Investigators probe alleged fraud involving over $240 million in federal child nutrition dollars
A Minnesota nonprofit was paid to feed thousands of hungry children every day during the pandemic. Federal investigators allege that the meals never materialized.
In the early months of the pandemic, the Department of Agriculture (USDA) acted quickly to loosen rules governing how child nutrition programs had to operate. Gone were the strict nutrition guidelines, the group dining requirements, and the in-person inspections. Instead, the agency focused on cutting red tape as part of a broad effort to keep snacks and meals accessible to hungry families while mitigating the spread of Covid-19.
Now, the Federal Bureau of Investigation (FBI) is alleging that a handful of players took advantage of this newfound regulatory freedom by establishing fraudulent food distribution sites and bilking the federal government out of millions in child nutrition dollars.
In a search warrant application unsealed last week, the FBI detailed an ongoing investigation into a sprawling network of nonprofits and businesses based in Minnesota. In the application, investigators alleged that the entities collaborated to defraud USDA through two child nutrition programs: the Child and Adult Care Food Program (CACFP), which pays for meals served at daycare centers, after-school programs, and homeless shelters; and the Summer Food Service Program (SFSP), which pays for meals served to kids during the summer.
At the heart of the investigation is an organization called Feeding Our Future, a nonprofit first incorporated in 2016. Since 2018, Feeding Our Future has worked as a program sponsor, which is an intermediary role between USDA and the entities that actually provide food to kids. Sponsors help set up meal distribution sites in communities, often by coordinating with local food preparation companies and community centers or summer camps, and help enroll these sites into CACFP or SFSP. It also assists them in collecting USDA payments for meals, and ensuring that participants are following all CACFP’s rules. In turn, sponsors get a cut of each reimbursement to support their work.
This isn’t the first time that a food contractor has been subjected to scrutiny over potential self-dealing during the pandemic.
In the case of Feeding Our Future, investigators alleged that the organization enrolled fraudulent food service providers and forged documentation to claim reimbursement for meals that didn’t exist, in an effort to boost its own bottom line.
Kenneth Udoibok, attorney for Aimee Bock, the founder and executive director of Feeding Our Future denied any accusation of wrongdoing against Bock and Feeding Our Future. In a phone interview, he provided the following comment: “Ms. Bock has not been charged with any offense. I believe that at the conclusion of the investigation, the government will realize that all Ms. Bock did was feed children.”
Investigators said that according to a review of bank records, those involved in the alleged arrangement laundered federal nutrition funds through multiple pass-through companies and used the money to purchase property, cars, and travel.
“The companies and their owners received tens of millions of dollars in federal funds for use in providing nutrition meals to underprivileged children and adults,” wrote the agent who filed the search warrant application. After its approval, FBI raided Feeding Our Future’s offices last Thursday. “Almost none of this was used to feed children.”
In 2019, the organization handled $3.4 million in federal nutrition funds; in 2020, that value was $42 million; in 2021, it reached $200 million.
Feeding Our Future first raised eyebrows in the fall of 2020, when the Minnesota Department of Education, which administers federal nutrition programs at the state level, terminated a handful of its sites, and put a pause on new applications over concerns about its auditing and bookkeeping processes. In response, Feeding Our Future sued the agency, and accused it of denying “thousands of qualified children in low-income and minority communities” much-needed food. The education agency resumed processing applications after a judge’s order, but not before reaching out to federal investigators about its suspicions of potential fraud.
Among the red flags, according to court documents, was an exponential increase in the amount of money involved with Feeding Our Future’s programs over the course of the pandemic. In 2019, the organization handled $3.4 million in federal nutrition funds; in 2020, that value was $42 million; in 2021, it reached $200 million.
In a screenshot of Feeding Our Future’s reimbursement claim for one feeding site last November, the organization claimed that it fed an average of 1,900 kids per day across 31 days, for a total of nearly 60,000 children. (There are only 30 days in November.) But according to investigators, a camera they had placed to monitor the site in November and December recorded little activity, such as food deliveries or meal pickups.
This isn’t the first time that a food contractor has been subjected to scrutiny over potential self-dealing during the pandemic. Late last year, a congressional report found that a supplier participating in USDA’s Covid-19 food box program appeared to have received millions of dollars in reimbursements for deliveries that were not verified. It’s also not the first time federal investigators have accused CACFP sponsors of defrauding the program: Last September, agents accused a Texas organization of similarly collecting reimbursements for meals that didn’t exist.
In response to last week’s raid, state legislators have called for increased auditing of Covid-19 relief programs administered in Minnesota. The federal investigation is still ongoing.