47 People Charged in Largest Pandemic Fraud Case to Date
By: Chalon C. Young
Takeaway: The Biden administration underscored its promise to uncover and prosecute pandemic-related fraud this week, issuing indictments in its largest fraud case yet.
On September 20, 2022, the Department of Justice commenced its largest pandemic fraud prosecution to date, issuing indictments against 47 people for conspiring to steal $250 million from a government program meant to provide meals to children in need. This is the first major prosecution of this size under the Biden administration, which has promised to investigate pandemic fraud and bring those responsible to justice.
During the pandemic, the U.S. Department of Agriculture made exceptions to who could participate in its Federal Child Nutrition Program. This allowed restaurants and other providers to assist children in picking up meals outside of schools. According to the indictments, the nonprofit organization Feeding Our Future exploited this exception, setting up nutrition program sites in Minnesota and fraudulently claiming to serve thousands of meals a day.
Feeding Our Future is alleged to have created shell companies to register with the nutrition program and launder the money it received, which totaled over $200 million in federal funding and over $18 million in administrative fees. The organization is alleged to have created fake meal count sheets and fake attendance rosters at the fraudulent meal distribution sites. The money received by the co-conspirators was allegedly spent on luxury vehicles, travel, and real estate.
Prosecutors allege that Feeding Our Future operated a “pay-to-play scheme,” wherein people who operated fake food distribution sites were required to pay a kickback to the organization.
The scheme came to light when the Minnesota Department of Education began inquiring into the food distribution sites. Feeding Our Future allegedly gave false assurances that the sites were legitimate and were being monitored. However, when the Department continued to investigate, the organization’s founder brought a lawsuit against the Department alleging discrimination and violation of Minnesota’s Human Rights Act.
In a statement addressing the unprecedented sweeping indictments, Attorney General Merrick Garland vowed to continue investigating aggressively pandemic fraud schemes, stating that the indictments “underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it.” Garland further stated, “the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”
Read the Department of Justice’s press release here.