Ten more people have been charged in connection with a scheme to steal more than US$250 million from a federal program designed to provide meals to low-income children in Minnesota, US federal prosecutors said on Monday.
A total of 60 people have now been charged in the conspiracy, in which authorities say a group took advantage of rules that were relaxed during the COVID-19 pandemic and falsely claimed that they were providing food to children.
Minnesota US Attorney Andy Luger in September last year said that the conspiracy was the largest pandemic-related fraud scheme to date.
Photo: AP
At a news conference on Monday, Luger said that six people have pleaded guilty so far and more information is coming about who organized the scheme.
“Our investigation continues, and we expect more charges in the future,” Luger said.
At the center of the plot was a Minnesota nonprofit called Feeding Our Future, the indictments say.
Just a fraction of the money went toward feeding kids, with the rest laundered through shell companies and spent on property, luxury vehicles and travel, prosecutors said.
The money came from the US Department of Agriculture, with oversight from state governments. In Minnesota, the funds were administered by the Minnesota Department of Education, with meals historically provided to kids through schools and daycare centers.
Sites that served the food were sponsored by authorized public or nonprofit groups.
Some standard program requirements were relaxed during the COVID-19 pandemic. For-profit restaurants were allowed to participate and food was allowed to be distributed outside educational programs.
Luger said in last year that a small group of people came up with the plan to exploit the relaxed rules and steal tens of millions of dollars by falsely claiming they were providing food to children.
Others soon joined, and the scheme grew, Luger said.
On Monday, Luger said that the defendants allegedly operated fraudulent food sites across the state, including in Pelican Rapids, Faribault, Burnsville, Minnetonka, Bloomington, Minneapolis and St Paul.
He highlighted an indictment against a woman who claimed to serve 2,560 meals a day to children in Pelican Rapids, a town with a total population of only 2,500 people.
The woman obtained about US$3.7 million from the fraudulent sites she operated, Luger said.
Federal prosecutors in September last year had seized about US$50 million worth of property fraudulently obtained by the defendants, he said.
“That number is over [US]$66.6 million now and climbing,” he said.
Lawmakers have said that Minnesota Governor Tim Walz and Minnesota Attorney-General Keith Ellison missed opportunities to use their investigative powers to stop the fraud earlier.
The governor said that the federal government relaxed its rules when it sent COVID-19 aid to the states — “as they should have” — and that his administration alerted the FBI when it discovered the fraud.
“Now it’s an ongoing investigation. I guess we’ll get more clarity,” Walz said in October last year.
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