Pandemic fraud scheme

Their goal was to make as much money as they could while falsely claiming to feed children during the pandemic.

U.S. attorney for Minnesota Andrew Luger. Federal authorities charged more than 45 people in Minnesota for allegedly stealing nearly $250 million from a federal program intended to provide meals for low-income children during the pandemic.

Why It Matters: The U.S. Department of Justice is prosecuting pandemic-related fraud. They have identified more than 1,000 criminal cases that add up to more than $1 billion in money taken from the government intended for pandemic-related programs. U.S. authorities in Minnesota prosecuted what is now considered the “largest pandemic-related fraud scheme yet.”

• The Scheme: Prosecutors say a “network of individuals and organizations” were connected to one nonprofit — Feeding Our Future — which sponsored locations claiming to help feed children as part of a federal nutrition program. Nearly $250 million was reimbursed to defendants in this case through the federal program during 2020 and 2021, though few meals were actually served, according to federal prosecutors.
• How: Those prosecuted in the Minnesota case targeted USDA’s Federal Child Nutrition Program that is intended to provide food to low-income individuals. The program shifted during the pandemic, dropping “some of the standard requirements for participation“ in the program, including allowing for-profit restaurants to serve meals and apply for relief. Thus the scheme by Feeding our Future focused on opening up new branches of their “organization” to provide food for low-income children, prosecutors say.
• The Outcome: More than 45 individuals face multiple counts such as conspiracy, money laundering and bribery, and wire fraud.

From The Associated Press:

One example described a small storefront restaurant in Willmar, in 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, then billed the government for some 1.6 million meals through 11 months of 2021, according to one indictment. They listed the names of around 2,000 children — nearly half of the local school district’s total enrollment — and only 33 names matched actual students, the indictment said.

U.S. Attorney Announces Federal Charges Against 47 Defendants in $250 Million Feeding Our Future Fraud Scheme (The United States Department of Justice)