On Tuesday, 47 people were charged with stealing $250 million from a federal program meant to feed hungry children during the pandemic, according to the Justice Department.
The agency claims this operation is the largest fraud involving Covid-19 ever discovered. The defendants are accused of numerous crimes, including money laundering, kickbacks, and kickback schemes.
Prosecutors allege that the defendants took advantage of the federal child nutrition program, which is meant to feed children from low-income families, by creating a network of shell corporations tied to the Minnesota-based nonprofit Feeding our Future. At the outbreak of the pandemic, Congress increased funding for the program so that more groups could take part.
According to a press statement with the Department of Justice, “Feeding Our Future personnel recruited individuals and entities to open Federal Child Nutrition Program sites throughout the state of Minnesota.” “Within days or weeks of their formation, these sites, founded and run by the defendants and others, fraudulently claimed to be providing meals to thousands of children every day.”
The Department of Justice says that Feeding Our Future knowingly submitted false claims to the Minnesota Department of Education, which controlled and administered the federal program on behalf of the state.
US Attorney for the District of Minnesota Andrew M. Luger called the scam “brazen” and “of astonishing proportions.” “Defendants here took advantage of a program meant to feed hungry kids during the COVID-19 epidemic. Instead, they put their personal greed first, using stolen federal monies to buy expensive automobiles, mansions, jewelry, and beachfront property in exotic locations.”
According to the indictment, “the firm increased the amount of government funding it received and disbursed to locations under its sponsorship from approximately $3.4 million in 2019 to nearly $200 million in 2021.” It went on to say that during the Covid-19 outbreak, “Feeding Our Future unlawfully received and dispensed more than $240 million in Federal Child Nutrition Program monies.”
Prosecutors said the offenders boasted of feeding thousands of children daily. Allegedly, the defendants kept up the charade by submitting fabricated invoices for the children’s meals and lists of fictitious identities to prove who had been fed.
Even after the Minnesota Department of Education “attempted to undertake essential monitoring regarding the number of sites and amount of claims being submitted,” it was provided “false assurances” by Feeding Our Future that it was providing the meals as promised, the DOJ says.
Prosecutors claim the defendants spent the stolen money on things like Minnesota and Kenyan real estate, Turkish real estate, expensive vehicles, jewelry, overseas trips, and more.
At a press conference on Tuesday, Luger stated that several persons had been arrested that morning, but that not all of the suspects were in the country at the time.