Feds: 48 charged in 'brazen' $250M COVID spending fraud centered in Minnesota
Updated 10 p.m.
Federal authorities on Tuesday charged 48 people in what they described as the country’s largest COVID-19 funding scam, alleging an elaborate Minnesota-based operation stole at least $250 million in federal funds meant to feed needy children but that went instead to buy cars, luxury goods, jewelry and property in the United States, Kenya and Turkey.
The alleged scheme was centered around Feeding Our Future, a Minnesota nonprofit that prosecutors say was a conduit for illegal payments and whose leaders received kickbacks. Charges include conspiracy, wire fraud, money laundering and bribery.
“These individuals believed they could steal tens of millions of dollars from federal nutrition programs,” U.S. Attorney for Minnesota Andrew Luger told reporters. “Their goal was to make as much money for themselves as they could while falsely claiming to feed children in the pandemic.”
He called it a “brazen scheme of staggering proportions” that faked some 125 million meals.
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Luger said the work involved creating false rosters of children, sometimes with the use of an online website that generated random names. Entities around the state would then be paid for meals they never served to children who didn’t exist.
In some cases, he said, groups were claiming to feed children in numbers beyond belief.
In the west-central Minnesota town of Willmar, for instance, a newly created organization claimed to be feeding 2,000 children daily — about half of all the eligible children in Willmar schools. Yet only about 1 percent of the children listed as served matched actual students, Luger said.
Feeding Our Future executive director Aimee Bock, he added, was at the center of the alleged scam, which was uncovered by the Minnesota Department of Education, the state agency that oversees federal child nutrition spending.
After MDE began denying Feeding Our Future site applications, Bock filed a lawsuit accusing the agency of discrimination.
The indictments charge Bock with “overseeing a massive fraud scheme” carried out across more than 200 Minnesota sites under Feeding Our Future’s sponsorship. “Feeding Our Future went from receiving and disbursing approximately $3.4 million in federal funds in 2019 to nearly $200 million in 2021,” the Justice Department said.
Bock later pleaded not guilty to the charges against her and was not ordered detained.
In a statement, Bock's attorney Kenneth Udoibok said: "An indictment does not signify guilty or innocence. It’s the beginning of the criminal process. I’m surprised that Ms. Bock has been indicted because she did nothing worthy of a criminal indictment."
Feeding Our Future shut down in February after search warrants became public and gave light to the investigation.
Luger said three of the people charged in the indictments announced Tuesday are expected to plead guilty. The U.S. Attorney’s office announced 47 indictments, but then confirmed a 48th person was charged late Tuesday.
Overall, authorities have seized about $50 million in assets related to the alleged crimes, including property, bank accounts, vehicles, jewelry and other items, Luger noted, adding that “we expect that number to grow.”
The online publication Sahan Journal reported that some of the people charged in the alleged scam have notable political and business connections, including Abdi Salah, former senior policy aide to Minneapolis Mayor Jacob Frey, and Sharmarke Issa, former board chair of the Minneapolis Public Housing Authority.