MINNEAPOLIS (AP) — Federal officials charged 47 people in Minnesota with conspiracy and other counts in what they said Tuesday was the biggest fraud scheme ever to profit from the COVID-19 pandemic by stealing $250 million from a federal program. Provides less food to carry. Income children.
Prosecutors say the defendants created companies that claimed to have fed thousands of children in Minnesota, then sought reimbursement for those meals through the U.S. Department of Agriculture’s food nutrition programs. Prosecutors say some of the food was actually served, and that the defendants used the money to buy luxury cars, property, and jewelry.
“That’s a $250 million floor,” Minnesota U.S. Attorney Andy Luger told a news conference. “Our investigation is ongoing.”
Many of the companies that claimed to have served the food were sponsored by a nonprofit called Feeding Our Future, which submitted the companies’ claims for reimbursement. Feeding Our Future’s founder and executive director, Amy Bock, was among those, and officials say she and others in her organization submitted fraudulent claims and received bribes in order to be reimbursed.
Bock’s attorney, Kenneth Udoibok, said the indictment “does not imply guilt or innocence.” He said he would not comment further until the indictment was seen.
In interviews in January after law enforcement searched several sites, including Bock’s home and offices, Bock denied stealing the money and said he had never seen evidence of fraud.
Earlier this year, the US Justice Department prioritized prosecution of pandemic-related fraud. The department has already taken enforcement action related to more than $8 billion in suspected pandemic fraud, including charges in more than 1,000 criminal cases involving more than $1.1 billion in damages.
Federal officials have repeatedly called the alleged fraud “shameless” and cried that it involved a program to feed children who needed help during the pandemic. Michael Paul, the special agent in charge of the Minneapolis FBI office, called it “a surprising display of deceit.”
Luger said the government was billed for more than 125 million counterfeit food, with some defendants making up children’s names using online random name generators. They displayed a form for reimbursement claiming that one site served exactly 2,500 meals each day from Monday to Friday – no child ever got sick or otherwise missed the program.
“These kids were just invented,” Luger said.
He said the government had so far recovered $50 million in money and assets and expected to recover more.
Defendants in Minnesota face a range of counts including conspiracy, wire fraud, money laundering and bribery. Luger said some of them were arrested on Tuesday morning.
According to court documents, the alleged plan targeted the USDA’s federal child nutrition programs, which provide meals to low-income children and adults. In Minnesota, funding is administered by the state’s Department of Education, and food has historically been provided to children through educational programs, such as schools or day care centers.
Sites that serve food are sponsored by public or non-profit groups such as Feeding Our Future. The sponsoring agency holds 10% to 15% of the reimbursement amount as an administrative fee in exchange for the submission of claims, sponsoring the sites, and distribution of funds.
But during the pandemic, some standard requirements were waived for sites to participate in federal food nutrition programs. The USDA allows for-profit restaurants to participate, and allows food to be distributed outside of educational programs. The charging documents say the defendants took advantage of such changes to “enrich themselves”.
The documents say that Bock oversaw the scheme and that he and Feeding Our Future sponsored the opening of about 200 federal child nutrition program sites across the state, knowing that the sites are intended to submit fraudulent claims.
According to the indictments, “the sites fraudulently claimed that they were serving food to thousands of children a day within days or weeks of being built and that despite having few staff and no experience of serving food in this quantity. “
One example describes a small storefront restaurant in Willamar, west-central Minnesota, which typically only serves a few dozen people a day. The two defendants offered the owner $40,000 a month to use their restaurant, then billed the government for about 1.6 million meals during the 11 months of 2021, according to an indictment. They listed the names of about 2,000 children – nearly half of the local school district’s total enrollment – and only 33 names matched the actual students, the indictment said.
Feeding Our Future received nearly $18 million in federal child nutrition program funds in 2021 alone as administrative fees, and Bock and other employees received additional kickbacks, often in addition to “consultation fees” paid to shell companies. were disguised as, the charging documents said.
According to the FBI affidavit that was closed earlier this year, Feeding Our Future received $307,000 from the USDA in 2018, $3.45 million in 2019 and $42.7 million in 2020. The reimbursement amount increased to $197.9 million in 2021.
Court documents say the Minnesota Department of Education was concerned about a rapid increase in the number of sites sponsored by Feeding Our Future, as well as an increase in reimbursements.
The department began investigating Feeding Our Future’s site applications more carefully, and rejected dozens of them. In response, Bock sued the department in November 2020 alleging discrimination, saying most of its sites were based in immigrant communities. That case has since been dismissed.