As COVID spread, so did fraud. Minnesota saw a lot of it.

A Burnsville man gambled away almost $271,000 in pandemic aid at local casinos before pleading guilty, getting off with probation and restitution.

An Eden Prairie man bilked a pandemic loan program out of $1.6 million and fled to Colombia before being caught, tried and imprisoned for 7½ years.

And, of course, there’s the Feeding Our Future fiasco: Dozens of Minnesotans were charged with pillaging $250 million from a federal child nutrition program for personal enrichment, including the executive director.

The Feeding Our Future case gained national notoriety, while the Eden Prairie and Burnsville grifters’ wrongdoings largely escaped public notice. All are examples of the onslaught of fraud related to the COVID-19 pandemic.

“I don’t think there has ever been anything like this,” said Mike Galdo, former director of COVID-19 fraud enforcement for the Justice Department. “There was an unprecedented tidal wave of fraud.”

Five years after the pandemic began, a definitive tally of COVID fraud has yet to be made, and may never be. “It’s very difficult to do a holistic accounting [of fraud] for all pandemic relief,” Galdo said.

An abundance of government money, intended to buoy Americans during the public health emergency, flowed quickly and often without adequate controls and oversight. Fraud in an array of these programs nationally tops hundreds of billions of dollars.

Locally, a Minnesota Star Tribune analysis of hundreds of federal court cases identified about $266 million that ended up in the hands of convicted and alleged fraudsters in the past five years.

Since 2020, 93 people have been federally charged in Minnesota with defrauding government programs created or modified in response to the pandemic.

Meanwhile, prosecutors here and nationally continue to pursue criminal cases against others accused of COVID fraud.

The meals charity known as Feeding Our Future is the poster child of Minnesota’s pandemic fraud.

Of all Minnesotans charged in federal court for pandemic-related fraud, 3 in 4 are connected to the sprawling investigation of the nonprofit that directed money from the U.S. Department of Agriculture’s (USDA) Child Nutrition Program into lawbreakers’ pockets, the Star Tribune analysis found.

So far, 38 of the 70 Feeding Our Future defendants have pleaded guilty. Five were convicted in a jury trial last year, and two were acquitted. On March 19, jurors convicted founder and ringleader Aimee Bock, and Salim Said, part-owner of the Safari Restaurant. Both await sentencing.

Feeding Our Future accounted for 94% of the money in Minnesota pandemic fraud cases prosecuted in federal court, the Star Tribune analysis shows.

The case “has come to symbolize the problem of fraud in our state,” said Assistant U.S. Attorney Joe Thompson, who oversees fraud and public corruption cases in Minnesota.

Federal authorities say defendants fabricated and grossly inflated the number of hot meals served, then spent the money on luxury cars, homes and trips for themselves.

The USDA relaxed rules for child nutrition programs during the pandemic, aiming to distribute money quickly. But state regulators tasked with overseeing the program “failed to act on warning signs,” the Minnesota Office of the Legislative Auditor (OLA) concluded in June.

In its highly critical report, the OLA found that the Minnesota Department of Education’s inadequate oversight “created opportunities for fraud.” The department pushed back, saying it met all federal oversight requirements.

Embezzlement is one of the “oldest problems with nonprofits,” said Richard Painter, a University of Minnesota Law School professor and a government ethics expert.

“It amazes me that nobody kept an eye on Feeding Our Future,” he said.

Congress passed six laws in 2020 and 2021 to provide pandemic aid to individuals, companies and governments.

Those laws provided $4.5 trillion in federal pandemic relief. By comparison, the U.S. government spent a total of $6.75 trillion in its most recent fiscal year.

Minnesota received about $11 billion in federal COVID relief.

The money flowed in a torrent as lawmakers sought to relieve fast-spreading economic pain.

“Economists can debate this, but if government hadn’t acted quickly, it would have been much tougher to recover,” said Derek Jackson, business professor at St. Mary’s University in Winona.

But government oversight of the money failed at times, Jackson and others who follow COVID fraud say.

“It is always a balancing act in making sure the money gets out quickly and making sure you can prevent fraud,” the DOJ’s Galdo said.

