FBI, IRS Investigation Identifies $250 Million in Fraudulently Obtained Funds
An investigation into the misuse of funds intended to feed children during the pandemic has led to the indictment of 47 suspects. According to reports from the Federal Bureau of Investigations (FBI), the fraud scheme defrauded the COVID-19 assistance program of more than $250 million in funds.
The funds were dedicated to reimbursing programs that served meals to in need children during the pandemic. Investigators concluded the fraudsters did not deliver meals and instead used the funds to purchase cars, vacations, coastal resort properties, electronics, and other luxury items for themselves.
The investigation centered around a Minneapolis nonprofit called Feeding Our Future and the nonprofit’s former founder and executive director, Aimee Bock. Along with multiple fraud charged, Bock has been charged with bribery as well.
Feeding Our Future sponsored numerous organizations participating in the U.S. Department of Agriculture’s (USDA) Federal Child Nutrition Program. Under the program, organizations sponsored restaurants and catering services which provided meals to children. The sponsoring organization would monitor the distribution of prepare reimbursement claims for children.
Rather than overseeing the distribution of meals, Feeding Our Families allegedly used their position to engineer the fraud scheme.
The charges allege that the organization recruited individuals and entities to open fake Federal Children Nutrition Program cites throughout Minnesota. Once opened, the defendants claimed to serve thousands of children a day despite having little to no staff with experience serving this volume of meals.
According to the FBI, Feeding Our Future received more than $18 million in administrative fees it was not entitled to.
Bock’s organization allegedly solicited and received bribes and kickbacks from the companies it sponsored. Many of these payments were done in either cash or disguised as “consulting fees” that were paid to shell companies created by Feeding Our Future employees to make them appear legitimate.
In total, the FBI alleges that the non-closed nonprofit opened more than 250 sites throughout Minnesota from March 2020 to January 2022 and falsely claimed to serve more than 125 million meals. This scheme represents the largest theft of federal funds allocated to pandemic aid to date.
“During this investigation, the FBI followed many trails—including both money trails and paper trails—filled with falsified invoices and receipts, fictitious names, and an inconceivable number of meals allegedly served, all representing an astonishing display of deceit and evidence of outright fraud,” said FBI Special Agent in Charge Michael Paul.
The investigation lasted 18 months and was “extremely complex,” according to the FBI. Overall, the FB conducted more than 100 search warrants, completed an additional 100 seizure warrants, and reviewed more than 1,000 bank accounts. U.S. Attorney Andrew Lugar announced that the government so far has been able to recover $50 million from 60 bank accounts, 45 pieces of property, and numerous vehicles and additional items, such as electronics and high-end clothing. Additional seizures are expected.
Put simply, special agent in charge said, “it was just a massive fraud scheme.”