COVID conspiracy: US Department of Justice charges 47 people for fraudulent child nutrition scheme

23 Sep 2022 --- The US Department of Justice (DOJ) has charged 47 people for defrauding the government out of US$250M through a child nutrition scheme. The scheme, perpetrated by the Minnesota, US-based non-profit organization (NPO) Feeding Our Future, recruited entities and individuals to create dozens of shell companies and opened over 200 child nutrition sites through the US government’s Federal Child Nutrition Program (FCNP). The sites then falsified information by claiming to feed thousands of children daily.

The DOJ has so far charged 47 people with wire fraud, conspiracy, bribery and money laundering in six separate indictments. The shell companies also served to receive and launder approximately US$250 million in proceeds from the FCNP, a pre-existing program that was modified to help alleviate the financial burden on families during the COVID-19 pandemic.

The defendants then used the stolen money to purchase real estate in Minnesota, Kentucky, Ohio, Kenya and Turkey, and purchase luxury vehicles as well as using it to pay for international travel.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the DOJ’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” says US Attorney General Merrick B. Garland. 

Feeding Our Future set up dozens of shell companies and over 200 fake feeding sites.“In partnership with agencies across government, the DOJ will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

A “brazen” scheme
According to the DOJ, the defendants exploited changes and relaxations in the FCNP’s funds disbursement guidelines that were instituted during the pandemic to make sure underserved children and their families received proper and adequate nutrition. 

The program, which is administered by the US Department of Agriculture (USDA), is supposed to provide free meals for needy children. In Minnesota, the Minnesota Department of Education (MDE) oversees the FCNP by funding meals through sites. 

 Each site must be sponsored by an “authorized sponsoring organization,” which charges the FCNP for reimbursement of expenses. The sponsoring agency then keeps 10 to 15% of the funds as an administrative fee. 

During the pandemic, the USDA waived some of the participation requirements by allowing for-profit restaurants to participate as well as allowing for off-site food distribution at sites not on school campuses.

Aimee Bock, the executive director and founder of Feeding Our Future, took advantage of these weakened regulations, and the NPO went from receiving US$3.4 million in reimbursement in 2019 to almost US$200 million in 2021.

“This was a brazen scheme of staggering proportions,” states Andrew M. Luger, US Attorney for the District of Minnesota. “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,” he stresses. The charges range from bribery to wire fraud and include six separate indictments.

“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.”

Fooling the system?
The defendants conducted the fraudulent operation by submitting fraudulent documents, including false invoices for fake food purchases, fake attendance rosters with fake names, and falsified meal count sheets, which reported fraudulent numbers of children served.

The DOJ further reported that some of the fake names were generated from the website “listofrandomenames.com.” Furthermore, some of the defendants utilized an Excel spreadsheet formula to insert random ages for each child in the fraudulent rosters since the recipients had to be between the ages of seven and seventeen.

Feeding Our Future then knowingly submitted the false documentation and, in turn, received over US$18 million in administrative fees to which they were not legally or rightfully entitled.

Despite knowing the claims were fraudulent, Feeding Our Future submitted the fraudulent claims to MDE and then disbursed the fraudulently obtained Federal Child Nutrition Program funds to the individuals and entities involved in the scheme. 

Besides the fraudulent fees, the NPO is also accused of “soliciting and receiving bribes and kickbacks.” These came from the individuals and shell companies they sponsored to enter the program and were listed as “consulting fees.”The defendants are charged with taking advantage of relaxations in the FCNP regulations intended to help underserved families during the pandemic.

Exploiting children
According to the press release, the scheme all came crashing down when the MDE attempted to conduct its own necessary oversight on the amounts of sites and claims being submitted. When the MDE pressed the NPO’s founder to verify the claims, Bock said that the MDE was being defamatory and discriminatory and unfairly targeting the organization. 

Bock even went so far as to file a lawsuit against the MDE after it began denying Feeding Our Future’s site applications, saying that the MDE had violated Minnesota’s Human Rights Act.

“Today’s indictments describe an egregious plot to steal public funds meant to care for children in need in what amounts to the largest pandemic relief fraud scheme yet,” says Christopher Wray, director of the US Federal Bureau of Investigation. 

“The defendants went to great lengths to exploit a program designed to feed underserved children in Minnesota amidst the COVID-19 pandemic, fraudulently diverting millions of dollars designated for the program for their own personal gain.”

“These charges send the message that the FBI and our law enforcement partners remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.”

A list of individuals, entities and the charges filed can be found on the DOJ’s website.

By William Bradford Nichols