Everything we know about Minnesota's massive fraud schemes

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As 2025 draws to a adjacent determination is 1 communicative that has captured the nation's attention. It's not the striking of boats disconnected the seashore of Venezuela allegedly transporting drugs, oregon China's announcement of subject maneuvers astir Taiwan. It is the communicative of fraud successful Minnesota, which national prosecutors estimation could apical $9 billion.

A viral societal media video by YouTuber Nick Shirley, which was amplified by Elon Musk, Vice President J.D. Vance and Attorney General Pam Bondi, has put the issue into the halfway of the nationalist conversation, stoking a ungraded that has been brewing successful authorities authorities for years.

In the aftermath of the video, the Trump medication announced it is pausing national backing to kid attraction successful Minnesota, with President Trump calling Minnesota a "hub of fraudulent wealth laundering activity." The U.S. Department of Health and Human Services besides announced sweeping changes to however each states indispensable taxable claims for Medicaid-supported daycares, including requiring "a justification and a receipt oregon photograph grounds earlier we nonstop wealth to a state."

Even earlier the video dispersed acold crossed the internet, however, ungraded plagued Minnesota. In 2021, national instrumentality enforcement archetypal probed a bid of multimillion dollar fraud schemes. Those fraud schemes person led to national charges against 92 radical with 62 convicted — and counting.

President Trump and different Republican lawmakers person focused attraction connected the state's ample Somali community, arsenic astir of the fraud defendants are of Somali descent, drafting stiff disapproval from section officials, including the state's Democratic Governor Tim Walz, who denounced Mr. Trump's disapproval arsenic "vile, racist lies and slander towards our chap Minnesotans."

Walz, meanwhile, has faced aggravated scrutiny from some wrong and extracurricular Minnesota implicit his administration's handling of the crisis. The politician has acknowledged successful caller weeks that the fraud occupation could agelong into the billions, but disputed the $9 cardinal fig cited by prosecutors.

While Shirley's video focused connected allegations of fraud successful daycares successful Minneapolis, national investigators told CBS News kid attraction is lone "vaguely" a precedence for prosecutors, and attraction and resources are alternatively focused connected much than a twelve different societal services programs successful Minnesota, including nutrition, lodging and behavioral health.

Here's what you request to know:

Feeding Our Future: The lawsuit that started it all

This COVID-era $250 cardinal strategy — which present includes upwards of 75 defendants — revolved astir a nonprofit radical called Feeding Our Future. The radical claimed to enactment with restaurants and caterers to administer meals to schools and extracurricular programs but alternatively submitted fake repast number sheets and invoices, raking successful millions successful administrative fees and getting kickbacks from radical who ran their repast organisation sites, prosecutors said.
Feeding Our Future laminitis Aimee Bock was convicted earlier this year, and respective others progressive successful the strategy person pleaded blameworthy oregon been convicted.
Early on, Minnesota officials questioned immoderate of the group's filings and slowed approvals of reimbursements, prompting Feeding Our Future to file a lawsuit accusing the authorities of radical discrimination. The authorities auditor's bureau recovered that "the menace of ineligible consequences and antagonistic media attention" affected the state's decision-making process astir regulatory enactment against Feeding Our Future.
What national prosecutors called "the largest pandemic epoch fraud successful the United States" is "just the extremity of a precise ample iceberg," according to FBI Director Kash Patel.

Fraud successful a lodging programme with "low barriers to entry"

This summer, authorities officials shut down a reasonably caller programme designed to assistance seniors and radical with disabilities find lodging after discovering "large-scale fraud."
A period later, national prosecutors charged 8 people with defrauding the program, which was tally done the state's Medicaid service, by enrolling arsenic providers and submitting millions successful "fake and inflated bills."
Another 5 radical were charged with bilking the lodging program successful mid-December — including 2 Pennsylvanians with nary wide connections to Minnesota who allegedly traveled determination successful what prosecutors described arsenic "fraud tourism."
Prosecutors said the lodging stabilization program was susceptible to fraud due to the fact that it intentionally had "low barriers to entry" and fewer record-keeping requirements. They besides noted that spending connected the programme had ballooned to much than $100 cardinal past year, contempt archetypal estimates that it would outgo astir $2.6 cardinal a year.

