News and Press Releases

Husband and Wife Plead Guilty to Embezzling Toddlers’ School Lunch Funds

FOR IMMEDIATE RELEASE
April 12, 2012

Joanna Fan and her husband Ziming Shen pled guilty today to program fraud arising from their theft of $2.7 million of federal funds designated for meals for students. The defendants entered their pleas before the Hon. Dora L. Irizarry, United States District Judge, at the United States Courthouse in Brooklyn. Each defendant faces a maximum sentence of 10 years’ imprisonment.

The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, William G. Squires, Jr., Special Agent-in-Charge, United States Department of Agriculture, Office of Inspector General (USDA-OIG), and Victor Lessoff, Acting Special Agent-in-Charge, Internal Revenue Service (IRS), Criminal Investigations, New York Field Office.

Fan was the executive director and a trustee of Red Apple Child Development Centers, which provided day care and schooling for children from birth to age five at facilities located in Manhattan, Queens and Brooklyn. From March 2002 through December 2010, Red Apple received over $13.5 million in federal funds pursuant to the Child and Adult Care Food Program (CACFP) and was required to use those funds to provide food to the toddlers in its schools and day care facilities. In fact, as admitted during their guilty plea allocutions, the defendants illegally diverted CACFP funds to pay unauthorized personal and business expenses, including purchasing real property in Manhattan, expenses for one of Shen’s businesses unrelated to day care and schooling, and physical improvements at the defendants’ schools. Fan also admitted that she had falsely inflated the dollar amounts of the claims Red Apple submitted to CACFP to fraudulently obtain more student meal money. As set forth in the information to which the defendants pled guilty, Fan and Shen embezzled approximately $2.7 million of CACFP funds over a five-year period.

“By siphoning funds from a federal school-lunch program, the defendants literally took food from the mouths of babies and toddlers in a brazen exhibition of sheer greed,” stated United States Attorney Lynch. “Those like the defendants who steal from government programs will be vigorously prosecuted and held to account for their actions.” Ms. Lynch expressed her grateful appreciation to the New York City Police Department and the Nassau County Police Department for their assistance in this investigation.

“The federal school lunch program provides needed meals and nutrition to children.
Those who commit fraud in this and other USDA programs will be aggressively pursued by our office,” stated USDA-OIG Special Agent-in-Charge Squires.

“IRS-Criminal Investigation is committed to investigating people who abuse their positions of authority and trust for their own financial benefit,” stated IRS Acting Special Agent-in-Charge Lessoff. “It is especially troubling when personal gain comes at the expense of not just the law-abiding taxpaying public, but the direct beneficiaries of government programs, like children.”

The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector and Karen Hennigan.

The Defendant:

Name: JOANNA FAN
Age: 50

Name: ZIMMING SHEN
Age: 53



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