Couple Accused in $2.3-Million Meals Program Fraud

For a decade, Wan Hee Moon oversaw the Southern California portion of a government meals program serving low-income children in day care.

In her job with the state Department of Education, she was responsible for ensuring that accounting and reimbursement claims were proper.

But federal prosecutors say that Moon and her husband, Kyung Ho Moon, were engaged in an ongoing fraud using an elaborate web of aliases and bogus claims to skim $2.3 million in administrative funds from the program she was charged with monitoring.

The Moons, who are scheduled to be arraigned Thursday on charges of mail fraud, allegedly used the money to pay for everything from a 5,000-square-foot home in Palos Verdes to skiing trips and their children’s college tuition.

The charges stem from one of many investigations across the nation involving the $1.7-billion federal Child and Adult Care Food Program, which subsidizes day-care meals for low-income children and is often administered by states.

“At this point we’ve found a significant number of problems as a result of the audits,” said David Dickson, special agent in the inspector general’s office of the U.S. Department of Agriculture, which oversees the program nationally.

In addition to the Moon case, there are 21 active investigations underway in 13 states, including three in California, and the department’s inspector general is assigning more staff to audit the program.

“It would appear that the vulnerability [to fraud] is due as much as anything to the oversight or lack thereof on the part of the states,” Dickson said.

The type of criminal filing prosecutors made in the Moon case--a charge “by information” rather than indictment--is typically used when a plea agreement has been struck. Robert Corbin, the attorney for Kyung Ho Moon, said he expected “the entire matter will be disposed of with the Moons accepting full responsibility.”

“We do not believe that the loss to the government was the amount alleged in the information,” Corbin said, “and we’ll demonstrate to the court that it was considerably less.”

In charges filed July 31, federal prosecutors accuse the couple of using Pacific Asian American Family Care, a Long Beach nonprofit organization they founded in 1989, to carry out the fraud. As one of the sponsoring agencies that channeled meal money from the government to day-care centers and homes, the Moons’ organization was reimbursed for administering the program to more than 60 centers and 175 homes in Los Angeles and Orange counties.

The Moons did not take food money, authorities said. But between 1990 and 1996, they filed false administration claims, inventing employees and also signing up about 40 day-care centers that were not eligible for the program, according to court papers and state officials.

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Authorities charge that Wan Hee Moon, who was fired earlier this summer, concealed her relationship with Pacific Asian, failing to report that her husband, an aerospace engineer, was an officer at the agency or that it operated from a house leased from the Moons.

“We never knew she was involved in PAAM at all,” said Joanne Lowe, deputy general counsel of the state education department. “We did not know that she owned property PAAM was leasing, that her husband was an officer. There were a lot of aliases and we did not know anything about them.”

Authorities say the Moons used the money to buy several properties and pay for such expenses as gardening services and college tuition.

The U.S. attorney’s office has filed court papers to seize the Moons’ real estate, including their Palos Verdes home, which is on the market and priced at nearly $1.5 million. If the forfeiture is granted, the government would get the sale proceeds.

Another couple associated with Pacific Asian, Seong Ho and Hee Sook Yeo, are charged with separately defrauding the government of $60,000 by filing reimbursement claims for day-care centers and homes no longer participating in the meals program. Their attorneys could not be reached for comment.