The Justice Department said on Tuesday that a federal grand jury had indicted 44 people on charges that they ran a brazen fraud against anti-hunger programs during the coronaviruses epidemic.
The case, in Minnesota, appears to be the largest fraud claim uncovered in any program, standing out even in a time when federal spending and oversight allowed a spree of fraud.
One of the accused conspirators told the government that he fed 5,000 children a day.
The website listofrandomnames.com was used by other defendants to create a fake list of children they could charge for food. Court papers said that others used a number-generating program to create ages for the children they were supposed to be feeding.
The accused fraudsters were able to pull in millions of dollars per week because government officials relaxed their oversight of the feeding program during the Pandemic, according to court papers.
The state of Minnesota relied on the founder of Feeding Our Future to stop fraud at feeding sites. She used her position to bring in nearly 200 new feeding operations she knew were submitting fake or inflated invoices.
Ms. Bock filed a lawsuit against the state after they raised questions about her group.
According to the indictment obtained by The Times, individuals who wanted to operate fraudulent sites under the sponsorship of Feeding Our Future had to kick back a portion of their fraudulent proceeds.
Ms. Bock was charged with wire fraud and bribe taking. Money laundered through a web of shell companies was one of the charges against other defendants.
The case is one of the most prominent to be brought by the Justice Department as it scrambles to address waves of fraud involving pandemic-era programs that sent billions of dollars of aid into the economy.
Over 30,000 investigations have been opened by the Labor Department's inspector general. Two million potentially fraudulent loan applications have been sorted by 50 agents at the small business administration. The prosecutions in Minnesota show that the Justice Department is moving aggressively on other cases.
According to the indictments, the defendants spent their money on real estate in the US, Turkey, and other countries. More than 20 cars, more than 40 properties, guns, and a Louis Vuitton duffel bag are some of the things the Justice Department wants to take away.
Many of the people indicted have said they didn't do anything wrong. Ms. Bock told The Times that she did not believe anyone in her system had broken the rules after a series of F.B.I. searches.
"If there was fraud, every test we have in place and every protection we have in place didn't catch it" I wonder if it is possible. It's absolutely true. I will hold them accountable if they get over on us.
The employee of Feeding Our Future who was indicted was accused of taking kickbacks. A grand jury indictment was not used to charge three other defendants, including one of the nonprofits employees.
After the F.B.I. served search warrants in the case, the state stopped Feeding Our Future from getting more aid money. The attorney general of Minnesota stopped the dissolution of the nonprofit. Mr. Ellison asked a judge to keep an eye on the group. It looks like that investigation is underway.
Two federal food-aid programs were targeted by participants. They were supposed to be used in summer camps. Congress rearranged the programs to reach millions of children stuck at home and changed the rules to allow families to pick up meals.
State officials no longer have to check on feeding sites in person when funding goes up.
One last line of defense was the watchdog sponsors. The nonprofits were supposed to be on guard against fraud because they were conduits for money.
10 to 15 percent of the money that flowed through them was kept by those watchdogs.
The indictments said that the money was kept flowing to increase its own cut.
According to the indictments, the defendants exploited the Covid-19 epidemic to enrich themselves.
Before the Pandemic, Feeding Our Future was a small sponsor with 3.5 million dollars in funding. Even though it had a nonprofit status, it never had an accountant on staff.
Feeding Our Future had $197 million in funding by the year 2021.
Six different groups began to operate the same fraud. The conspirators would register new companies and nonprofits and then sign them up for feeding operations.
According to the indictments, the new groups would soon report that they were feeding thousands of children per day, which would put them among the biggest feeding operations in the state. A man named Guhaad Hashi Said told the state that he was serving 5,000 meals a day at a new facility in Minneapolis.
The address on the site he listed was a second-story apartment.
According to the indictment, Mr. Said was paid over two million dollars from federal money that was routed through the state. According to the indictment, Mr. Said gave only a fraction of the meals he claimed. Mr. Said said in an interview that he had never claimed to serve 5000 meals a day.
Minnesota became concerned about the speed at which Feeding Our Future was creating new distribution sites and began giving them more scrutiny.
The nonprofit filed a lawsuit accusing state officials of discrimination. The state delayed the start of Feeding Our Future's new operations, according to the suit. Hundreds of the state's most vulnerable children are going without food on a daily basis.
The sites where the state wanted to delay operations became centers of fraud.
A state court judge ruled that Minnesota had not done enough to block the payments. After that, frustrated state officials turned to the F.B.I., and continued paying Feeding Our Future and its partners.
Kevin Burns, a spokesman for the Minnesota Department of Education, said that the state moved quickly and repeatedly raised the issue to federal authorities.
Before the indictments were made public, Republicans in the State Senate released a report accusing the state's Education Department of "dereliction of duty" for not stopping Feeding Our Future sooner.
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