- Federal prosecutors announced charges Tuesday against 47 people.
- Authorities say the defendants took advantage of loosened eligibility rules and a lack of oversight.
- Many are charged with money laundering for allegedly moving stolen funds through shell corporations.
Federal prosecutors charged 47 people on Tuesday with the largest Covid fraud scheme to date, a $250 billion theft through what officials described as a brazen and staggering plot that exploited a federal programme designed to feed needy children in Minnesota.
Prosecutors allege that a web of charities, restaurants, and individuals perpetrated the fraud by claiming to be providing meals for tens of thousands of underserved children when, in fact, the funds were diverted to commercial real estate, luxury cars, fancy homes, and even coastal property in Kenya. Authorities claim the defendants took advantage of the pandemic’s loosened eligibility rules — and a lack of oversight.
In a statement, U.S. Attorney Andrew M. Luger said, “This was a brazen scheme of staggering proportions.”
“The defendants worked extremely quickly, stealing money at breakneck speed,” he said at a press conference announcing the charges. “In this case, more than 125 million fake meals are at stake.”
Many of the defendants are charged not only with fraud but also with bribery, according to the government, because the charities allegedly took kickbacks from the food sites in exchange for steering them federal grants. Many are also charged with money laundering for allegedly transferring stolen funds through shell corporations and other vehicles in order to obfuscate the trail.
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Prosecutors say Aimee Bock, who ran a non-profit called Feeding our Future, was in charge of the fraud. She has denied any wrongdoing and claimed that any fraud occurred without her knowledge.
Feeding our Future and other non-profits were supposed to sponsor and oversee the restaurants, community centres, and other locations where the meals would be served.
According to the indictments, Feeding Our Future opened more than 250 meal distribution sites throughout Minnesota and fraudulently obtained and disbursed more than $240 million in funds from the Agriculture Department’s Federal Child Nutrition Program.
Many of the defendants are from Minneapolis’ large Somali community, which is also where the majority of the allegedly non-existent meals were supposed to be served.
According to FBI affidavits, one well-known local restaurant made $1.1 million in a single month while claiming to have fed 185,000 children. In court records, the FBI stated that a typical McDonald’s restaurant earns $2.9 million per year.
According to court documents, the FBI became suspicious of the large number of meals claimed at Feeding our Future sites in the summer of 2020, and sought to deny payments at many of them. However, Feeding Our Future filed a lawsuit in state court, and a judge ruled that the state had failed to make its case and ordered that the payments continue.
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