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By Mandy Taheri and Jason Lemon
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Some $9 billion in Medicaid claims paid out in Minnesota since 2018 may be fraudulent, First Assistant U.S. Attorney Joe Thompson, a federal prosecutor involved with the probe, said Thursday, calling it "staggering, industrial-scale fraud," per the Associated Press.
Why It Matters
President Donald Trump has repeatedly stated that Minnesota is a "hub of fraudulent money laundering activity" under Governor Tim Walz, the Democratic vice presidential nominee in 2024. The prosecutors' repeated fraud allegations come as Walz seeks a third term and has faced significant criticism, particularly from Trump and Republicans, for his leadership in the state, as the alleged fraud occurred.
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More than a dozen people have now been charged for their various alleged involvement in schemes to defraud the government, including allegedly keeping money for themselves instead of supporting Medicaid recipients' search for housing and a federally funded program providing services for children with autism, among others. The fraud allegations go back several years.
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What To Know
During a Thursday press conference, Thompson said that possibly more than half of the $18 billion paid out in Minnesota, spread across at least 14 programs, may have been fraudulent, the Associated Press reported.
“The magnitude cannot be overstated,” Thompson said, adding, “What we see in Minnesota is not a handful of bad actors committing crimes."
He noted several different schemes, saying, “Every day, we look under a rock and find a new $50 million fraud scheme."
Six additional defendants have been federally charged "with participating in schemes to defraud the government in the Autism fraud scheme and the Housing Stabilization Services (HSS) fraud scheme," the Department of Justice said in a press release Thursday. In July 2020, Minnesota offered Medicaid coverage for HHS.
The investigation into fraud in the state has been ongoing, with a notable COVID-19 scam that led to nearly 60 people being convicted of funneling money to Feeding Our Future, along with other schemes, per the AP.
Walz has ordered a third-party audit of Medicaid billing as well as the appointment of a director of program integrity to coordinate statewide efforts to strengthen fraud prevention. In late October, he noted that “we cannot effectively deliver programs and services if they don’t have the backing of the public’s trust. In order to restore that trust we are pumping the brakes on 14 programs that were created to help the most disadvantaged among us, yet have become the target of criminal activity."
What People Are Saying
Governor Tim Walz said in a December address: "We are a state that chooses not to let people go hungry or homeless or uneducated. However, that generosity has been taken advantage of by an organized group of fraudsters and criminals. Minnesota’s longstanding high standards of integrity of public funds go hand in hand with a culture of generosity. You can’t have one without the other."
President Donald Trump said on Truth Social: "Minnesota, under Governor Waltz, is a hub of fraudulent money laundering activity. I am, as President of the United States, hereby terminating, effective immediately, the Temporary Protected Status (TPS Program) for Somalis in Minnesota. Somali gangs are terrorizing the people of that great State, and BILLIONS of Dollars are missing. Send them back to where they came from. It’s OVER!"
What Happens Next
Probes into fraud schemes in the state are ongoing.
Update 12/28/25, 5:26 p.m. ET: This article was updated with additional information.
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