Federal authorities on Tuesday indicted 47 people in Minnesota on conspiracy and other charges in what they say was a massive scheme that exploited the COVID-19 pandemic to steal $250 million from a federal program that helps children with low income Income provides meals.
Prosecutors say the defendants set up businesses that claimed to provide food to tens of thousands of children across Minnesota and then sought reimbursement for those meals through the U.S. Department of Agriculture’s nutrition programs. Prosecutors say few meals were actually served, and the defendants used the money to buy luxury cars, real estate and jewelry.
Many of the companies claiming to serve food were sponsored by a nonprofit organization called Feeding Our Future, which submitted the companies’ claims for reimbursement. Feeding Our Future founder and executive director Aimee Bock was among those accused, and authorities say she and others within her organization filed the fraudulent claims for reimbursement and received kickbacks.
Bock’s attorney, Kenneth Udoibok, said he would not comment until he saw the indictment, but that the indictment “does not indicate guilt or innocence.”
In an interview earlier this year, Bock denied stealing money and said she never saw evidence of fraud.
The defendants face multiple charges including conspiracy, wire fraud, money laundering and bribery.
Earlier this year, the US Department of Justice made prosecuting fraud related to the pandemic a priority. The department has already taken enforcement action related to more than $8 billion in alleged pandemic fraud, including indictments in more than 1,000 criminal cases with losses in excess of $1.1 billion.
According to court documents, the alleged program targeted the USDA’s state child nutrition programs, which provide food for children and low-income adults. In Minnesota, funds are administered by the state Department of Education, and children have historically been provided with meals through educational programs such as schools or daycares.
The places where the food is served are sponsored by public or non-profit groups like Feeding Our Future. The sponsoring agency retains 10% to 15% of the refund funds as an administration fee in exchange for submitting applications, sponsoring the websites, and disbursing the funds.
However, during the pandemic, some of the standard requirements for sites to participate in federal nutrition programs have been waived. Among them, the USDA allowed the participation of for-profit restaurants and food distributions outside of educational programs. The indictment documents state that the defendants took advantage of changes in the program’s requirements “to enrich themselves.”
The documents say that Bock oversaw the program and that she and Feeding Our Future sponsored the opening of nearly 200 federal child feeding program sites statewide, knowing the sites intended to file fraudulent claims. “The websites fraudulently claimed to be serving meals to thousands of children daily within just a few days or weeks of their inception, despite the fact that they have few, if any, employees and little to no experience serving that quantity of meals” , according to the indictment.
Feeding Our Future received nearly $18 million in federal child feeding programs in administrative fees in 2021 alone, and Bock and other employees received additional kickbacks often disguised as “consulting fees” paid to shell companies, fee documents say.
According to an FBI affidavit unsealed earlier this year, Feeding Our Future received reimbursements from the USDA of $307,000 in 2018, $3.45 million in 2019 and $42.7 million in 2020. Reimbursements increased to $197.9 million in 2021.
According to court documents, the Minnesota Department of Education was increasingly concerned about the rapid increase in Feeding Our Future-sponsored sites, as well as the increase in reimbursements.
The department began reviewing Feeding Our Future’s applications more carefully and turned down dozens of them. In response, Bock sued the department in November 2020 for alleged discrimination, saying the majority of its websites are in immigrant communities. This case has since been dropped.