Prosecutors say the defendants created companies that claimed to provide meals to tens of thousands of children across Minnesota and then sought reimbursement for those meals through the U.S. Department of Agriculture’s food assistance programs. Prosecutors say few meals were actually served and the defendants used the money to buy luxury cars, property and jewelry. “That $250 million is the floor,” Andy Luger, the U.S. attorney for Minnesota, said at a news conference. “Our investigation is ongoing.” Many of the companies that claimed to serve food were funded by a nonprofit called Feeding Our Future, which filed the companies’ claims for compensation. Feeding Our Future founder and executive director Aimee Bock was among the defendants, and authorities say she and others in her organization submitted the fraudulent claims for compensation and received kickbacks. Bock’s attorney, Kenneth Udomok, said the indictment “does not indicate guilt or innocence.” He said he would not comment further until he saw the indictment. In interviews after law enforcement searched multiple sites in January, including Bock’s home and offices, Bock denied stealing any money and said she never saw evidence of fraud. Earlier this year, the US Department of Justice made prosecuting fraud related to the pandemic a priority. The department has already taken enforcement actions related to more than $8 billion in suspected pandemic fraud, including indictments in more than 1,000 criminal cases involving more than $1.1 billion in losses. Federal officials have repeatedly described the alleged fraud as “brazen” and said it involved a program intended to feed children in need during the pandemic. Michael Paul, special agent in charge of the FBI’s Minneapolis office, called it “a stunning display of deception.” Luger said the government charged more than 125 million fake meals, with some defendants making up names for children using an online random name generator. He showed a reimbursement form that claimed one site served exactly 2,500 meals each day Monday through Friday — without a single child getting sick or otherwise missing the program. “These guys just made it up,” Luger said. He said the government has so far recovered $50 million in money and property and expects to recover more. The Minnesota defendants face multiple charges including conspiracy, wire fraud, money laundering and bribery. Luger said some of them were arrested Tuesday morning. According to court documents, the alleged scheme targeted the USDA’s federal child nutrition programs, which provide food to low-income children and adults. In Minnesota, the funds are administered by the state Department of Education, and the meals have historically been provided to children through educational programs such as schools or day care centers. Sites serving the food are funded by public or non-profit groups such as Feeding Our Future. The sponsor keeps 10% to 15% of the refund funds as an administrative fee in exchange for submitting claims, sponsoring the sites and disbursing the funds. However, during the pandemic, some of the standard requirements for sites to participate in federal food nutrition programs were waived. The USDA allowed for-profit restaurants to participate and allowed food distribution outside of educational programs. Charging documents say the defendants took advantage of such changes “to enrich themselves.” The documents say Bock oversaw the program and that she and Feeding Our Future sponsored the opening of nearly 200 federal child nutrition program sites across the state, knowing the sites were intended to make fraudulent claims. “The sites fraudulently claimed to be serving meals to thousands of children a day within just a few days or weeks of being set up and despite having little to no staff and little to no experience serving that volume of meals,” according to the indictments. One example described a small storefront restaurant in Willmar, west-central Minnesota, that typically served only a few dozen people a day. Two defendants offered the owner $40,000 a month to use his restaurant and then billed the government for about 1.6 million meals through 11 months of 2021, according to an indictment. They listed the names of about 2,000 children — nearly half of the total enrollment in the local school district — and only 33 names matched actual students, the indictment said. Feeding Our Future received nearly $18 million in federal child nutrition program funds in administrative fees in 2021 alone, and Bock and other employees received additional kickbacks, often disguised as “consulting fees” paid to shell companies, charging documents state . According to an FBI affidavit unsealed earlier this year, Feeding Our Future received $307,000 in reimbursements from the USDA in 2018, $3.45 million in 2019 and $42.7 million in 2020. The amount of reimbursements jumped to 192021 million dollars in 2018. Court documents say the Minnesota Department of Education became increasingly concerned about the rapid increase in the number of Feeding Our Future funded sites, as well as the increase in reimbursements. The department began looking more closely at the Feeding Our Future website’s applications and denied dozens of them. In response, Bock sued the department in November 2020, alleging discrimination, saying the majority of its sites are based in immigrant communities. The case has since been dismissed.
