For stealing more than $250 million from a federally funded child nutrition programme, 47 suspects have been indicted.
The money was meant to cover the costs of feeding hungry kids during the COVID-19 pandemic, but few meals, according to the investigators, were ever served. Instead, it is alleged that the defendants took advantage of the funds to buy themselves cars, trips, coastal resort homes, electronics, and other luxuries.
According to the accusations, the scheme is the biggest theft of federal funds intended for pandemic aid to date.
Aimee Bock, the organization’s former executive director and founder, and the now-defunct Minneapolis nonprofit organisation called Feeding Our Future are at the centre of the investigation. Bock, who oversaw the scheme, has been charged with numerous counts of fraud and bribery.
Numerous organisations that registered to take part in the Federal Child Nutrition Program were sponsored by Feeding Our Future. The U.S. Department of Agriculture oversees the program’s administration, and states are responsible for local funding distribution.
The programme requires local eateries and catering services that want to provide meals for the kids to be sponsored by another organisation. The sponsoring company keeps an eye on the locations and creates reimbursement requests for meals served by the locations.
However, in this instance, Feeding Our Future is accused of using its status as a sponsor to plan a sizable fraud scheme.
According to the charges, the group started soliciting people and organisations to launch fictitious Federal Child Nutrition Program sites across Minnesota starting in early 2020.
In spite of having little to no staff and little to no experience serving this volume of meals, these sites, developed and run by the defendants and others, falsely claimed to be serving meals to thousands of children every day within days or weeks of their formation.
Feeding Our Future received over $18 million in unjustified administrative fees in return for sponsoring these sites’ deceptive participation in the programme.
Employees of Feeding Our Future are also accused of asking for and accepting bribes and kickbacks from the people and businesses it sponsors. Many of these payments were either in cash or were given to fictitious businesses that employees of Feeding Our Future had set up as “consulting fees” to give them the appearance of legitimacy.
Between March 2020 and January 2022, Feeding Our Future built more than 250 locations around Minnesota and fraudulently claimed to have provided 125 million meals.
According to the charges, the defendants carried out the scam in a variety of distinct methods, including:
- Conspirators submitted a fake attendance roster listing the names of 2,040 children who attended one of the sponsor’s afterschool programs, yet only 20 names matched those of children who were attending school in the district.
- One site claimed to serve 2,000 to 3,000 meals per day, seven days a week, from a restaurant that previously had only a few dozen customers a day and $500-$600 in daily sales the previous year.
- One roster was created using names from a website called listofrandomnames.com. Because the program only reimbursed for meals served to children, other defendants used an Excel formula to insert a random age between 7 and 17 into the age column of the rosters. In some expense reports submitted over a period of months, the names of the children would stay the same, but their ages would change based on the random assignment.
The FBI’s forensic accountants were instrumental in unravelling the fraud, according to FBI Special Agent in Charge Michael Paul, who spoke at a press conference to announce the charges.
In his statement, he said, “The FBI followed many trails—including both money and paper trails—during this investigation, filled with fabricated invoices and receipts, fictitious names, and an incomprehensibly large number of meals allegedly served, all representing an astonishing display of deceit and evidence of outright fraud.
Paul said that despite the 18-month investigation’s tremendous complexity, the crime was really relatively straightforward: “It was simply a huge fraud operation.”
The FBI and its law enforcement partners have examined more than 1,000 bank accounts and executed more than 100 seizure orders in addition to more than 100 search warrants.
According to U.S. Attorney Andrew Lugar, the government has so far been successful in recovering $50 million from 60 bank accounts, 45 items of property, multiple automobiles, and other commodities like gadgets and designer apparel. More seizures are anticipated.
According to FBI Director Christopher Wray, the charges “reveal an appalling effort to steal public monies intended to care for children in need in what amounts to the greatest pandemic relief fraud operation ever.”
In the middle of the COVID-19 outbreak, the defendants “went to tremendous measures to take advantage of a programme intended to feed underprivileged children in Minnesota, fraudulently diverting millions of funds intended for the programme for their own financial benefit”.
These accusations serve as a warning that the FBI and our law enforcement allies are on high alert and will resolutely go after anybody trying to gain an unfair financial advantage.