Prosecutor says 14 Minnesota programs are targeted for fraud and the state is swamped with crime
Five new defendants have been charged in connection with a Minnesota housing services fraud scheme
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Prosecutor says 14 Minnesota programs are targeted for fraud and the state is swamped with crime
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At least 14 state-run programs in Minnesota have been flagged for fraud, a prosecutor said Thursday as he announced new charges in several schemes.
First Assistant U.S. Attorney Joe Thompson said during a news conference that federal officials suspect a significant portion of roughly $18 billion paid out by Medicaid to Minnesota programs was fraudulent.
“What we see in Minnesota is not a handful of bad actors committing crimes,” Thompson said. “It’s swamping Minnesota.”
Investigators’ new findings may bolster President Donald Trump in his claims that Minnesota is a “hub of fraudulent money laundering activity” under Gov. Tim Walz, who was the Democrats’ vice presidential nominee in last year’s presidential election.
Trump has capitalized on the fraud cases to target the Somalian diaspora in Minnesota, calling them “garbage” and saying he doesn’t want immigrants from the East African country in the U.S.
Thompson said 14 state-run programs have been flagged as having significant fraud problems, and many of the defendants were getting money from multiple Medicaid programs.
“What we’re seeing is programs that are entirely fraudulent,” he said.
Five new defendants have been charged in connection with a Minnesota housing services fraud, Thompson said. Two defendants pocketed $750,000 instead of helping Medicaid recipients find stable housing, he said. Prosecutors allege they used the proceeds to travel to international destinations, including London, Istanbul and Dubai.
One defendant submitted $1.4 million in fraudulent claims, using some to purchase cryptocurrency, Thompson said. Federal officials say he fled the country after receiving a subpoena.
The five new defendants join eight others charged in September for their alleged roles in the scheme to defraud the Minnesota Housing Stability Services Program.
Prosecutors also named a new defendant accused of defrauding another state-run, federally funded program that provides services for children with autism, alleging he submitted millions of dollars worth of claims for Medicaid reimbursement. One woman previously charged for exploiting that program pleaded guilty Thursday morning, officials said.
He called Minnesota an outlier, saying that the scale of fraud outpaces that of other states and that he sees more red flags than legitimate business in the claims providers are submitting. Asked who is to blame, Thompson said the state “has not done a good job of mining these programs.”
The fraud puts government-run services at risk for people who really need them, Thompson said.
“There’s real patients, real clients, real people who need services and aren’t getting them,” he said.
Minnesota the target of several federal investigations
By Jonah Kaplan
December 2, 2025 / 5:29 PM CST / CBS Minnesota
Several federal entities are looking at Minnesota, putting the state and Gov. Tim Walz on the defensive.
As President Trump held his last cabinet meeting of the year on Tuesday, Minnesota was clearly on his mind.
“When I watch what is happening in Minnesota, the land of however many lakes they have, they have a lot of lakes, this beautiful place, and I see these people ripping it off,” he said.
Members of Mr. Trump’s cabinet then followed his lead. First, the U.S. Treasury Secretary announced an investigation into what he called Minnesota’s “feckless mismanagement” of taxpayer funds and whether some of that money wound up in the hands of al Shabaab, an al Qaeda-linked terrorist organization in Somalia.
The U.S. Small Business Administration is also getting involved, alleging PPP loans from the pandemic, among other federal grants, were stolen in a grand scheme.
A third federal investigation is being launched by the Department of Transportation, which on Tuesday threatened to withhold more than $30 million in highway funding because of how the state issues commercial driver’s licenses to non-U.S. citizens.
Walz on Tuesday said he welcomes federal help to fight crime, but he doesn’t trust the reasons behind the action.
“Well, we welcome any help on this, but I think everyone in this room is smart enough to understand when the POTUS gets up and tweets 150 times after midnight and targets certain people, it’s not a coincidence he’s targeting Minnesota,” Walz said.
Several cases of fraud have already been investigated by federal authorities, including the $250 million Feeding Our Future scheme. More than 50 people have been convicted.
Ten years ago, a federal jury also convicted a half dozen suspects of conspiring to help ISIS.
Andy Luger, the former U.S. Attorney for Minnesota, led the prosecution in both cases.
“Both were serious crimes. I was not aware of any connection between the two,” Luger said in a statement to WCCO.
Also at the cabinet meeting, the Trump administration announced plans to cut funds for SNAP and food stamp programs in several states, including Minnesota.
