A St. Louis-area couple has been accused of orchestrating a multi-million-dollar fraud scheme, diverting funds meant for feeding low-income children to fund a lavish lifestyle. The couple who ran a local non-profit were arrested on Tuesday after being accused of stealing more than $7 million. FBI special agents also confiscated a pickup truck, two vans and a minivan that were purchased with what the indictment calls fraudulently obtained funds.
St. Louis charity leaders indicted for fraud
Diarra Williams, 30, and Nicholas Warford, 31, of Edwardsville, Illinois, are scheduled to enter not guilty pleas on Tuesday afternoon. Both were indicted on February 26 with one count of conspiracy to commit wire fraud, six counts of wire fraud, one count of conspiracy to commit money laundering and one count of obstruction of an official proceeding.
According to the indictment, the couple defrauded Missouri’s At-Risk After-school Program and Summer Food Service Program, which the U.S. Department of Agriculture funds. Eligible public and private organizations participate in the At-Risk After-school Program through the Child and Adult Care Food Program (CACFP).
The CACFP provides funding for snacks and suppers in organized after-school programs. The food program benefits children by providing needed nutrition. It has also been shown to help reduce or prevent children’s involvement in juvenile crime or other high-risk behaviors.
Eligible facilities must serve meals and snacks that meet program requirements, maintain accurate and complete records, and train center personnel in program requirements and operations. To be eligible for reimbursement under the Child and Adult Care Food Program (CACFP), after-school programs must meet the following criteria:
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The after-school program must be operated by a public or private, not-for-profit organization, or—if a private, for-profit organization—at least 25 percent of the enrolled children’s care must be paid through Title XX funds (25 percent of enrolled children or licensed capacity, whichever is less).
The purpose of the program must be to provide care in after-school settings. This does not mean the program must offer formal, all-day child care (although many of these programs would be eligible to participate).
The after-school program must include education or enrichment activities in an organized, structured, and supervised environment. Under this provision, extracurricular activities such as the school choir, debate team, and drama society can qualify to participate only if their essential purpose is to provide after-school care.
Luxury lifestyle funded by charity fraud
The indictment says Williams ran a non-profit called The Bailey Foundation, fraudulently claiming to serve more than 2.2 million meals. Williams and Warford then laundered the meal money through Warford’s Classic Catering LLC, a company owned by Warford. They created fake invoices showing meal purchases that were never made.
“The scheme lasted from March 2020 through July 2022. An April 2021 invoice falsely claimed that 208,456 meals were served, each of which included an eight-ounce serving of milk; Warford’s company bought no milk and paid less than $5,000 for food,” states the indictment.
The indictment reports that Williams and Warford used the money to buy a $1.4 million home in Edwardsville, a 2018 Lincoln Navigator, a 2019 Ram 1500 Rebel pickup, a 2011 Mercedes Benz Sprinter, a 2017 Chrysler Pacifica and two 2021 Ram Promaster vans. The indictment contends that they spent $140,000 on extravagant vacations, $100,000 on furniture, home electronics and landscaping for their new home, more than $50,000 in school tuition payments, and $460,000 on Warford’s mother.
The couple falsely claimed in reports to the state that they had spent the money on feeding children and told the IRS that their lavish spending represented legitimate business expenses of Warford’s company. The indictment alleges they also tried to impede the investigation by producing phony invoices in response to a federal grand jury subpoena. The indictment seeks the forfeiture of vehicles and the couple’s home.
Investigators call alleged fraud “despicable”
“The alleged fraud is beyond despicable; the defendants allegedly stole millions in taxpayer dollars meant to feed low-income children in Missouri for their use,” said Acting Special Agent in Charge, Chris Crocker of the FBI St. Louis Division.
The RS-Criminal Investigation St. Louis Special Agent in Charge William Steenson, said that the defendants are accused of stealing money meant to feed low-income school-aged children and using the funds to live a lavish lifestyle, and that it’s hard to put into words how egregious these accusations are. According to him, their actions have been disrupted, and they can now be held accountable.
The FBI, the U.S. Department of Agriculture Office of Inspector General, and the IRS Criminal Investigation Division handle the case. Assistant U.S. Attorney Derek Wiseman is leading the prosecution. Federal investigators emphasize that all defendants are presumed innocent until proven guilty.
The case against Williams and Warford is a stark reminder of the importance of accountability and transparency in charitable organizations. As highlighted by U.S. Senator Richard Blumenthal’s recent warning, charity fraud can take many forms, and vigilance is essential to protecting vulnerable populations and ensuring that donations reach their intended recipients.