The myriad government agencies administering COVID aid lacked information-sharing agreements before the money went out, hampering a quicker response to fraud, Galdo said. “It took a year to get data sharing between agencies. [The agreements] weren’t thought of ahead of time.”

Nationally, a data-sharing project between the U.S. Department of Labor and the U.S. Small Business Administration (SBA) found in December that some scammers likely received a total of $1.3 billion by defrauding both unemployment insurance and business loan programs at the same time.

The latter came from the Economic Injury Disaster Loan program, one of two business-relief funds run by the SBA. The EIDL and the larger Paycheck Protection Program (PPP) were magnets for fraud, the analysis shows.

Together, they disbursed $1.2 trillion, one of the largest pools of COVID relief. In a rush to distribute money quickly, the SBA weakened or removed controls traditionally used to keep fraudsters from easy access to money.

That was the conclusion of the SBA’s inspector general, an independent investigator. The inspector general estimated the SBA disbursed more than $200 billion in potentially fraudulent funds — mostly loans — through the PPP and EIDL programs.

In other words, at least 17% of the trillion-dollar pool of money from the two programs potentially was lost to fraud.

Kyle W. Brenizer, 36, became the first Minnesotan to face federal charges stemming from PPP fraud in August 2020.

Applications for the program had been open for just four months.

Brenizer later admitted to lying on an application, which netted him an $841,000 loan backed by the federal government. Using an alias, he claimed to have nearly 30 employees and $4 million in payroll through a then-defunct construction company called True-Cut Construction.

He then bought a Harley-Davidson motorcycle and deposited large sums into his other bank accounts, according to federal prosecutors.

Brenizer was sentenced to 81 months in a federal prison in Atwater, Calif., and ordered to repay $23,491.37.

It took longer to catch others, many of whom received lighter penalties.

In 2022, Abdimajid Mohamud Elmi was charged with a felony related to a series of fraudulent PPP and EIDL loans totaling nearly $271,000. He gambled away most of it within days, according to the government.

One year after spending his first $150,000 loan in casinos, Elmi applied for more aid. While the applications were being processed, FBI agents interviewed Elmi about the loans and his gambling habits. About two months later, Elmi got another $120,833 in loans.

On July 20, 2021, $100,000 hit his bank account. Elmi soon drew his balance down to -$657 during a three-day run at Canterbury Park racetrack and casino. Elmi was later denied a fourth $150,000 loan application because of the FBI investigation.

An over-the-road trucker from Burnsville, Elmi pleaded guilty to making false statements to government agents and said he got treatment for a gambling addiction. He was sentenced to five years’ probation and ordered to pay restitution.

Harold Kaeding of Eden Prairie is the only Minnesota pandemic fraudster apart from Feeding Our Future defendants to take his case to trial.

Kaeding, 75, used fake documents and stolen identities to steal about $1.6 million in PPP and EIDL funds. Lenders successfully clawed back about $984,000 and federal authorities seized more than $310,000 in cash and bank holdings.

With pressure mounting, and roughly $231,000 unaccounted for, Kaeding used a passport the government did not know about and bought a plane ticket to Colombia.

He didn’t return willingly. Kaeding was extradited after Colombian authorities tracked him to the seaport city of Barranquilla. A jury found him guilty of seven felonies. He was sentenced to 87 months in prison.

Regulators have found questionable payments and potential fraud in pandemic programs administered by state agencies.

The U.S. Government Accountability Office (GAO), Congress’ investigation arm, estimated in September 2023 that during the pandemic, Minnesota made $26.3 million in fraudulent overpayments of unemployment insurance.

The Minnesota Department of Employment and Economic Development (DEED) said it paid out $16.4 billion in unemployment claims during the pandemic, but less than 1% were fraudulent.

DEED said it has recovered $3.6 million in fraudulent COVID unemployment payments.

About $1 trillion in federal COVID money went to unemployment benefits nationally, one of the largest buckets of pandemic aid. The GAO has estimated pandemic unemployment fraud at $100 billion to $135 billion.

