms, the charging paperwork stated.

According to an FBI affidavit unsealed earlier this 12 months, Feeding Our Future obtained $307,000 in reimbursements from the USDA in 2018, $3.45 million in 2019 and $42.7 million in 2020. The quantity of reimbursements jumped to $197.9 million in 2021.

Court paperwork say the Minnesota Department of Education was rising involved in regards to the speedy enhance in the quantity of websites sponsored by Feeding Our Future, in addition to the rise in reimbursements.

The division started scrutinizing Feeding Our Future’s website functions extra rigorously, and denied dozens of them. In response, Bock sued the division in November 2020, alleging discrimination, saying the bulk of her websites are based mostly in immigrant communities. That case has since been dismissed.

This story initially appeared in Los Angeles Times .


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