DOJ Charges 47 In Massive $250 Million Pandemic Fraud

The Department of Justice on Tuesday announced that 47 individuals are charged in a sweeping $250 million scheme to steal from a federal program to feed at-risk children during the COVID-19 pandemic.

The DOJ said the dozens of defendants face charges of conspiracy, wire fraud, money laundering, and bribery in an operation based in Minnesota that it called “the largest COVID-19 fraud scheme in the nation.”

According to the agency, the defendants worked to defraud the Federal Child Nutrition Program when they “obtained, misappropriated, and laundered millions of dollars in program funds.” This money was earmarked to reimburse costs for feeding needy children during the pandemic.

Prosecutors say the funds were instead misappropriated to enrich the defendants with hundreds of millions of dollars.

To stave off hunger during the height of the pandemic, the USDA set aside some of the normal requirements for participation in the program. The agency allowed retail restaurants to participate and permitted off-site distribution of food apart from educational settings.

The DOJ reports the defendants set up shell companies connected to a Minnesota-based nonprofit called Feeding our Future to take advantage of the federal program.

Feeding our Future, the DOJ alleges, recruited people and businesses to implement Federal Child Nutrition Program sites across Minnesota. Within a few weeks of being organized, these sites claimed to be feeding thousands of children daily.

Fraudulent claims, prosecutors say, were submitted to the Minnesota Department of Education. This body was in charge of administering the federal program within the state.

U.S. Attorney Andrew M. Luger of the District of Minnesota said the defendants diverted the funds to “their own greed.” The money was used for everything from homes, luxury cars, and jewelry to buying beachfront property abroad.

Prosecutors say that some of the defendants have turned themselves in to authorities or been arrested, though many have fled the country.

Feeding our Future moved from disbursing roughly 3.4 million in federal dollars in 2019 to almost $200 million in 2021. The indictment said the entity “fraudulently obtained and disbursed more than $240 million” in federal funds intended for needy children.