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Shari L. Gross/Star Tribune via AP, File |
Opening statements are expected 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 over $40 million in a conspiracy that cost taxpayers $250 million — one of the largest pandemic-related fraud cases in the country. Federal authorities say they have recovered about $50 million.
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 ALLEGED PLOT
The food aid came from the U.S. Department of Agriculture and was administered by the state Department of Education. Nonprofits 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 nonprofits before the pandemic, but in 2021 they disbursed around $200 million each. Prosecutors allege they produced invoices for meals that were never served, ran shell companies, laundered money, indulged in passport fraud, and accepted kickbacks.
THE BIG PICTURE
An Associated Press analysis published last June documented how thieves across the country plundered billions in federal COVID-19 relief dollars in the greatest grift in U.S. 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 $280 billion, while another $123 billion was wasted or misspent. Combined, the loss represented 10% of the $4.3 trillion the government disbursed in COVID relief by last fall. Nearly 3,200 defendants have been charged, according to the U.S. Justice Department. About $1.4 billion in stolen pandemic aid has been seized. --->READ MORE HERE
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| Photo Credit: Canva/John Guccione |
Westchester County residents Alicia Ayers and her mother, Andrea Ayers, both of Mount Vernon, were found guilty of submitting more than 300 fraudulent applications for US Small Business Administration Economic Injury Disaster Loans.
Andrea Ayers was a former Code Enforcement Officer for the City of Mount Vernon Police Department.
In response to the COVID-19 pandemic, Congress expanded the SBA’s Economic Injury Disaster Loan (EIDL) Program to provide low-interest loans of up to $2 million to small businesses.
Applicants were also allowed to request and receive an advance of approximately $1,000 per employee, up to a maximum of $10,000.
Based on the fraudulent EIDL applications, the SBA made advance payments of approximately $1.7 million to the applicants, who then kicked back a portion of the advance payments to Alicia Ayers and Andrea Ayers, according to Damian Williams, the US Attorney for the Southern District of New York.
In June and July 2020, Alicia Ayers and her mother used the identities of approximately 300 other individuals to submit approximately 315 online applications to the SBA, seeking over $3 million of funds through the SBA’s EIDL Program.
They falsely represented to the SBA that the applicants were the owners of businesses with 10 or more employees, which was a lie. They knew that the applicants did not employ the number of people reported, and the majority of the applicants did not own businesses or have any employees. --->READ MORE HEREFollow links below to relevant/related stories and resources:
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