DOJ charges 47 in $250M pandemic fraud scheme

The Department of Justice announced criminal charges against 47 defendants for allegedly defrauding taxpayers of $250 million by exploiting a child nutrition program.

People defrauded taxpayers when the federal government waived security measures for the Federal Child Nutrition Program during the COVID-19 pandemic, allowing for-profit restaurants to participate and for off-site food distribution to children.

The Center Square reported the first arrest related to the scheme in April.

Defendants allegedly defrauded the FCNP and used proceeds to buy luxury vehicles, residential and commercial real estate in Minnesota, property in Ohio and Kentucky, and real estate in Kenya and Turkey. The money also funded international travel.

Attorney General Merrick B. Garland said the indictments alleged the “largest pandemic relief fraud scheme charged to date.”

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” Garland said in a statement. “In partnership with agencies across government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

The federal government oversees the FCNP program with the Minnesota Department of Education. Meals are served by sites that require an authorized sponsor. The defendants allegedly created shell companies and forged child roster meal invoices using random name generators.

The federal government reimburses MDE per meal, and MDE transfers the money to the sponsoring agency, which pays its sponsorship sites. The sponsoring agency retains 10% to 15% of the funds as an administrative fee.

The indictment charged Aimee Bock, founder and executive director of the nonprofit sponsor Feeding Our Future, with overseeing the scheme. In 2019, FOF disbursed about $3.4 million in federal funds, which increased to nearly $200 million in 2021. FOF opened more than 250 sites in Minnesota and fraudulently obtained and disbursed more than $240 million in FCNP funds.

In exchange for sponsoring fake sites, court documents say FOF received more than $18 million in administrative fees. FOF employees accepted bribes and kickbacks from individuals and companies sponsored by FOF, often paid in cash or disguised as “consulting fees” paid to shell companies.

“This was a brazen scheme of staggering proportions,” U.S. Attorney Andrew M. Luger for the District of Minnesota said in a statement. “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. I commend the work of the skilled investigators and prosecutors who unraveled the lies, deception, and mountains of false documentation to bring this complex case to light.”

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