A Minnesota nonprofit linked to $250 million fraud scheme was just raided by the Feds — the FBI believes its records claiming it fed 1 million children ‘are phony.’ How the scam worked

How meal program fraud works

In March, a jury found Aimee Bock, founder and executive director of Feeding Our Future, guilty on all counts of fraud. She’s considered the ringleader of an elaborate scheme that stole $250 million from the federal child nutrition program in 2021, during the height of the pandemic.

While Bock is in jail awaiting sentencing, 47 suspects “have been indicted for defrauding a federally funded child nutrition program,” according to the FBI.

The scam was executed by claiming to serve more meals to children in need than was the case. Like other organizations taking part in the scam, “NVF allegedly submitted fraudulent reimbursement requests to the Minnesota Department of Education for meals that it never served,” according to MPR News.

During the trial, it came to light that Feeding Our Future paid NVF more than $2.5 million in 2021. While NVF claimed to serve more than 1 million meals to children in need over an eight-month period in 2021, “the FBI believes meal count sheets, claiming to feed more than 3,000 kids two meals every day, are phony,” according to KARE 11.

There were several red flags. For example, workers at a neighboring nonprofit called Repowered (which provides electronics recycling jobs to people recently released from jail), “told law enforcement that they never saw any children at New Vision Foundation — either being served meals or otherwise,” according to the search warrant written by FBI Special Agent Travis Wilmer.

And, since Repowered has registered sex offenders on staff, “children could not be present at New Vision Foundation.”

NVF invoices claim the food was purchased from a food service company in Eden Prairie. But, according to the search warrant, the address on the invoices led to an apartment complex rather than a food warehouse for produce, dairy products and rice (as the invoices claimed).

In addition, public tax filings show that NVF reported five times the amount of “gifts and grants” in 2021 as it did in 2020 or 2022.

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The broader economic implications of fraud

While this was an exceptional case, it’s not the first nor the only case — highlighting what can go wrong with programs intended to help those in need without proper oversight and governance.

A scathing report from the Office of the Legislative Auditor found that the Minnesota Department of Education’s “actions and inactions created opportunities for fraud.”

To mitigate risks, the report recommends better oversight for reviewing and approving sponsor applications, as well as conducting monitoring visits and compliance reviews.

Fraud wastes money and diverts resources from those who actually need it — in this case, thousands of children who never received meals and snacks during the height of the pandemic. It also has broader social impacts, such as eroding trust in government programs.

This is particularly urgent right now, as America’s “crisis of public trust in government is growing,” according to a national survey conducted by the Partnership for Public Service. The survey found that only 23% of Americans trust the federal government and just 29% believe that democracy is working in the U.S. today.

The federal government loses between $233 billion and $521 billion annually to fraud, according to the U.S. Government Accountability Office (GAO).

In the case of Feeding Our Future, the FBI and law enforcement partners have “been able to recover $50 million from 60 bank accounts, 45 pieces of property, and numerous vehicles and additional items, such as electronics and high-end clothing,” according to the FBI and “additional seizures are expected.”

When it comes to detecting and rooting out fraud, advanced technologies could help.

For example, the U.S. Department of Agriculture’s (USDA) is targeting fraud in its Farm and Food Workers Relief Program in a variety of ways, including a centralized risk and fraud analysis tool, document verification technology to detect alterations and predictive analytics that analyze deviations from expected patterns. It also monitors social media and the dark web.

Concerned citizens can learn more about common fraud schemes on GAO’s Antifraud Resource or they can report fraud, waste, abuse or mismanagement of federal funds to FraudNet.