‘Mastermind’ of $250M Minnesota theft scheme gets 500-month prison sentence as feds charge more people with fraud
By Andy Rose, Rob Kuznia, CNN
(CNN) — The woman prosecutors have called the “mastermind” of a massive fraud scheme to steal hundreds of millions of dollars in government aid was sentenced to nearly 42 years in prison Thursday.
Feeding Our Future founder Aimee Bock received a 500-month sentence just over a year after she was convicted of wire fraud and bribery.
“It’s a long sentence, and Aimee Bock did everything she could to earn it,” former assistant US Attorney Joe Thompson said outside the courthouse.
The longest sentence in the most notorious case of federal fraud in Minnesota came minutes before federal officials announced charges against 15 other people accused of defrauding social service programs in the state.
More than $250 million in federal funds was taken in the Feeding Our Future scheme overall, with only about $50 million of it recovered, authorities have said. Bock was ordered to personally pay more than $242 million in restitution.
“No matter how you cut it, it is a massive figure,” said Matthew Ebert, another prosecutor who brought the case forward.
“I don’t have the words to express just how horrible I feel. I know I’m responsible,” Bock told the judge shortly before sentencing Thursday, according to The Minnesota Star Tribune.
The scandal became a national flashpoint late last year when the Trump administration cited it as a reason for an immigration crackdown in Minnesota that provoked fierce protests in the streets. The fraud controversy also loomed large over Democratic Gov. Tim Walz’s decision in January not to seek a third term.
Bock was one of the first people to stand trial in what federal prosecutors have called one of the nation’s largest Covid-19-related frauds, exploiting rules that were kept lax so that the economy wouldn’t crash during the pandemic.
“Covid led to a general abandonment of principles around protecting these programs,” Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, said at a news conference on Thursday.
“The road to justice is not short,” defense attorney Kenneth U. Udiobok told CNN after the sentencing. “Ms. Bock will proceed to the next phase. She is devastated by the length of her sentence. But this is not the end of the road!”
Both Thompson and Ebert, who pursued the Feeding Our Future investigation for years, watched Bock’s sentencing as spectators. They were part of the group of federal prosecutors in Minnesota who resigned earlier this year amid disagreements with the Department of Justice over the response to the shooting of Renee Good, a source familiar with the matter told CNN at the time.
More than a dozen people facing new fraud charges
Within minutes of Bock hearing her fate, federal officials held a news conference at the US Attorney’s Office for the District of Minnesota building in Minneapolis, announcing the new charges in the Trump administration’s continuing focus on fraud in the state.
The people charged are “fraudsters who treated Minnesota-run programs as their personal piggybank,” Assistant Attorney General Colin McDonald said during the news conference.
“This is not the end of our work in Minnesota. This is not the end of the beginning of our work in Minnesota. This is the beginning of our work in Minnesota,” he added.
The newly-announced cases involve theft of more than $90 million in taxpayer money and are accompanied by an expansion of a “strike force” of federal prosecutors in the Midwest to investigate allegations of fraud, McDonald said.
Allegations outlined in newly-unsealed court documents show one person is accused of defrauding the Federal Child Nutrition Program and a state program providing grants to child care providers, in part by falsifying the numbers of meals served to children. Another, accused of defrauding a state program that helps child care centers pay staff, is alleged to have inflated the number of staffers and their hours worked.
One of the defendants, Fahima Mahamud, had already been charged with fraud connected to the Feeding Our Futures program in February. Her business was one of several in the Twin Cities area shown in a high-profile video made by conservative content creator Nick Shirley in December.
Mahamud has not yet entered a plea, and her attorney did not respond to CNN’s request for comment Thursday.
Some charges also involved allegations that children were falsely being diagnosed with autism in order to receive government money, what McDonald called the “largest autism fraud scheme ever charged by the Department of Justice.”
“This was not a paperwork error. It was not a technical violation,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “This was organized theft that exploited the most vulnerable children in America.”
While the Twin Cities area has received tremendous negative attention in the recent focus on fraud, the largest total for alleged fraud in the newly released documents is in a case involving group homes for people with disabilities in rural southern Minnesota.
“These disabled individuals were used like lottery tickets by these defendants to generate millions of dollars,” McDonald said.
The businesses owned by Charles Healey and Katherin Larsen-Guthmiller allegedly made more than $22 million in fraudulent billings to the state’s Medicaid-funded Individualized Home Supports program to expand their real estate holdings around the community of Blue Earth and for personal use.
The defendants used some of the money for luxury purchases “such as vehicles, including an Aston Martin, three Porsches, and three Teslas, and expensive jewelry, including five Rolex watches,” the indictment states.
The business was closed in December, state records show. Their court record does not list an attorney for Healey and Larsen-Guthmiller, and CNN was not able to find phone numbers or email addresses for them.
Shortly after his funding was cut off by the state, Healey told the Faribault County Register he was being investigated for what he characterized as “minor infractions.”
“There has never been even a whiff of fraud in our operation,” Healey said in December.
New charges follow high-profile Minnesota raids last month
The charges come three weeks after a federal official said 22 search warrants were executed in Minnesota as part of a long-running fraud investigation in the state.
McDonald said fraud in Minnesota was not a victimless crime. He described how a “fraudster” neglected a man who was supposed to be receiving 24-hour care.
“This patient was later found dead,” he said. “Meanwhile, the architect of this fraud scheme was billing Medicaid as if he was providing care to this patient. The defendant even submitted a claim of over $400 for services he never provided the day before this man died.”
Oz made a point during the event to credit Shirley, who was sitting with the media. Shirley was not the first to report on the allegations of widespread fraud in Minnesota, but his viral video catapulted those allegations into a national spotlight and was widely promoted by leaders in the Trump administration.
“Perhaps if you want to serve, come join us, but if you can’t serve, do what you can to shine a light on these cases,” Oz said, recognizing that many people are “angry and frustrated” about the fraud cases.
The federal officials on Thursday repeatedly stressed that they are engaged in a campaign against fraud that is unprecedented for its speed and intensity, and sought to strike fear into people who defraud the government.
“My message to the fraudsters, is this: Eat, drink and be merry today,” McDonald said. “Because your days of frolicking and freedom are numbered. We are doing everything we can to find you, and when we do, we will prosecute you, and we will claw back every dollar you have stolen from the American people.”
This story has been updated with additional information.
CNN’s Whitney Wild, Chris Boyette, Kara Devlin and Hanna Park contributed to this report.
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