AYESHA RASCOE, HOST:
There's a big fraud case under way in Minnesota that's taken a twist that might remind you of a Cohen Brothers movie or a John Grisham novel. It involves a scheme to steal $250 million from taxpayers by ripping off child nutrition programs during the pandemic. The very dramatic twist came at the end of a recent trial when some of the defendants allegedly tried to bribe a juror with a Hallmark gift bag filled with cash.
Minnesota Public Radio news reporter Matt Sepic was in court when it went down and joins us now. Great to have you, Matt.
MATT SEPIC, BYLINE: Hi, Ayesha.
RASCOE: We'll get to that Hallmark gift bag in a moment. But first, what's this fraud case all about?
SEPIC: This is a sprawling investigation that goes back to COVID. Federal prosecutors here in Minneapolis charged 70 people allegedly connected to a now-defunct nonprofit called Feeding Our Future. Authorities say this group ripped off taxpayer-funded programs for children in need. These programs for decades have enabled boys and girls clubs, YMCAs and child care centers to get reimbursed for feeding kids.
But when the pandemic shut those places down, the government allowed for-profit restaurants to serve meals and snacks, and that's when the feds say Feeding Our Future's leaders got greedy and pulled dozens of others into a massive conspiracy.
RASCOE: The feds say $250 million of taxpayer money was stolen. How did the defendants allegedly pull this off?
SEPIC: Investigators say the group ginned up phony reimbursement claims for tens of millions of meals they never served. One defendant who pleaded guilty claimed to have distributed more than 2,500 meals a day to kids in Pelican Rapids, Minnesota. Now, understand, this is the total population of that entire town.
Ayesha, the scope of the alleged conspiracy was staggering. Think about it. They needed to prove that they were serving all these meals. That meant filling out reams of meal attendance sheets. Not surprisingly, the defendants struggled to invent enough names. They ended up using an online name generator, and some of the names they wrote down on these attendance sheets included Britishy Maloney (ph), Serious Problem (ph), and one fake kid named Reagan Pumper (ph).
RASCOE: Reagan Pumper? OK. $250 million - that's a lot of money. Like, where did it all go?
SEPIC: Minnesota U.S. Attorney Andy Luger explained a bit about that at a news conference last year.
(SOUNDBITE OF ARCHIVED RECORDING)
ANDREW LUGER: Many purchased luxury vehicles. Others took luxury vacations and paid for travel at high-priced resorts.
SEPIC: The group also spent millions on real estate in the U.S. and abroad. Investigators have been able to recover about $60 million in assets.
RASCOE: So there was this big fraud scheme and then a trial. So take us from that to this Hallmark gift bag full of cash that was left at a juror's house.
SEPIC: The first seven defendants went to trial back in the spring. After five weeks of testimony, Judge Nancy Brasel abruptly halted closing arguments when lead prosecutor Joe Thompson made a stunning revelation. The night before, a young woman, identified only as Juror 52, called 911 after someone went to her house, dropped off a Hallmark gift bag with $120,000 inside and promised more cash in exchange for an acquittal.
The judge immediately ordered the defendants to surrender their phones to the FBI. She dismissed Juror 52 and replaced her with an alternate. The trial resumed, and the jury convicted five of the defendants of fraud and acquitted the other two.
RASCOE: And that attempted bribery must have led to more charges, right?
SEPIC: Yes. Three of the trial defendants are accused of jury bribery. And here's a bit of irony. One of them who was acquitted of fraud is now jailed and charged in the bribery case.
RASCOE: What more have you found out about this investigation?
SEPIC: Well, this week we learned that the FBI was able to recover some of the encrypted text messages from one of the defendant's phones. Prosecutor Joe Thompson says Ladan Ali of Seattle, a friend of one of the defendants, agreed to deliver the cash. Ali then lied to her co-conspirators. She falsely claimed that Juror 52 had agreed to acquit in exchange for a half million dollars.
No such conversation ever took place. In the end, the men were only able to scrape together $200,000 for the bribe. When she pleaded guilty, Ali admitted that she'd skimmed 80,000 off the top before putting the remaining $120,000 bribe in that Hallmark bag.
RASCOE: That was reporter Matt Sepic with Minnesota Public Radio News. Thank you so much for speaking with us today.
SEPIC: You're welcome, Ayesha.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
