Half or more of the roughly $18 billion in federal funds that supported 14 Minnesota-run programs since 2018 may have been stolen a federal prosecutor said Thursday, describing the massive and multilayered fraud schemes as staggering.
First Assistant U.S. Attorney Joe Thompson said the scale of fraud puts services at risk for people who need them, including adults leaving addiction treatment centers who needed help finding a stable place to live and children with autism who were seeking one-on-one therapy.
Fraud tourism https://t.co/TvcH71g5Bz As Scott discusses below, we all learned a new phrase from the lead federal fraud prosecutor in Minnesota, Joe Thompson. pic.twitter.com/GI35N8FeSw
— SASSYCHICK (@KT07500539) December 20, 2025
While prosecutors typically see fraud manifest as providers overbilling, Thompson said during a news conference in Minneapolis that companies have been created to provide zero services while submitting claims to Medicaid and pocketing federal funds for international travel, luxury vehicles and lavish lifestyles.
“The magnitude cannot be overstated,” Thompson said. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
The 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 election.
Trump has capitalized on the fraud cases to target the Somalia diaspora in Minnesota, which has the largest Somali population in the U.S. Eighty-two of the 92 defendants in the child nutrition, housing services and autism program schemes are Somali Americans, according to the U.S. Attorney’s Office for Minnesota.