Court files are rife with COVID unemployment fraud cases.

Take Gayle Ferngren, a septuagenarian widow from Rush City.

The Minnesota resident made false claims to procure at least 68 preloaded debit cards with more than $1.3 million in unemployment benefits from programs in Arizona, New York, Massachusetts, Nevada and California.

Ferngren pleaded guilty to mail fraud. She was sentenced in December 2023 to 21 months in prison and ordered to pay restitution, including $1 million to the California Employment Development Department, her largest identified victim.

According to the federal government, Ferngren’s scam predated the pandemic but flourished during it. She started defrauding others a few months after being “duped herself” in a romance fraud scheme, prosecutors wrote in a sentencing memorandum.

Another abuser of unemployment benefits was Takara Hughes, a Maplewood woman who purloined $1.25 million.

Hughes sought benefits from several states under her own name — a practice known as “double dipping” — and received approval from labor departments in California, Louisiana and Minnesota.

She also submitted fraudulent claims using other identities and arranged for prisoners to make claims. She charged a $3,000 fee for her services, according to the government, which found text messages in which she described defrauding pandemic programs as “so easy.”

In addition to a restitution order of $1.25 million, Hughes was sentenced in 2022 to 18 months in federal prison.

In a 2024 report, Minnesota auditors found questionable payments in the state’s “front-line worker” program.

The Legislature appropriated $500 million in 2022 for workers in jobs carrying a higher risk of contracting COVID.

Auditors with the OLA found 41% of the 1 million people who received front-line worker pay were either ineligible or, more commonly, their eligibility couldn’t be confirmed.

The OLA also concluded that the Minnesota Department of Labor and Industry, which oversaw the program, paid some front-line workers whose applications contained “fraud indicators” like suspicious email addresses and bank routing numbers.

The department pushed back on the report, noting OLA found fraud indicators in only an “incredibly small percentage of applications.”

In a 2023 report, the OLA also found fraud indicators in RentHelpMN, a COVID-relief program funded by nearly $600 million in federal emergency rental assistance.

RentHelpMN’s administrator, the Minnesota Housing Finance Agency (MHFA), improved its fraud detection process in 2022 after an early wave of suspicious applications, the OLA found. The agency declined about 4,400 rent assistance applications due to suspected fraud.

Still, the MHFA determined 72 payments were fraudulent, and referred more than 350 suspected fraud applications to criminal prosecutors. So far, 22 defendants accused of collectively stealing $1.1 million have been charged in state courts. Three people have been convicted of felonies; most cases are still pending.

In many rental assistance fraud cases, landlords submitted rental assistance applications for tenants who did not live at their properties during COVID, if ever.

Nationally, the parade of pandemic fraud has led to federal criminal charges against more than 4,200 people through 2024. About 2,470 defendants pleaded guilty or have been convicted, according to the Justice Department.

Defendants have been ordered to pay more than $1 billion in restitution, and the Justice Department has recovered another $1 billion through forfeitures. Yet the prosecution of COVID fraud appears far from over.

Last month, fraud partners Tezzaree El-Amin Champion and Marcus Alexander Hamilton admitted to running a multimillion-dollar pandemic relief con with funds from a novel source: Hennepin County’s small business program.

Champion and Hamilton stole $2.1 million of COVID relief money through a business called Futuristic Management Group LLC, which was contracted to advise other small businesses harmed by the pandemic.

Champion and Hamilton double-charged the county and the business owners for their services, according to the government. They also recruited them to craft fraudulent applications to defraud the county’s pandemic program along with PPP and EIDL.

Businesses receiving services through Futuristic Management overstated income, expenses, taxes and lease records. In one case, Champion helped a boxing coach obtain a $100,000 loan by falsely claiming a business earned $405,000 in 2019. The coach made less than $1,000 and had no employees or expenses.

Champion and Hamilton await sentencing after each pleaded guilty to felony offenses last month.

Even now, prosecutors are still “trying to play catch-up” with the volume of fraud, Galdo said.

Jeffrey Meitrodt of the Minnesota Star Tribune contributed to this story.