Pandemic fraud exhibit A: Feeding Our Families in Minneapolis
In his State of the Union Address, President Joe Biden promised to crack down on organizations that fraudulently took pandemic relief. This is just one example.
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A Minneapolis nonprofit organization that is the focus of a major FBI fraud investigation involving federal meal programs announced last month that it has ended operations.
The investigation was first reported by The New York Times.
Feeding Our Future executive director Aimee Bock set up the nonprofit in 2016 to provide meals to low-income children through partner organizations.
Fraud Investigation in Food Aid Puts Focus on Role of Nonprofits https://t.co/ZsnnoN2rzi— turenne19 (@turenne19) March 8, 2022
Minnesota officials said that after they suspected Feeding Our Future they had been constrained from stopping it, & the state paid >$197 million after the first suspicions were raised.
According to search warrant affidavits uncovered last month, the FBI alleged that a network of individuals connected to Feeding Our Future took advantage of less restrictive rules during the pandemic and used a web of shell companies to conceal and misappropriate tens of millions of dollars.
This money was allegedly spent on vehicles, travel, and real estate, including commercial buildings on Lake Street in Minneapolis, and a luxury apartment in Nairobi, Kenya.
According to the warrants, Feeding Our Future received about $307,000 from federal child nutrition programs in 2018, and nearly $3.5 million the following year. By 2021, that figure rose to nearly $198 million.
This rapid growth grabbed the attention of officials at the Minnesota Department of Education, which supervises the distribution of federal funds.
The state agency reached out to the FBI early last year and informed investigators that certain sites were submitting fraudulent documents to receive reimbursements as well as “artificially inflating the number of children and low-income individuals receiving benefits.”
Federal nutrition fraud allegations against a Minnesota organization are now spurring scrutiny of the state Attorney General's Office and its role overseeing nonprofits. https://t.co/PtRIghvYC3— Star Tribune (@StarTribune) March 5, 2022
Last year, as the federal government made available huge new sums of money for programs to feed children during the pandemic, a nonprofit called Advance Youth Athletic Development established an enormous childcare operation in northeast Minneapolis that could prepare 5,000 dinners every weeknight.
Based on the group’s claims, Minnesota gave $3.2 million of the federal food aid to the program.
But in January, the FBI carried out a series of pre-dawn raids around the region, and began investigating Advance Youth Athletic Development, and other groups like it, including Feeding Our Future, which is responsible for ensuring that the money provided to the smaller groups was spent properly.
Officials discovered a “massive fraud scheme” among groups that Feeding Our Future was in charge of overseeing, stating that the group siphoned off tens of millions of dollars by charging taxpayers for nonexistent meals.
Together, the F.B.I. said, these 15 groups — all of which were supposed to be overseen by Feeding Our Future — had received more than $65 million from federal food programs during the coronavirus pandemic.
“Almost none of this money was used to feed children. Instead, conspirators misappropriated the money and used it to purchase real estate, cars and other items,” the government wrote in one court filing.
When a reporter recently visited the address listed for Advance Youth Athletic Development, there was no sign of a kitchen or a large child care center. It was just a second-story apartment.
In MN, a nonprofit told the state it was running a huge child-care center that could feed 5,000 kids a day.— David Fahrenthold (@Fahrenthold) March 8, 2022
The state paid it $3.2M, but didn’t visit to see it. Another nonprofit was supposed to do that.
I visited. It’s a second-story apartment. https://t.co/vDtAx97pnj
Lul Mohamoud, a neighbor in the apartment across the hall, confidently told the reporter that she had never seen any kids going inside.
No one has yet been charged in the case, and the leaders of Feeding Our Future, Advance Youth Athletic Development and other groups have denied wrongdoing.
But the case has underscored how the government’s dependence on nonprofits to carry out a wide range of programs can increase vulnerability to fraud.
In his State of the Union address last week, President Biden said that “billions” in pandemic aid had been stolen, and that he plans to name a chief prosecutor for pandemic fraud.
"Anyone who participated in this scheme must be held accountable. It's shameful that children who struggle with food insecurity paid the price for this nonprofit's alleged actions,” said Rep. Ilhan Omar, whose district includes Feeding Our Future's headquarters.