Federal prosecutors on Tuesday announced charges against 47 people accused of carrying out the biggest Covid fraud scheme to date, theft of $250 million through what officials described as a brazen and stunning conspiracy. which operated a federal program designed to feed needy children in Minnesota.
Prosecutors say a network of charities, restaurants and individuals pulled off the fraud claiming they were providing meals to tens of thousands of underserved children, when in fact the money was going to commercial real estate, luxury cars, luxury homes and even coastal property in Kenya. Authorities say the defendants took advantage of relaxed eligibility rules — and a lack of oversight — due to the pandemic.
“This was a brazen scheme of staggering proportions,” U.S. Attorney Andrew M. Luger said in a statement.
“The defendants worked extremely fast, stealing money at a breakneck pace,” he added at a press conference announcing the charges. “More than 125 million fake meals are involved in this case.”
Many of the defendants are accused not only of fraud, but also of corruption, as the government alleges charities received kickbacks from food sites in exchange for federal grants. And many are accused of money laundering for allegedly moving stolen funds through shell companies and other vehicles to cover their tracks.
Prosecutors say the fraud was overseen by Aimee Bock, who ran a nonprofit called Feeding Our Future. She denied any wrongdoing and maintained that if any fraud took place, it was without her knowledge.
Non-profit organizations such as Feeding Our Future were supposed to sponsor and oversee restaurants, community centers and other places where meals were to be provided.
The indictments say Feeding Our Future opened more than 250 meal distribution sites throughout Minnesota and fraudulently obtained and disbursed more than $240 million in federal child nutrition program funds, operated by the Department of Agriculture.
Many of the defendants come from the large Somali community in Minneapolis, which was also where most of the non-existent meals were believed to have been provided.
FBI affidavits say a well-known restaurant raised $1.1 million in a single month, claiming to have fed 185,000 children. The FBI pointed out in court records that a typical McDonald’s restaurant made $2.9 million – in an entire year.
In the summer of 2020, the FBI said in court records that state officials became suspicious of the large number of claimed meals on Feeding Our Future-sponsored sites and sought to deny payments to many of them. them. But Feeding Our Future sued in state court, and a judge ruled the state failed to make its case and ordered the payments continued.
The sites continued to receive millions of dollars that the government says were stolen, according to court records.
The judge, John Guthmann, was out of the country and could not be reached for comment, his court reporter told NBC News.
State officials eventually contacted the FBI, which began investigating, and carried out a series of raids in January that shut down the flow of funding.
So far, the Justice Department has seized property, vehicles and bank accounts worth $50 million, officials said.
CORRECTION (September 20, 2022, 12:45 PM ET): A previous version of this article misstated the dollar amount of the alleged fraud. Prosecutors say it was $250 million, not $250 billion.