First seven of 70 defendants in alleged $250m Covid relief funds scam go to trial – The Guardian US

Minnesota

Prosecutors say the seven stole more than $40m from a program meant to provide meals to children in Minnesota

Associated Press

Mon 29 Apr 2024 09.06 EDT

Opening statements are expected on Monday in the fraud trial of seven people charged in what federal prosecutors have called a massive scheme to exploit lax rules during the Covid-19 pandemic and steal from a program meant to provide meals to children in Minnesota.

The seven will be the first of 70 defendants to go on trial in the alleged scam. Eighteen others have already pleaded guilty.

Prosecutors have said the seven collectively stole more than $40m in a conspiracy that cost taxpayers $250m one of the largest pandemic-related fraud cases in the country. Federal authorities say they have recovered about $50m.

Prosecutors say just a fraction of the money went to feed low-income kids and that the rest was spent on luxury cars, jewelry, travel and property.

The food aid came from the US Department of Agriculture and was administered by the state department of education. Non-profits and other partners under the program were supposed to serve meals to kids.

Two of the groups involved, Feeding Our Future and Partners in Nutrition, were small non-profits before the pandemic; but in 2021, they disbursed around $200m each. Prosecutors allege they produced invoices for meals that were never served, ran shell companies, laundered money, indulged in passport fraud and accepted kickbacks.

An Associated Press analysis published last June documented how thieves across the country plundered billions in federal Covid-19 relief dollars in the biggest grift in US history. The money was meant to fight the worst pandemic in a century and stabilize an economy in freefall.

But the AP found that fraudsters potentially stole more than $280bn, while another $123bn was wasted or misspent. Combined, the loss represented 10% of the $4.3tn the government disbursed in Covid relief by last fall. Nearly 3,200 defendants have been charged, according to the US justice department. About $1.4bn in stolen pandemic aid has been seized.

The defendants going on trial on Monday before the US district judge Nancy Brasel in Minneapolis are Abdiaziz Shafii Farah; Mohamed Jama Ismail; Abdimajid Mohamed Nur; Said Shafii Farah; Abdiwahab Maalim Aftin; Mukhtar Mohamed Shariff; and Hayat Mohamed Nur. They have all pleaded not guilty. Their trial is expected to last about six weeks.

The defendants fraud, like an aggressive cancer, spread and grew, prosecutors wrote in a summary of their case.

Prosecutors say many of the purported feeding sites were nothing more than parking lots and derelict commercial spaces. Others turned out to be city parks, apartment complexes and community centers.

By the time the defendants scheme was exposed in early 2022, they collectively claimed to have served over 18m meals from 50 unique locations for which they fraudulently sought reimbursement of $49m from the Federal Child Nutrition Program, prosecutors wrote.

Among the defendants awaiting trial is Aimee Bock, the founder of Feeding our Future. She is one of 14 defendants expected to face trial together at a later date. Bock has maintained her innocence, saying she never stole and saw no evidence of fraud among her subcontractors.

The scandal stirred up the 2022 legislative session and campaign in Minnesota.

Republicans attacked the governor, Tim Walz, saying he should have stopped the fraud earlier. But Walz pushed back, saying the states hands were tied by a court order in a lawsuit by Feeding Our Future to resume payments despite its concerns. He said the FBI asked the state to continue the payments while the investigation continued.

The Minnesota education department now has an independent inspector general who is better empowered to investigate fraud and waste.

{{topLeft}}

{{bottomLeft}}

{{topRight}}

{{bottomRight}}

{{.}}

One-timeMonthlyAnnual

Other

Link:

First seven of 70 defendants in alleged $250m Covid relief funds scam go to trial - The Guardian US