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Minnesota has emerged as a national epicenter for pandemic-era fraud, with federal and state investigators uncovering more than $1 billion in stolen Medicaid and COVID-19 relief funds since 2019, according to court records and legislative audits.
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The largest case, known as the Feeding Our Future scandal, involves at least $250 million diverted from federal child nutrition programs. Federal prosecutors have charged more than 70 people in connection with the scheme, which used shell organizations to claim reimbursement for millions of nonexistent meals. Court documents show that defendants in the case and related fraud probes are overwhelmingly from Minnesota’s Somali community, which makes up roughly 1% of the state’s population.
Separate investigations have identified widespread billing fraud in autism therapy programs and housing stabilization services, with Somali-owned providers implicated in schemes totaling hundreds of millions of dollars, prosecutors said.
Some of the stolen funds were wired to Somalia through informal money-transfer networks known as hawala, according to federal law enforcement officials. Counterterrorism investigators have alleged that a portion ultimately reached al-Shabab, though no defendants have been charged with terrorism-related offenses.
Critics, including whistleblowers inside the Minnesota Department of Human Services, have accused Gov. Tim Walz’s administration of ignoring repeated warnings about suspicious billing patterns and waiving required oversight measures. More than 480 department employees raised concerns dating back to 2018, according to internal records cited in a 2023 legislative auditor’s report.
Walz, a Democrat, has defended his administration’s response, pointing to the eventual closure of fraudulent providers and the hiring of additional auditors. His office did not respond to requests for comment on allegations that officials delayed action to avoid accusations of racial bias against the Somali community.
As of December 2025, federal prosecutors continue to file new charges in the ongoing investigations.
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Audit Finds Minnesota Agency’s Lax Oversight Fostered Theft of $250M from Federal Food Aid Program
First Defendant Charged in Autism Fraud Scheme
Federal Prosecutors Charge First Person in Minnesota Autism Fraud Investigation
Minnesota Feeding Our Future Fraud Case Expands to Autism Treatment Providers
Minnesota Human Services Employees Blame Walz for Massive Fraud
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