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A Minnesota agency\u2019s inadequate oversight of a federal program that was meant to provide food to kids, and its failure to act on red flags, created the opportunities that led to the theft of $250 million in\u00a0one of the country\u2019s largest<\/a>\u00a0pandemic aid fraud cases, the Legislature\u2019s watchdog arm said Thursday in a scathing report.<\/p>\n The Minnesota Department of Education \u201cfailed 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, 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,\u201d the nonpartisan Office of the Legislative Auditor concluded.<\/p>\n Seventy people have been charged in federal court for their alleged roles in a scheme prosecutors say centered on a nonprofit called Feeding Our Future. Five of the first seven defendants to stand trial\u00a0were convicted Friday.<\/a>\u00a0The trial gained widespread attention after\u00a0someone tried<\/a> <\/a>to bribe a juror<\/a>\u00a0with a bag of $120,000 in cash the night before the case went to the jury. Authorities are still trying to determine the source of that money.<\/p>\n Eighteen other defendants have already pleaded guilty. Trials are still pending for the others.<\/p>\n Education Commissioner Willie L. Jett II disputed the auditor\u2019s characterization of his agency\u2019s oversight as inadequate. He said in a written response in the\u00a0120-page report<\/a>\u00a0that its oversight \u201cmet applicable standards\u201d and that department officials \u201cmade effective referrals to law enforcement.\u201d He said department staffers first spotted problems in summer 2020 and raised their concerns with federal authorities.<\/p>\n \u201cWhat happened with Feeding Our Future was a travesty \u2014 a coordinated, brazen abuse of nutrition programs that exist to ensure access to healthy meals for low-income children,\u201d the commissioner wrote. \u201cThe responsibility for this flagrant fraud lies with the indicted and convicted fraudsters.\u201d<\/p>\n But Republican legislative leaders said at a news conference that the report shows that the failure to stop the fraud lies with the administration of Democratic Gov. Tim Walz, which has said that the state\u2019s\u00a0hands were tied by a 2021 court order<\/a>\u00a0to resume payments despite its concerns \u2014 a charge the judge disputed \u2014 and that the FBI asked the state to continue making payments while the investigation continued.<\/p>\n \u201cThis is stunning,\u201d said GOP Senate Minority Leader Mark Johnson, of East Grand Forks. \u201cThe Department of Education and Gov. Walz have repeatedly tried to tell the public that they did all they could \u2026 but this report clearly demonstrates that was a false narrative.\u201d<\/p>\n Sharp<\/a> criticism also came from some Democrats during a hearing on the report. Sen. Ann Rest, of New Hope, said it was unfortunate that Jett\u2019s predecessors, who ran the agency during the time in question, were not there to answer questions.<\/p>\n \u201cThose commissioners had the authority, as was pointed out in this report by the legislative auditor, and they clearly did not exercise it to discover and to report fraud,\u201d Rest said. \u201cWe do not hear of \u2026 similar programs using federal money to feed students in other states that experienced such fraud.\u201d<\/p>\n Rest lamented that nobody in the department has taken responsibility for what happened. In a variant on the expression, \u201cThe buck stops here,\u201d Rest said: \u201cBut what we really do have is the buck is still running down the street \u2014 running down the street and stopping nowhere. And that is unacceptable.\u201d<\/p>\n Republican Rep. Patti Anderson, of Dellwood, who served as state auditor from 2003-07, said the disruption of the pandemic was no excuse.<\/p>\n \u201cThey could have stopped this long before there were 250 plus million dollars in fraudulent claims sent out to these folks,\u201d Anderson said. \u201cAll this could have all been avoided.\u201d<\/p>\n Jett, who was appointed commissioner in January 2023 amid the fallout, said his agency has implemented changes to strengthen its oversight capabilities, including establishing an office of inspector general in 2023, adding a general counsel\u2019s office in 2022, providing training to all staff on its updated fraud-reporting policies, and contracting with a firm to conduct financial reviews of certain partners.<\/p>\n Federal prosecutors say the conspiracy\u00a0exploited rules that were kept lax<\/a>\u00a0so the economy wouldn\u2019t crash during the pandemic. The FBI began digging into it in spring 2021. The defendants allegedly produced invoices for meals never served, ran shell companies, laundered money, indulged in\u00a0passport fraud<\/a>\u00a0and accepted kickbacks. More than $250 million in federal funds was taken in the Minnesota scheme overall, and only about $50 million of it has been recovered, authorities say.<\/p>\n The money came from the U.S. Department of Agriculture and was administered by the state agency, which funneled the funds through partners including Feeding Our Future. The defendants awaiting trial include\u00a0Aimee Bock, the founder<\/a>\u00a0of the group. She has maintained her innocence.<\/p>\n An\u00a0Associated Press analysis published last June<\/a>\u00a0documented how thieves across the country\u00a0plundered billions<\/a>\u00a0in federal COVID-19 relief dollars. Fraudsters potentially stole more than $280 billion, while an additional $123 billion was wasted or misspent. The combined loss represented 10% of the $4.3 trillion the government disbursed by last fall. Nearly 3,200 people have been charged and about $1.4 billion in stolen aid has been seized, according to the Justice Department.<\/p>\n<\/div>\n\n