LOUISVILLE, Ky. — Two Louisville properties were roped into what the Department of Justice says is the largest pandemic relief fraud scheme to date.
Last month, the DOJ announced it is coming down on 47 defendants for allegedly stealing $250 million in COVID-relief funds meant for a federally-funded child nutrition program.
The investigation is mostly in Minnesota, but in Louisville it centers on two buildings – one in the Iroquois neighborhood, an Islamic center and the other in Shively, a healthcare center.
Both buildings were allegedly purchased with fraudulent funds.
According to court documents from the District of Minnesota, Louisville-based BBI LLC purchased the property at 3847 Cane Run Road for more than $200,000 in May 2021.
Court documents also reveal BBI’s bank account was “funded entirely or virtually entirely” by two companies involved in a money laundering conspiracy – that is Minnesota-based Empire Cuisine and Market and Bushra Wholesalers.
BBI also funded the purchase of 6200 South Third Street in the Iroquois neighborhood later that year in October 2021. They paid $60,000 – the company’s bank account again, said to be “funded entirely or virtually entirely” by the two companies involved in fraud.
The money in both purchases were traced back to fraudulent activity.
So, how did we get here?
The story begins around the start of the pandemic.
According to court documents, Minnesota-based Feeding our Future – a nonprofit that helps community agencies participate in the Federal Child Nutrition Program – allegedly ran a scheme with several fake organizations claiming to feed thousands of children each day.
The organizations received tens of millions of dollars for their services with almost none spent on children, instead, buying real estate, cars and other luxury items.
Minnesota Department of Education officials said the pandemic interfered with its ability to oversee the program, leaving it vulnerable, according to court documents.
Empire Cuisine and Market and Bushra Wholesalers are allegedly part of the scheme with Feeding our Future and BBI received funds from them.
Now, the future of the buildings using that money is uncertain.
The DOJ said that it would be going after all parties involved, calling the alleged scheme “the largest pandemic relief fraud scheme charged to date.”
A source close to the case shared an email from the lawyer representing the president of the Islamic Center.
The letter is dated October 18, and said they have "reached an agreement to hold the case in abeyance until the underlying criminal action has been resolved" – the criminal action is against people in Minnesota, not Louisville.
The letter continues, saying they've spoken to the federal prosecutor in the case and explained that the Islamic Center is paying money into an escrow account, instead of to BBI.
So, if the DOJ comes after the center, they will use that money and not seize the property itself.
Also in the letter, the lawyer for the Islamic Center says they had no knowledge of the source of the funds.
The tenants at the healthcare center in Shively said they have no comment.
BBI has not provided comment.
The case in Minnesota is ongoing.
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