Federal prosecutors have charged over 40 people in a $250 million fraud scheme that took federal funds designed to feed needy children and instead used the money for lavish personal purchases.
The Department of Justice said that the fraud scheme was organized by Aimee Bock, the former founder and executive director of Minnesota nonprofit Feeding Our Future.
She and the 46 other defendants are facing a variety of charges related to conspiracy, wire fraud, money laundering and bribery.
“Exploiting a government program intended to feed children at the time of a national crisis is the epitome of greed,” Special Agent in Charge Justin Campbell of the IRS Criminal Investigation, Chicago Field Office, said in a press release.
“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,” he said.
Ms. Bock’s organization took advantage of its prior relationship as a sponsor with the U.S. Department of Agriculture’s Federal Child Nutrition Program to carry out the fraud, according to the DOJ.
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The USDA relaxed the program’s standards during the COVID-19 pandemic to allow sponsors to set up distribution sites for needy children at for-profit restaurants and venues outside of education programs.
Typically, these distribution sites would submit reimbursement claims to their sponsor, and then the sponsors would secure federal funds to pay back what the sites had spent on meal distribution.
Sponsors would get to keep 10-15% of the funds as an administrative fee.
Federal prosecutors allege that Feeding Our Future recruited the other defendants to open up sites throughout Minnesota, who then claimed to be serving thousands of children each day within days or weeks of being formed.
In total, the nonprofit sponsored more than 250 sites around the state.
The defendants would go on to submit false invoices about how much was spent on food, fabricate meal count sheets of the number of children served and create fake attendance rosters with fake names and ages of children listed on them.
For example, the DOJ said that the website www.listofrandomnames.com was used as a source for one of their attendance rosters.
All this documentation was used to submit the fraudulent reimbursement claims to the Minnesota Department of Education (MDE), who acted as the state intermediary for the federal funds.
The nonprofit fraudulently obtained and distributed more than $240 million in federal funds during the life of the scheme, according to the DOJ, and was paid $18 million in administrative fees in that same period.
Feeding Our Future employees also took bribes and kickbacks that were paid in cash or passed off as “consulting fees” that were paid to shell companies created by the nonprofit to make them seem legitimate, federal authorities said.
Federal prosecutors said that the defendants used the federal money to buy luxury cars, take trips abroad, and purchase real estate in the U.S. as well as Kenya and Turkey.
After telling MDE that Feeding Our Future was monitoring its distribution sites, the DOJ said that Ms. Bock later accused MDE of discrimination when it asked for clarification of the sites’ operating expenses.
The state agency then prevented Feeding Our Future from sponsoring more sites, which caused Ms. Bock to file a lawsuit accusing MDE of violating the Minnesota Human Rights Act.
“This was a brazen scheme of staggering proportions,” U.S. Attorney Andrew M. Luger for the District of Minnesota said in a press release. “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.”