Topline
The Department of Justice charged 47 people in Minnesota with allegedly stealing $250 million from a federal program that provides meals to low-income students—the largest in a string of massive alleged fraud schemes involving Covid-19 pandemic relief funds.
The DOJ charged 47 in a $250 million pandemic fraud scheme on Tuesday.
Key Facts
The DOJ charged the defendants—most of whom are from Minnesota—with conspiracy, wire fraud, money laundering and bribery, in what it described as a “massive scheme” to defraud the Department of Agriculture’s Federal Child Nutrition Program by misappropriating money that was “intended as reimbursements for the cost of serving meals to children.”
Prosecutors say Aimee Bock, the executive director of an organization called Feeding Our Future, oversaw the scheme and recruited people to open more than 250 Federal Child Nutrition Program sites throughout Minnesota.
The DOJ says the defendants claimed to be serving meals to thousands of children a day just after the nutrition sites were formed, but in reality, they created shell companies to enroll in the program and to receive and launder the proceeds using false documentation.
The defendants allegedly obtained and distributed about $250 million in federal funds, which prosecutors say they used to purchase luxury vehicles, fund travel costs and buy real estate in Minnesota, Ohio and Kentucky, as well as Kenya and Turkey, a scheme that IRS Special Agent Justin Campbell called the “epitome of greed” in a press release.
Bock’s attorney Kenneth Udoibok told Forbes he is “surprised that Ms. Bock has been indicted because she did nothing worthy of indictment,” adding an “indictment does not signify guilt or innocence.”
Key Background
The Federal Child Nutrition Program—which subsidizes meals in schools and other settings—predates the Covid-19 pandemic, but the Department of Agriculture waived several requirements after the coronavirus struck, including allowing restaurants to participate and letting food distribution take place outside of educational programs. The DOJ has prioritized prosecuting pandemic-related fraud, which often takes advantage of generous federal assistance programs. Last year, the Secret Service estimated fraudsters had stolen as much as $100 billion of the roughly $3.5 trillion administered in Covid-19 relief funding since the start of the pandemic in early 2020. Last month, the Secret Service announced it had recovered $286 million in Covid-related small business relief loans stolen using fraudulent identities.
Crucial Quote
“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,” FBI Director Christopher Wray said in a statement.
Further Reading
Feds: Minnesota food scheme stole $250M; 47 people charged (Associated Press)
Feds accuse 47 people of stealing cash meant to help feed needy kids in ‘staggering’ Covid scheme (NBC News)
Source: https://www.forbes.com/sites/brianbushard/2022/09/20/doj-charges-47-people-with-stealing-250-million-from-child-nutrition-program/