Autism programme fraud

In caller months, 2 radical were charged with defrauding a 3rd authorities programme — successful this case, 1 that provides services to children with autism. Both defendants were accused of hiring unqualified "behavioral technicians" and submitting mendacious claims to the authorities that indicated the unit had worked with children enrolled successful the program. They besides allegedly paid kickbacks to parents who agreed to enroll their children successful the program, successful immoderate cases sending them arsenic overmuch arsenic $1,500, prosecutors said.
One of the autism services defendants, Asha Farhan Hassan, was besides charged with moving a fraudulent nutrient organisation tract arsenic portion of the Feeding Our Future scheme. She pleaded blameworthy to wire fraud successful December.
First Assistant U.S. Attorney for the District of Minnesota Joseph H. Thompson said the autism services lawsuit "is not an isolated scheme." In total, 14 Medicaid services are nether audit and deemed "high risk" for fraud.

Fraud claims against time attraction centers

YouTuber Nick Shirley drew tens of millions of views successful precocious December erstwhile helium posted a video that showed him visiting federally supported kid attraction centers astir Minneapolis and uncovering nary children present. He alleged astir a twelve time attraction centers were not really providing immoderate work and suggested owners were pocketing the payer funds.
CBS News conducted its ain analysis and visited respective of the time attraction centers mentioned by Shirley: each but 2 person progressive licenses, according to authorities records, and each progressive locations were visited by authorities regulators wrong the past six months. One was subjected to an unannounced inspection arsenic precocious arsenic Dec. 4, and our reappraisal recovered dozens of citations related to safety, cleanliness, instrumentality and unit training. Another time attraction shared security footage of radical dropping disconnected young children the aforesaid time that Shirley arrived and claimed the time attraction was empty.

Fallout and response

Shirley's viral video prompted the U.S. Department of Health and Human Services to freeze national kid attraction funding for the authorities of Minnesota, which receives astir $185 cardinal successful national enactment for kid care.
President Trump has mostly blamed the Somali community, calling Somali immigrants "garbage" who "contribute nothing," which has incensed Minnesota lawmakers, who person accused him of demonizing the assemblage astatine large. Mr. Trump ended impermanent deportation protections for Somali immigrants who unrecorded successful Minnesota, claiming without grounds that "Somali gangs are terrorizing the radical of that large State."
Minnesota Gov. Tim Walz, who is up for reelection, has drawn wide scrutiny for his handling of fraud successful the state. But Walz has defended his administration's response, saying "we've spent years cracking down connected fraudsters" and accusing Mr. Trump of "politicizing the contented to defund programs that assistance Minnesotans."
Republican Rep. James Comer of Kentucky, the seat of the House Oversight Committee, opened an investigation into fraud successful Minnesota's nationalist assistance programs and announced plans for hearings with grounds from Walz and different officials.
As the ungraded took connected caller beingness successful December, Walz unveiled a caller statewide fraud prevention program, naming Tim O'Malley arsenic the caller manager of programme integrity.

Greed oregon nationalist information risk?

The Treasury Department is investigating whether taxation dollars from Minnesota's nationalist assistance programs made their mode to al Qaeda affiliate al Shabaab, a U.S.-designated overseas violent enactment based successful Somalia.
Multiple national investigators told CBS News Minnesota determination is no grounds payer dollars were straight funneled to al Shabaab. "The immense bulk of the wealth that these folks made went to spending connected luxury items for themselves," said Andy Luger, the erstwhile U.S. Attorney who led the bureau which prosecuted the Feeding Our Future lawsuit from 2022 until January. "There was ne'er immoderate grounds that this wealth went to money coercion nor was determination immoderate grounds that was the intent of the 70 radical we indicted."
A CBS News reappraisal of the files shows that defendants spent payer currency connected cars, spot and luxury travel. They besides wired millions successful stolen funds overseas, including to banks and companies successful China, wherever uncovering the recipients of that currency tin go an investigative achromatic hole. The defendants besides transferred astir $3 cardinal to accounts successful Kenya.