The US Attorney’s Office in Minnesota on Tuesday announced criminal charges against 47 people allegedly participating in a $250 million scheme to exploit the Federal Child Nutrition Program during the COVID-19 pandemic.
US Attorney Andrew Luger called it “a brazen scheme of astounding proportions” and the largest pandemic aid scam uncovered to date.
“These defendants took advantage of a program aimed at providing nutritious food to children in need during the COVID-19 pandemic,” he said. “Instead, they put their own greed first and stole more than a quarter billion dollars in federal funds to buy luxury cars, homes, jewelry and seaside resorts abroad.”
Attorney General Merrick Garland released a statement saying the Justice Department will continue to bring justice to people who have exploited the pandemic for personal gain and stolen from taxpayers.
In six separate indictments, 47 people were charged with conspiracy, wire fraud, money laundering and bribery. Prosecutors allege they misappropriated and laundered millions of dollars in federal funds intended to feed hungry children, taking advantage of changes made during the pandemic, such as
Luger said the defendants used the money to buy luxury vehicles, residential and commercial properties in Minnesota, Ohio and Kentucky, real estate in Kenya and Turkey, and to fund international travel.
Luger said the defendants quickly set up the system in April 2020 and “stole money at breakneck speed.” They set up websites and claimed they were serving thousands of meals, seven days a week, within days to weeks of launch.
He said you couldn’t make much money working “legally” on the program and the defendants mostly kept the money for themselves, spending little on food and logistics.
“They were running a program, not a child feeding program,” he said.
Among them: Safari Restaurant, which signed up for the Feeding Our Future program and opened additional locations and dozens of shell companies across the country, then claimed to have served millions of meals for which it received over $32 million, prosecutors say , which used to be the case to buy vehicles, real estate and travel.
The indictment alleges that Empire Cuisine and Market LLC served millions of meals and received over $40 million to use on vehicles, travel, real estate and property in Kenya.
Administered by the US Department of Agriculture, the program provided free meals to needy children by distributing federal funds to state governments. In Minnesota, federal funds were managed and overseen by the Minnesota Department of Education.
MDE provided funds to sponsorship agencies such as the non-profit organization Feeding Our Future, which in turn distributed the funds to various grocers across the state. Feeding Our Future was supposed to monitor that the funds were used appropriately, but has helped dozens of people cheat the program, according to prosecutors.
Luger said the defendants quickly set up the system in April 2020 and “stole money at breakneck speed.” They set up websites and claimed they were serving thousands of meals, seven days a week, within days to weeks of launch.
He said you couldn’t make much money working “legally” on the program and the defendants mostly kept the money for themselves, spending little on food and logistics.
“They were running a program, not a child feeding program,” he said.
MDE officials questioned the legitimacy of the large payments and halted funding for Feeding Our Future. However, a judge ordered the agency to resume payments after Feeding Our Future filed a lawsuit alleging racial discrimination against its predominantly East African clientele.
When asked if MDE deserved any blame for the massive scam, Luger said that everyone is pointing the finger at a large-scale scam, but he blames the defendants who perpetrated and covered up the scheme.
Prosecutors allege Feeding Our Future opened more than 250 locations statewide and fraudulently disbursed more than $240 million in Federal Child Nutrition Program funds. Feeding Our Future grew from disbursing about $3.4 million in federal funds in 2019 to nearly $200 million in 2021.
Sponsoring agencies withheld 10% to 15% of meal reimbursements, and prosecutors charged Aimee Bock, founder and CEO of Feeding Our Future, with overseeing the massive program run by websites under their auspices.
Prosecutors say Feeding our Future employees recruited staff to open locations across the country that falsely claimed to be serving meals to thousands of children a day within days to weeks of setting up.
Feeding our Future has pocketed more than $18 million in fees and received bribes and kickbacks – disguised as consulting fees to shell companies – from people who sponsored them, prosecutors say.
Prosecutors say dozens of shell companies have signed up for the scheme to enroll in the scheme and receive and launder their proceeds. Fake children’s names have been invented, some using a website accessed www.listofrandomnames.com, Said Luger.
Other companies in the indictment include:
- S&S Catering Inc., which received over $18 million and spent part of it on vehicles and real estate.
- Haji’s Kitchen LLC raised more than $25 million and used some of it for vehicles, real estate, and travel.
- The owner of Community Enhancement Services Inc. and other co-conspirators opened multiple locations and shell companies at the JigJiga Business Center in Minneapolis and received more than $1.6 million, some of which was spent on vehicles, real estate and beachfront properties in Kenya.
- Brava Restaurant & Cafe LLC in Rochester claimed to serve millions of meals and falsely claimed to have a contract with Rochester Public Schools that received about $4.3 million, some of which was for vehicles, real estate and land on the Mediterranean coast of Turkey.
Luger said three of the 47 defendants have agreed to waive their rights and admit their role in the system.
