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The Covid Money Trail


U.S. CHARGES ‘BRAZEN’ THEFT OF $250 MILLION FROM PANDEMIC FOOD PROGRAM


DEFENDANTS ALLEGEDLY FAKED CHILDREN’S NAMES AND RANDOMLY GENERATED AGES TO CLAIM
THEY HAD SERVED MEALS TO THOSE IN NEED

By Tony Romm
Updated September 20, 2022 at 3:36 p.m. EDT|Published September 20, 2022 at
12:00 p.m. EDT

Attorney General Merrick Garland speaks at a naturalization ceremony in New York
on Saturday. The Justice Department announced charges Tuesday in connection with
what prosecutors say was $250 million in fraud targeting a pandemic food aid
program. (Eduardo Munoz/Reuters)
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The Justice Department charged 47 defendants Tuesday for allegedly defrauding a
federal program that provided food for needy children during the pandemic,
describing the scheme — totaling nearly $250 million — as the largest uncovered
to date targeting trillions in government aid.


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Federal prosecutors said the defendants — a network of individuals and
organizations tied to Feeding Our Future, a nonprofit operating in Minnesota —
in some cases obtained federal pandemic funds in the names of children who did
not exist and then spent that money on luxury cars, houses and other personal
purchases.



To bilk the government, the Justice Department said, the defendants relied on a
complex web of shell companies and bribes. One participant allegedly created a
list of fake children to whom it had supposedly served meals, populated with
names generated from the website “listofrandomnames.com.” Others fabricated
spreadsheets with invented ages or faked their invoices, all in pursuit of
federal cash, the government charged.

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Once they had that money in hand, some of the defendants bought “houses in
Minnesota, resort property and real estate in Kenya and Turkey, luxury cars,
commercial property, jewelry, and much more,” according to Andrew M. Luger, the
U.S. attorney for the district of Minnesota, who briefed reporters on the case
Tuesday.

The extent of the scheme, which siphoned away money meant for hungry children,
led the Justice Department repeatedly to describe the theft as “brazen.” The
acknowledgment underscored the immense challenge that federal prosecutors face
to keep watch over the spending approved since the start of the pandemic — all
while pursuing criminals who have treated the aid as a potential windfall.

“These indictments, alleging the largest pandemic relief fraud scheme charged to
date, underscore the Department of Justice’s sustained commitment to combating
pandemic fraud and holding accountable those who perpetrate it,” Attorney
General Merrick Garland said in a statement.

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Feeding Our Future could not be reached for comment. A call to a phone number
listed on its website could not be completed, and a lawyer representing the
organization in related litigation did not immediately respond to a request for
comment. Aimee Bock, the nonprofit’s founder and executive director, previously
has denied wrongdoing.

The federal food aid is a critical part of the roughly $5 trillion in emergency
spending that Congress has adopted since 2020. The money helped rescue the
economy from the worst crisis since the Great Depression, putting shots in
millions of Americans’ arms while helping workers find jobs and businesses stay
afloat. But the money also opened the door to billions of dollars in waste,
fraud and abuse, the extent of which is only beginning to come to light. The
Washington Post is exploring the problem in a year-long investigation called The
Covid Money Trail.

Targeting unemployment insurance, sophisticated criminals repeatedly stole the
identities of innocent Americans, potentially draining much-needed jobless aid
by more than $160 billion. Similar schemes targeted roughly $1 trillion in aid
administered by the Small Business Administration, which provided loans and
grants to businesses that did not exist, should not have qualified for help or
appeared to operate abroad.

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In other cases, inadequate federal oversight and lax program rules led to
trouble. Many Republican-led states, for example, have tried to put their
allotments under a $350 billion aid program toward political pet projects, such
as tax cuts and immigration crackdowns. Still another federal initiative to
retrain veterans saw only 397 find new jobs, a far cry from what lawmakers
hoped.


The Covid Money Trail

It was the largest burst of emergency spending in U.S. history: Two years, six
laws and more than $5 trillion intended to break the deadly grip of the
coronavirus pandemic. The money spared the U.S. economy from ruin and put
vaccines into millions of arms, but it also invited unprecedented levels of
fraud, abuse and opportunism.

In a yearlong investigation, The Washington Post is following the covid money
trail to figure out what happened to all that cash.

Read more

The scheme alleged by the Justice Department on Tuesday centered on the Federal
Child Nutrition Program, administered by the Agriculture Department to provide
free meals to children in lower-income families. The program essentially
operates as a vast ring of networks: Nonprofits and other organizations provide
meals or contract with vendors to do so, and they are reimbursed by states,
using money from the federal government.

In response to the pandemic, the U.S. government made it easier for a larger set
of providers to participate in the child nutrition program — and for those
entities to supply meals at a wider array of locations. The tweaks aimed to help
more families access food, particularly when schools had shuttered and couldn’t
provide free or reduced-price breakfast and lunch as usual.

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But the changes to federal law also may have paved the way for rampant abuse.
With Feeding Our Future, prosecutors said, the organization served as a
middleman. As a “sponsor,” it submitted applications for new meal delivery sites
to the state of Minnesota for participation in the federal program. It then
oversaw meal distribution, sent the state claims for reimbursement and remitted
the federal funds back to its partners, according to the Justice Department. The
nonprofit also collected administrative fees from the payments.

Prosecutors allege that from that powerful perch, the nonprofit’s leader, Bock,
ultimately “oversaw a massive scheme to defraud carried out by sites under its
sponsorship” — one allegedly spanning dozens of individuals, some in her employ,
and shell companies operating throughout the state. In total, Feeding Our Future
opened more than 250 sites in Minnesota, according to the government.

One of the entities her organization sponsored, known as ASA Limited, repeatedly
submitted falsified records about the number of children it provided with free
meals, according to the government. In September 2021, for example, one of the
defendants tied to the firm allegedly populated a spreadsheet with a formula
that generated a random number between 7 and 17 in the age column for thousands
of children.

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“Bock and Feeding Our Future knew [the state’s] concerns were valid, and that
little of the Federal Child Nutrition Program funds disbursed by Feeding Our
Future were used to feed children,” the Justice Department alleged.

In these and dozens of other instances, federal prosecutors said, Bock failed to
conduct proper oversight or lied about it — and then sought to deflect
government regulators who tried to keep close watch over her.

Minnesota state officials began investigating Feeding Our Future in 2020, after
officials began to register concerns with the large number of meals that its
sponsored sites had claimed to deliver. But an earlier attempt to deny payments
to the organization ultimately failed, allowing its network to continue
receiving federal aid.

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Facing new scrutiny, Bock at one point filed a lawsuit against the Minnesota
Department of Education, which oversees the state’s implementation of the meal
program, accusing it of “racial animus.” The FBI, for its part, conducted
several raids in January.

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On Tuesday, federal law enforcement officials stressed that they are continuing
to probe the alleged fraud in Minnesota and other attempts to bilk money from a
program meant to help hungry children.

“The defendants went to great lengths to exploit a program designed to feed
underserved children in Minnesota amidst the COVID-19 pandemic, fraudulently
diverting millions of dollars designated for the program for their own personal
gain,” FBI Director Christopher A. Wray said in a statement.

GiftOutline
Gift Article
Latest from The Covid Money Trail
HAND CURATED
 * U.S. sent $1.3 billion in small business covid aid abroad, raising new fraud
   fears
   September 12, 2022
 * Thousands allegedly bilked U.S. for free internet — in one child’s name
   September 8, 2022
 * How federal covid aid trickled down to Xavier’s classroom
   September 8, 2022

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