In July 2019, Minnesota state officials spotted early signs of fraud that would eventually siphon away more than $1 billion in taxpayer money, but they quickly faced pressure from leaders of the charitable group Feeding Our Future to stop asking questions, according to multiple former employees at the Minnesota Department of Education.

The scandal, which has already led to 61 convictions, has widely been viewed as a byproduct of the COVID-19 pandemic. At one point, then-Attorney General Merrick Garland called it “the largest pandemic relief fraud scheme” in the United States.

Acting U.S. Attorney Lisa D. Kirkpatrick said those convicted “took advantage of the Covid-19 pandemic to carry out a massive fraud scheme that stole money meant to feed children.”

But state officials say the schemes aimed at diverting federal dollars meant for people who are poor, food insecure or disabled, actually started far sooner, months after Minnesota’s Democratic Gov. Tim Walz took office in 2019. In its early stages, members of the charitable group Feeding Our Future billed the state for some $3.4 million. 

By 2021, however, that number ballooned. Before it was finally halted, Feeding Our Future had falsely claimed to have served 91 million meals, for which the group received nearly $250 million in federal funds, according to federal prosecutors. That money did not go to feed kids, federal officials said. Instead it was used to fund lavish lifestyles.

Investigators say the money came from the U.S. Department of Agriculture, with oversight from state governments. In Minnesota, those funds were administered by the state Department of Education, with meals historically provided to kids through schools and day care centers. 

In recent weeks, renewed attention to the scandal has focused on the state’s failure to identify and halt the theft before it spun out of control. Conservative politicians and bloggers have alleged the state’s liberal establishment was cowed into inaction by intimidation from Feeding Our Future, which contracted within the state’s large Somali community — because the food charity sought to paint early scrutiny of the nonprofit as racism.

Well before the pandemic, state officials told CBS News that they began experiencing tension with the woman later convicted of masterminding the fraud, Aimee Bock. They began documenting her “concerning  behavior.” One former employee told CBS News that Bock almost immediately began pressuring state workers who might have had follow up questions or concerns before processing reimbursements.

Within weeks of Feeding Our Future’s first submissions to the state, Minnesota workers also recognized that the charity was claiming to serve meals in numbers that were “not consistent” and “not realistic,” one official told CBS News.

Then the pandemic took hold. The officials told CBS News the scheme rapidly accelerated. Safeguards fell away — removed intentionally to insure residents in need did not go hungry.

But as state workers asked more questions — and even stopped payment on some receipts — Feeding Our Future ratcheted up pressure in response. In 2020, the charitable group filed a lawsuit alleging the state had “harmed Feeding Our Future by subjecting it to additional procedural hurdles in violation of federal regulations.”

The state “intentionally and wrongfully refuse[d] to do business with Feeding Our Future and the community it serves by discriminating … because of Feeding Our Future’s race, national origin, color, and religion.”

A judge dismissed the civil case after the FBI executed search warrants on Feeding Our Future and made public its investigation in January 2022.

The entire episode played out in the aftermath of the murder of George Floyd by a Minneapolis police officer, as racial tensions ran high.

Seven months later, federal prosecutors first announced criminal charges against 47 people in the Feeding Our Future scandal. The number charged grew to 78 in total, and 59 have since been convicted, including Bock, who is awaiting sentencing.

Reached by phone on Thursday, Bock’s attorney Kenneth Udoibok said his client plans to appeal her conviction. He denied Bock exerted pressure on state officials so they would not properly scrutinize meal claims. 

“That doesn’t meet the smell test,” Udoibok said. “A government agency with all its resources, and its reputation is afraid of Amy? That is just rich. It’s a lie.”

Udoibok said the state Department of Education employees leveling the accusation weren’t acknowledging their own role in the massive fraud. 

“No one in the state of Minnesota, no one in the Department of Education has taken any responsibility for this fraud that they allowed to go through,” he said

While Bock, who is White, was described by investigators as the mastermind, most of the other defendants and alleged co-conspirators are Somalis, provoking fresh attacks from the Trump administration against the state’s large Somali community.

In recent days, President Trump has claimed Somali migrants “ripped off” Minnesota and has referred to the state as a “hellhole.” He has called people from Somalia “garbage” who “contribute nothing” and said: “I don’t want them in our country, I’ll be honest with you.” This week, Immigration and Customs Enforcement began enhanced operations in the Minneapolis-St. Paul area, home to a large population of Somalis.

Walz on Thursday said Mr. Trump’s comments are “unprecedented for a United States president,” and he denounced Trump’s barrage of anti-Somali statements as “vile, racist lies and slander towards our fellow Minnesotans.” 

Walz said on “Meet the Press” last weekend that the fraud cases are “totally disconnected” from the broader Somali community. “To demonize an entire community on the actions of a few, it’s lazy,” he said.

House Republicans on Wednesday launched an investigation into the governor’s handling of the fraud cases. Walz has long been criticized for being slow to act, but he has said his administration caught the fraud early and reported it first to the USDA, and then to the FBI.  

Prosecutors have charged nearly a dozen others in cases involving other alleged COVID-related fraud in Minnesota. The schemes are alleged to have operated similarly to the original one focused on nutrition funds, but these involve housing assistance and behavioral health services.

Prosecutors in all those cases have charged an additional eight people, most of whom are Somali, bringing the total number charged to 87, with 61 convictions. Sources at the U.S. attorneys office tell CBS News the investigations are ongoing in all of the fraud cases, including Feeding Our Future, with the total amount of stolen money reaching more than $1 billion.