MINNEAPOLIS– Federal authorities on Tuesday charged 47 people in Minnesota with conspiracy and other charges in what they said was a massive scheme that took advantage of the COVID-19 pandemic to steal $250 million from a program federal government that provides meals to low-income children.
Prosecutors say the defendants set up businesses that claimed to provide food to tens of thousands of children across Minnesota, then sought reimbursement for those meals through the U.S. Department of Health’s Food Nutrition Programs. ‘Agriculture. Prosecutors say few meals were served and the defendants used the money to buy luxury cars, property and jewelry.
Many businesses claiming to serve food were sponsored by a nonprofit organization called Feeding Our Future, which submitted the businesses’ claims for reimbursement. Feeding Our Future founder and executive director Aimee Bock was among those charged, and authorities say she and other members of her organization submitted the fraudulent refund claims and received bribes .
Bock’s attorney, Kenneth Udoibok, said he would not comment until he had a chance to see the indictment, but the indictment “does not indicate not guilt or innocence”.
In an interview earlier this year, Bock denied stealing money and said she had never seen evidence of fraud.
The defendants face multiple charges, including conspiracy, wire fraud, money laundering and corruption.
Earlier this year, the US Department of Justice made prosecuting pandemic-related fraud a priority. The department has already taken enforcement action on more than $8 billion in suspected pandemic-related fraud, including bringing charges in more than 1,000 criminal cases involving losses in excess of $1.1 billion.
According to court documents, the alleged scheme targeted USDA’s federal infant nutrition programs, which provide food to low-income children and adults. In Minnesota, funds are administered by the state Department of Education, and meals have historically been provided to children through educational programs, such as schools or daycares.
Sites that serve food are sponsored by public or non-profit groups, such as Feeding Our Future. The sponsoring agency retains 10% to 15% of reimbursement funds as an administrative fee in exchange for submitting claims, sponsoring sites and disbursing funds.
But during the pandemic, some of the standard requirements for sites to participate in federal food nutrition programs have been waived. Among them, the USDA allowed for-profit restaurants to participate and allowed food distribution outside of educational programs. The charging documents say the defendants exploited changes in program requirements “to enrich themselves.”
The documents indicate that Bock oversaw the program and that she and Feeding Our Future sponsored the opening of nearly 200 federal child nutrition program sites statewide, knowing that the sites intended to submit fraudulent claims. “The sites fraudulently claimed to serve meals to thousands of children a day just days or weeks after their creation and despite having little or no staff and little or no experience in serving this volume meals,” according to the indictments.
Feeding Our Future received nearly $18 million in federal child nutrition program funds as administrative fees in 2021 alone, and Bock and other employees received additional kickbacks, which were often disguised as “consulting fees” paid to front companies, according to billing documents.
According to an unsealed FBI affidavit earlier this year, Feeding Our Future received $307,000 in reimbursements from the USDA in 2018, $3.45 million in 2019 and $42.7 million in 2020. reimbursements jumped to $197.9 million in 2021.
Court documents indicate that the Minnesota Department of Education was growing increasingly concerned about the rapid increase in the number of sites sponsored by Feeding Our Future, as well as increasing refunds.
The department began to scrutinize applications from the Feeding Our Future site more carefully and turned down dozens. In response, Bock sued the department in November 2020, alleging discrimination, saying the majority of its sites are based in immigrant communities. This case has since been dismissed.