A Minnesota agency’s inadequate oversight of a federal food aid program led to the theft of $250 million in one of the country’s largest pandemic aid fraud cases, the legislature’s watchdog said in a report.

The Minnesota Department of Education oversees two federally funded nutrition programs that experienced fraudulent activities during the COVID-19 pandemic. 

Taxpayer funds intended for supporting these programs, which offer reimbursements for meals served at participating child care centers, summer camps, and other locations, were allegedly used instead for the personal gain of 70 people, according to the report.

This scheme centered on a Minnesota-based nonprofit organization called Feeding Our Future. 

Those 70 people facing federal charges are accused of various activities, including producing false meal invoices, operating shell companies, laundering money, committing passport fraud, and accepting kickbacks.

Last Friday, five of the initial seven defendants were convicted. Eighteen other defendants have pleaded guilty, but trials are pending for the rest.

One of the defendants awaiting trial is Aimee Bock, founder of the nonprofit organization, who has maintained her innocence, denying any involvement in the theft and asserting she saw no evidence of fraud among her subcontractors.

FBI agents raided the home of a Feeding Our Future defendant after an attempted $120,000 cash bribe of a juror.

The Minnesota Department of Education “failed to act on warning signs known to the department prior to the onset of the COVID-19 pandemic and prior to the start of the alleged fraud,” the Office of the Legislative Auditor wrote in the report.

The MDE “did not effectively exercise its authority to hold Feeding Our Future accountable to program requirements” and “was ill-prepared to respond to the issues it encountered with Feeding Our Future,” the report concluded.  

Education Commissioner Willie L. Jett II objected to the auditor’s characterization of his agency’s oversight as inadequate. 

“MDE’s oversight of these programs met applicable standards and MDE made effective referrals to law enforcement,” Jett wrote in his response. “The responsibility for this flagrant fraud lies with the indicted and convicted fraudsters.”

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From the $250 million in federal funds taken, only about $50 million has been recovered. 

The food assistance comes from the U.S. Department of Agriculture. Minnesota’s Department of Education then distributes these funds through intermediaries.