47 accused of siphoning off $250 million from COVID-19 children’s meal program

WASHINGTON — Federal authorities have released charges against 47 people accused of embezzling $250 million from a coronavirus pandemic relief program designed to provide meals for children.

Prosecutors on Tuesday described “a brazen scheme of staggering proportions” that exploited a federally funded program to serve needy Minnesota children during the pandemic.

U.S. Attorney Andrew M. Luger, Minnesota’s chief federal prosecutor, said the suspects used a local nonprofit known as “Feeding Our Future” as a cover to claim reimbursement for meals never provided, and allegedly used federal money to purchase luxury cars, homes, jewelry, and resort property overseas.

“I salute the work of skilled investigators and prosecutors who have unraveled the lies, the deception and the mountains of forged documents to bring this complex case to light,” Luger said.

The fraud may have been even bigger than now known, he said.

“That $250 million is the floor,” Luger said at a press conference. “Our investigation is continuing.”

U.S. Attorney General Merrick Garland described the federal action as the most extensive fraud case to emerge from the government’s massive pandemic relief effort.

FBI Director Christopher Wray said the allegations represented “a blatant conspiracy” by suspects who “had gone to great lengths” to embezzle a quarter of a billion dollars to enrich themselves.

After:Iowa businessman charged with fraud and failure to pay more than $440,000 in employment taxes

The Minnesota nonprofit, according to court documents, redirected money provided by the federal Child Nutrition Program, administered by the US Department of Agriculture, to provide free meals to children in need.

Federal prosecutors said the operation was allegedly overseen by Aimee Bock, founder and executive director of the local nonprofit, whose federal aid payouts rose dramatically from $3.4 million in 2019 to nearly $200 million in 2021.

The organization, according to court records, “fraudulently claimed to serve meals to thousands of children a day just days or weeks after it was established.”

“Defendants created dozens of shell companies to enroll in the program as Federal Infant Nutrition Program sites. Defendants also created shell companies to receive and launder the proceeds of their fraudulent scheme,” the Defendants said. prosecutors.

One example describes a small storefront restaurant in Willmar, west-central Minnesota, that typically only served a few dozen people a day. Two defendants offered the owner $40,000 a month to use his restaurant and then billed the government for some 1.6 million meals over 11 months of 2021, an indictment claims. They listed the names of about 2,000 children — nearly half of the local school district’s total enrollment — and only 33 names matched real students, according to the indictment.

Prosecutors accused the suspects of submitting false meal counts, fake food purchase invoices and fabricated attendance lists, some of which were taken from a website that produces lists of random names.

“Because the program only reimbursed meals served to children, other defendants used a computer formula to insert random ages, between 7 and 17, into the age column of the listings,” officials said.

“These kids were just made up,” Luger said. He said the government has so far recovered $50 million in cash and property and expects to recover more.

When the Minnesota Department of Education sought to verify the nonprofit’s activities, Bock allegedly “gave false assurances” that the organization monitored its 250 sites across the state and served meals as noted.

“When MDE employees pressed Bock for clarification, Bock accused MDE of discrimination and unfair review of the Feeding Our Future sites,” prosecutors claimed.

Aimee Bock, executive director of the nonprofit Feeding Our Future, speaks Thursday, Jan. 27, 2022, in St. Anthony, Minn. (Shari L. Gross/Star Tribune via AP)

Bock’s group, according to court documents, went so far as to file a lawsuit against the state when the Department of Education began denying the group’s requests for future feeding sites. Bock’s group accused the state of discrimination in violation of Minnesota human rights law. This case has since been dismissed.

Bock’s attorney, Kenneth Udoibok, said the indictment “does not indicate guilt or innocence”. He said he would not comment further until he saw the indictment.

In interviews after law enforcement searched multiple sites in January, including Bock’s home and offices, Bock denied stealing money and said he never saw evidence of fraud. .

The Associated Press contributed to this report.

Ryan H. Bowman