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U.S. charges dozens of people in $250 million pandemic fraud scheme

ARI SHAPIRO, HOST:

There are new criminal charges in what the Justice Department calls the largest pandemic fraud scheme in the U.S. Authorities have unveiled indictments against dozens of people for allegedly defrauding federal child nutrition programs. NPR justice correspondent Carrie Johnson reports.

CARRIE JOHNSON, BYLINE: U.S. attorney Andrew Luger says the defendants stole more than $250 million intended to feed needy kids in Minnesota.

ANDREW LUGER: Over a short period of time, these 47 defendants engaged in a brazen scheme of staggering proportions.

JOHNSON: The Justice Department charged dozens of people in multiple criminal indictments and said three others would plead guilty.

LUGER: The defendants are charged with federal crimes, including conspiracy, wire fraud, money laundering and paying and receiving illegal kickbacks.

JOHNSON: In Minnesota, the scheme is known as Feeding Our Future, after a nonprofit group that participated in the Child Nutrition Program and that allegedly sponsored bogus feeding sites. Michael Paul is an official at the FBI.

MICHAEL PAUL: The subjects in this case weren't interested in feeding our future. They were interested in feeding their own gluttony in the way of international vacations, real estate, luxury vehicles, homes.

JOHNSON: That includes resort properties in Kenya and Turkey. Authorities have seized about $50 million, and they say that work will continue. Again, U.S. attorney Luger.

LUGER: The plan began when the pandemic started in late March 2020 and spread rapidly. It quickly became the ultimate get-rich-quick scheme as the defendants capitalized on the pandemic and grew this operation within months.

JOHNSON: The defendants allegedly raced to set up fake feeding sites for schoolchildren and submitted phony reimbursement forms, sometimes consulting a website called listofrandomnames.com to come up with bogus names. The fraud only slowed in January 2022, when the FBI executed search warrants in weather that hovered near 13 degrees below zero. Kevin Chambers directs pandemic fraud enforcement at the Justice Department in Washington.

KEVIN CHAMBERS: The case that was announced today represents the single largest fraud scheme the department has seen to date.

JOHNSON: Chambers says the DOJ is now making large-scale fraud a priority. That includes launching new strike force teams in Florida, Maryland and California. Congress recently extended the statute of limitations for several types of pandemic fraud, Chambers says.

CHAMBERS: Many of these cases are complex. Many of these cases take quite a bit of time to investigate. We'll be investigating quickly and aggressively, but we will be using as much time as we have to make sure we can bring as many people to justice as possible.

JOHNSON: Now Chambers says his teams will have up to five more years to uncover these schemes and return money to taxpayers. Carrie Johnson, NPR News, Washington.

(SOUNDBITE OF BUN B AND STATIK SELEKTAH SONG, "STILL TRILL (FEAT. METHOD MAN AND GRAFH)") Transcript provided by NPR, Copyright NPR.

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Carrie Johnson is a justice correspondent for the Washington Desk.