Ten other people have been charged in connection with a plan to steal more than $250 million from a federal program aimed at providing meals to low-income children in Minnesota, federal prosecutors said Monday.
A total of 60 people have now been charged in the conspiracy, in which authorities say a group of people took advantage of relaxed rules during the COVID-19 pandemic and falsely claimed they were providing food to children. Minnesota U.S. Attorney Andy Luger said in September the conspiracy was the largest pandemic-related fraud scheme to date.
At a news conference Monday, Luger said six people have pleaded guilty so far and more information is coming about who organized the program.
“Our investigation continues and we expect more indictments in the future,” Luger said.
At the center of the conspiracy, according to the indictment, was a Minnesota-based nonprofit called Feeding Our Future.
Prosecutors said only a fraction of the money went to feeding children, while the rest was laundered through shell companies and spent on real estate, luxury cars and travel.
The money came from the US Department of Agriculture under the supervision of the state governments. In Minnesota, the funds were managed by the state Department of Education, with meals provided to children through schools and daycares in the past. Locations serving the food were sponsored by authorized public or non-profit groups.
Some standard program requirements have been relaxed during the COVID-19 pandemic; for-profit restaurants were allowed to participate, and food was allowed to be distributed outside of educational programs.
Luger said in September that a small group of people plotted to take advantage of the relaxed rules and steal tens of millions of dollars by falsely claiming they were feeding children. Others soon joined, and the program grew, Luger said.
On Monday, Luger said the defendants allegedly operated fraudulent grocery stores across the state, including 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 city with a combined population of just 2,500. The woman received about $3.7 million from the fraudulent websites she operated, Luger said.
Luger added that federal prosecutors seized about $50 million worth of defendants’ property in September. “That number is now over $66.6 million and counting,” he said.
Republican lawmakers said Gov. Tim Walz and Attorney General Keith Ellison, both Democrats, missed opportunities to use their investigative powers to stop the fraud sooner.
The governor responded that the federal government was relaxing its rules when sending COVID-19 aid to states — “like they should have” — and that his administration alerted the FBI when it discovered the scam.
“Now it is an ongoing investigation. I think we’ll get more clarity,” Walz said in October, before he and Ellison won re-election the following month.