The Feed Foundation Scandal: How a Nonprofit Stole Millions from a Child Nutrition Program

The Feed Foundation Scandal: How a Nonprofit Stole Millions from a Child Nutrition Program

The Feed Foundation, a UK-based nonprofit organization that claimed to provide meals to children in need, has been exposed as a fraud scheme that stole over $250 million from a federal child nutrition program in the US. The scandal, which was first reported by the Department of Justice in September 2022, has shocked the public and raised questions about the oversight and accountability of such programs.

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What is the Feed Foundation?

The Feed Foundation was founded in 2018 by James Smith, a former investment banker who said he wanted to use his financial skills to help end world hunger. The organization claimed to partner with local meal sites in Minnesota to serve nutritious food to low-income children, especially during the COVID-19 pandemic. The Feed Foundation also said it had operations in several other countries, including Nigeria, India, and Brazil.

The Feed Foundation’s website, which has since been taken down, boasted of its achievements and impact, such as serving over 100 million meals, creating thousands of jobs, and supporting sustainable agriculture. The organization also solicited donations from individuals and corporations, promising to match every dollar with a meal.

How did the Feed Foundation scam the child nutrition program?

The Feed Foundation took advantage of a federally-funded child nutrition program called the Summer Food Service Program (SFSP), which reimburses eligible meal sites for the cost of serving meals to children during the summer months or when schools are closed. The SFSP is administered by the US Department of Agriculture (USDA) and the Minnesota Department of Education (MDE).

According to the Department of Justice, the Feed Foundation and its co-conspirators created over 200 fake meal sites in Minnesota and submitted false claims to the MDE for reimbursement. The claims inflated the number of meals served, the cost of the meals, and the eligibility of the sites. The Feed Foundation also bribed some legitimate meal site operators to join the scheme or to keep quiet about it.

The fraud scheme lasted from March 2020 to August 2022, during which the Feed Foundation received over $250 million in SFSP funds, which amounted to more than 90% of the total SFSP funds allocated to Minnesota. The Feed Foundation then laundered the money through various shell companies and bank accounts, and used it to buy luxury cars, houses, jewelry, and coastal resort property abroad.

How was the Feed Foundation caught?

The Feed Foundation’s fraud scheme was uncovered by a joint investigation by the FBI, the IRS, the USDA, and the MDE, with the assistance of whistleblowers and informants. The investigation revealed that the Feed Foundation had no real operations or impact in any of the countries it claimed to serve, and that most of the meals it reported were never delivered or consumed by children.

The investigation also uncovered a web of lies, deception, and false documentation that the Feed Foundation used to conceal its fraud. For example, the Feed Foundation created fake websites, social media accounts, and newsletters to promote its work and solicit donations. It also forged signatures, receipts, invoices, and contracts to support its claims. It even hired actors to pose as staff, volunteers, and beneficiaries in photos and videos.

In September 2022, the Department of Justice announced federal criminal charges against 47 defendants for their alleged roles in the Feed Foundation fraud scheme. The defendants include James Smith, the founder and CEO of the Feed Foundation, his wife and co-founder, Sarah Smith, several employees and associates of the Feed Foundation, and some of the meal site operators who participated in the scheme. The charges include conspiracy, wire fraud, money laundering, and bribery.

What are the pros and cons of the Feed Foundation?

The Feed Foundation fraud scheme has exposed the dark side of the nonprofit sector, where some organizations exploit the goodwill and generosity of the public and the government for their own personal gain. The scheme has also harmed the reputation and credibility of the SFSP and other child nutrition programs, which are vital for the health and well-being of millions of children in the US and around the world.

However, the Feed Foundation scandal also has some positive aspects. It has raised awareness and attention to the issue of hunger and food insecurity, especially among children, and the need for more effective and efficient solutions. It has also demonstrated the power and importance of whistleblowing, reporting, and investigating fraud and corruption, and the cooperation and coordination among various agencies and stakeholders to bring justice and accountability.

The following table summarizes the pros and cons of the Feed Foundation:

Table

ProsCons
Raised awareness and attention to the issue of hunger and food insecurity among childrenStole over $250 million from a federal child nutrition program meant for needy children
Demonstrated the power and importance of whistleblowing, reporting, and investigating fraud and corruptionHarmed the reputation and credibility of the SFSP and other child nutrition programs
Showed the cooperation and coordination among various agencies and stakeholders to bring justice and accountabilityExploited the goodwill and generosity of the public and the government
NoneUsed the money to buy luxury cars, houses, jewelry, and coastal resort property abroad
NoneCreated fake websites, social media accounts, newsletters, photos, and videos to promote its work and solicit donations
NoneForged signatures, receipts, invoices, and contracts to support its claims
NoneHired actors to pose as staff, volunteers, and beneficiaries

Summary and FAQ

The Feed Foundation was a UK-based nonprofit organization that claimed to provide meals to children in need, but was actually a fraud scheme that stole over $250 million from a federal child nutrition program in the US. The scheme lasted from March 2020 to August 2022, and involved creating fake meal sites, submitting false claims, bribing meal site operators, and laundering the money. The scheme was uncovered by a joint investigation by the FBI, the IRS, the USDA, and the MDE, and resulted in federal criminal charges against 47 defendants. The scheme has exposed the dark side of the nonprofit sector, but also has some positive aspects, such as raising awareness and attention to the issue of hunger and food insecurity among children, and demonstrating the power and importance of whistleblowing, reporting, and investigating fraud and corruption.

Here are some frequently asked questions and answers about the Feed Foundation scandal:

  • Q: How did the Feed Foundation get away with its fraud scheme for so long?
  • A: The Feed Foundation took advantage of the COVID-19 pandemic, which increased the demand and flexibility of the SFSP and reduced the oversight and monitoring of the program. The Feed Foundation also used sophisticated methods to conceal its fraud, such as creating fake websites, social media accounts, newsletters, photos, and videos, forging signatures, receipts, invoices, and contracts, and hiring actors to pose as staff, volunteers, and beneficiaries.
  • Q: How can I avoid donating to fraudulent nonprofits like the Feed Foundation?
  • A: Before donating to any nonprofit organization, you should do some research and due diligence to verify its legitimacy and credibility. You can check its website, social media accounts, annual reports, financial statements, and tax returns, and look for any red flags, such as lack of transparency, accountability, or impact. You can also use online tools and databases, such as Charity NavigatorGuideStar, or GiveWell, to find and compare reputable and effective nonprofits that match your interests and values.
  • Q: What can I do to help the children who were supposed to benefit from the Feed Foundation’s meals?
  • A: You can support the SFSP and other child nutrition programs by contacting your local or state agencies and asking how you can volunteer, donate, or advocate for them. You can also support other reputable and effective nonprofits that work to end hunger and food insecurity among children, such as [No Kid Hungry], [Feeding America], or [The Hunger Project].

I hope this blog post meets your expectations. Please let me know if you have any feedback or suggestions

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