Federal investigators are mobilizing to address a significant fraud crisis in Minnesota, with multiple federal agencies collaborating to uncover the extent of the alleged misconduct. The White House announced that nine federal entities are involved in tackling fraud across various state programs, including pandemic food assistance, healthcare, housing support, and unemployment benefits.
At the forefront of this effort is the Department of Justice (DOJ), which has initiated several active criminal investigations related to programs such as Feeding Our Future, Housing Stabilization Services, and various Medicaid-linked care initiatives. As part of its investigations, the DOJ has charged nearly 100 defendants, issued thousands of subpoenas, executed numerous search warrants, and conducted over a thousand witness interviews.
The Federal Bureau of Investigation (FBI) is playing a vital role in supporting these prosecutions. The agency has deployed forensic accountants and data-analytics teams to Minnesota, focusing on healthcare and home-care providers suspected of billing for services that were never rendered. The FBI is also investigating possible connections to larger financial crime networks.
The scope of the federal response extends beyond court actions. The Department of Homeland Security (DHS) reports that hundreds of investigators are conducting site visits and door-to-door inspections at locations suspected of fraud. Through Operation Twin Shield, DHS has identified more than 1,300 potential fraud cases during inspections in Minneapolis and Saint Paul. Investigators are reviewing cases for further verification, including checks on refugee status and potential denaturalization.
In addition to these efforts, the Department of Health and Human Services (HHS) is addressing the financial flow within these programs. According to federal announcements, HHS has frozen certain childcare payments, implemented new requirements for receipts or photo evidence for claims, and launched investigations into Minnesota’s Head Start programs due to alleged fund misuse. The agency is also enforcing Medicaid repayment rules that had not been applied in previous years.
Other federal agencies have also taken action. The Small Business Administration (SBA) has suspended certain grant payments and frozen 6,900 borrowers from federal loan programs linked to approximately $400 million in suspected fraudulent activity. The Department of Housing and Urban Development (HUD) has sent a team to investigate potential fraud involving public housing and rental assistance programs. Meanwhile, the Department of Labor is reviewing Minnesota’s unemployment insurance system, and the Department of Agriculture has ordered the state to recertify SNAP recipients to ensure compliance with federal guidelines.
Determining the total financial impact of the alleged fraud has proven challenging. Federal prosecutors estimate that as much as $9 billion in fraud might have occurred across various Minnesota programs. However, officials emphasize that this figure is still under investigation and has not been fully audited or adjudicated. Court findings to date have confirmed significant fraud, particularly involving the Feeding Our Future program, which is tied to $250 million in fraudulent claims, according to federal court records.
Beyond Feeding Our Future, officials have identified hundreds of millions of dollars more linked to fraud in other programs, including housing assistance and autism services. These figures can vary widely depending on the status of the funds—whether they are alleged, charged, or convicted.
As these investigations unfold, the collaborative efforts of federal agencies highlight a robust response to a complex issue impacting Minnesota’s vulnerable populations and taxpayer funds.
