The woman prosecutors 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.
’s founder, Aimee Bock, received a 500-month sentence just over a year after being convicted of wire fraud and bribery.
“It’s a long sentence, and Aimee Bock did everything she could to deserve it,” former Assistant U.S. Attorney Joe Thompson said outside the courtroom.
The longest sentence in Minnesota’s most notorious federal fraud case was handed down minutes before federal authorities announced charges against 15 other people accused of defrauding welfare programs in the state.
More than $250 million in federal funds were misappropriated in the Feeding Our Future scheme, only about $50 million of which has been recovered, authorities said. Bock was ordered to personally pay more than $242 million in restitution.
“No matter how you look at it, it’s a huge amount,” said Matthew Ebert, another prosecutor who worked on the case.
“I have no words to express how horrible I feel. I know I am responsible,” Bock told the judge shortly before sentencing on Thursday, according to the newspaper The Minnesota Star Tribune.
Mark Osler, a professor at the University of St. Thomas School of Law in Minneapolis and a former federal prosecutor, said Bock’s sentence was particularly harsh because the crime involved a coordinated effort that affected taxpayers and children, unlike other scams in which investors are the victims.
“If I pay my taxes and the money ends up going to scammers or taking food from children, there is something much more sinister about that,” Osler told CNN.
“Sentencing guidelines are largely determined by the value of the loss, and here we have a very high value,” he added.
One of the goals of a long prison sentence in a white-collar crime case is deterrence, Osler said. Bock’s role in the fraud was another factor.
Richard Painter, a professor at the University of Minnesota Law School, was not surprised by Bock’s sentence.
“This happened over an extended period of time, and to say you are giving food to children and keeping the money is as horrible as a white-collar crime can be,” he said.
The scandal became a point of national tension late last year when the Trump administration cited it as justification for an immigration crackdown in Minnesota that sparked intense street protests. The fraud controversy also played a major role in Democratic Gov. Tim Walz’s decision in January not to seek a third term.
Bock was one of the first people to be tried in what federal prosecutors called one of the country’s biggest COVID-19 frauds, exploiting rules that were kept lax so the economy wouldn’t collapse during the pandemic.
“Covid has led to a widespread abandonment of the principles of protecting these programs,” Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said at a press briefing Thursday.
“The road to justice is not short,” defense attorney Kenneth U. Udiobok told CNN after the sentence.
“Ms. Bock will move on to the next phase. She is devastated by the length of her sentence. But this is not the end of the line!”
Both Thompson and Ebert, who led the Feeding Our Future investigation for years, watched Bock’s sentencing as spectators. They were part of a group of federal prosecutors in Minnesota who resigned earlier this year amid disagreements with the Justice Department over the response to , as reported to CNN at the time by a source familiar with the matter.
More than a dozen people face new fraud charges
Just minutes after Bock was informed of her fate, federal authorities held a news conference at the U.S. Attorney’s Office for the District of Minnesota in , announcing the new charges, in yet another example of the Trump administration’s continued focus on fraud in the state.
The defendants are “fraudsters who treated Minnesota-run programs like their personal coffers,” Assistant Attorney General Colin McDonald said during the press 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 the theft of more than $90 million in taxpayer money and are accompanied by the expansion of a “task force” of federal prosecutors in the Midwest to investigate allegations of fraud, McDonald said.
“Minnesotans are a generous people, and we believe in supporting those who need a helping hand,” Minnesota Attorney General Keith Ellison said in a statement.
“I am outraged to see fraudsters taking advantage of this generosity, and my office and I will be happy to collaborate with all those who are also committed to holding fraudsters accountable,” he said.
Allegations detailed in recently released court documents show that a person is accused of defrauding the federal Child Nutrition Program and a state program that provides child care subsidies, in part by falsifying the number of meals served to children.
Another person, accused of defrauding a state program that helps day care centers pay their employees, allegedly inflated the number of employees and their hours worked.
One of the defendants, Fahima Mahamud, had previously been charged with fraud related to the Feeding Our Futures program in February. His establishment was one of several in the Twin Cities region featured in a high-profile video produced by conservative content creator Nick Shirley in December.
Mahamud has not yet pleaded guilty or innocent, and her lawyer did not respond to the company’s request for comment. CNN on Thursday.
Some charges also involved allegations that children were being falsely diagnosed with autism to receive money from the government, which McDonald called “the largest autism fraud scheme ever charged by the Department of Justice.”
“It was not a documentation error. It was not a technical violation,” Health and Human Services Secretary Robert F. Kennedy Jr. said.
“It was an organized robbery that exploited America’s most vulnerable children,” he said.
Another defendant is Muhammad Omar, accused of healthcare fraud involving a Housing Stabilization Services company with fraudulent claims. He was arrested on Thursday after trying to escape.
A CNN is trying to determine if Omar has legal representation.
“He was so desperate to escape that he jumped from the fourth floor of the building where he lives… He was limping and ran away, and later the FBI was able to arrest him,” Oz told Jake Tapper of CNN.
“This man blatantly embezzled three and a half million dollars from one of these housing stabilization programs,” he added.
While the region has received a lot of negative attention recently due to the focus on fraud, the highest total amount of alleged fraud in the newly released documents concerns a case involving group homes for people with disabilities in rural southern Minnesota.
“These people with disabilities were used as lottery tickets by the defendants to generate millions of dollars,” McDonald said.
The companies of Charles Healey and Katherin Larsen-Guthmiller allegedly fraudulently billed the state’s Medicaid-funded Individualized Home Support (IDHS) program more than $22 million to expand their properties in the Blue Earth region 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 company closed in December, according to state records. Court records do not list an attorney for Healey and Larsen-Guthmiller, and the CNN could not find phone numbers or email addresses for them. Shortly after the state cut off his funding, Healey told the Faribault County Register that he was being investigated for what he described as “minor infractions.”
“There has never been even a hint of fraud in our operation,” Healey said in December.
New accusations arise after high-profile police operations
The charges come three weeks after a federal official said 22 search warrants were served in Minnesota as part of a long-running fraud investigation in the state.
McDonald said fraud in Minnesota is not a victimless crime. He described how a “fraudster” neglected a man who should have been 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 were providing care to this patient. The defendant even submitted a claim for more than $400 for services he never provided, the day before this man’s death,” he said.
During the event, Oz made a point of giving credit to Shirley, who was sitting with the press. Shirley was not the first to report allegations of widespread fraud in Minnesota, but his viral video catapulted these allegations into the national spotlight and was widely circulated by Trump administration leaders.
“Maybe if you want to serve, join us, but if you can’t serve, do what you can to bring attention to these cases,” Oz said, acknowledging that many people are “angry and frustrated” about fraud cases.
Asked what Minnesota needed to do to restore funding suspended by the federal government, Oz noted that the state has “a $3 billion reserve fund” for social assistance programs.
“We’re not taking the money out of Minnesota. We’re deferring payment. We’re hoping they’ll contact us within a month or two,” Oz told CNNadding that state authorities have been asked to revalidate their service providers.
On Thursday, federal authorities repeatedly emphasized that they are engaged in an anti-fraud campaign that is unprecedented in terms of speed and intensity, and sought to instill fear in people who defraud the government.
“My message to fraudsters is this: Eat, drink and be merry today,” McDonald said.
“Because your days of partying and freedom are numbered. We are doing everything we can to find you, and when we find you, we will prosecute you and recover every penny you stole from the American people,” he added.
(With input from Whitney Wild, Chris Boyette, Kara Devlin, Ray Sanchez and Hanna Park of CNN)
