What to know about the massive social services fraud scandal in Minnesota

Allegations of widespread fraud in social service programs have rocked Minnesota in recent months, thrusting the state into the national spotlight.

President Donald Trump has slammed Gov. Tim Walz’s handling of the situation and called for the deportation of the state’s Somali residents, pointing to a viral YouTube video that alleges extensive fraud in day cares run by East African providers.

The White House has said that 85 of the 98 people the Department of Justice charged in Minnesota fraud cases are of Somali descent. That’s heaped scrutiny on an immigrant community that’s long called Minnesota home, with the Trump administration zeroing in on alleged fraud among East African residents as a reason to send more federal agents to Minnesota.

Walz has called Trump’s comments “deeply offensive” and pledged to continue cleaning up the state’s embattled social services programs during his remaining months in office. State Republicans, meanwhile, have made Walz’s handling of fraud their main focus in the 2026 governor’s race.

Here’s what you need to know about the unfolding fraud scandal in Minnesota.

Investigators have documented fraud totaling over $200 million in the Education Department’s meals program and various Medicaid services that the Department of Human Services (DHS) oversees. The embattled programs include those meant to provide housing supports for vulnerable people and offer intervention services to young people with autism.

Other programs facing scrutiny include ones that help people with disabilities live independently and provide addiction treatment services. Federal agents in December raided a Bloomington disability services provider believed to have filed fraudulent claims of as much as $1.1 million last year.

Fifteen people have been charged with defrauding the housing and autism programs, and Walz paused payments to providers in 14 Medicaid programs while ordering a third-party audit of their billing.

Minnesota has for years contended with fraud, giving the state and DHS a reputation for weak oversight.

The Feeding Our Future case saw more than 70 people indicted for falsely claiming during the pandemic to serve meals to tens of thousands of needy children using federal child nutrition programs. Prosecutors have said dozens — perhaps hundreds — of people linked to the scheme will never face charges due to limited resources.

High-profile episodes of fraud in Minnesota stretch back to at least 2015, when officials charged a string of Somali-owned day cares with overbilling a state child care assistance program. A TV news report claimed millions of that money was diverted to East African terrorist groups. A state audit found no evidence to support that claim but characterized DHS controls as “insufficient to effectively prevent, detect, and investigate fraud.”

Allegations of a connection between Somali residents and fraud began circulating again in conservative media in November, after a right-leaning outlet published a report claiming that Somalis who perpetuated the state’s unspooling fraud cases funneled money to terrorist group al-Shabab.

While many of those charged with fraud in Minnesota have been of East African descent, the Minnesota Star Tribune found scant evidence to support City Journal’s claim that stolen taxpayer funds made their way to terrorist groups and a key source in the website’s story claims he was misquoted.

The national attention heaped on the immigrant community has sparked widespread fear, prompting some Somali residents to carry their passports and avoid leaving their homes. Somali business owners have also reported an uptick in harassment.

The Trump administration has relentlessly attacked Minnesota and its Democratic leadership about fraud.

The president has claimed that Somali providers have stolen “billions” from the state; the Minnesota Star Tribune has found that alleged fraud uncovered so far is closer to $200 million.

The Trump administration has also used the fraud scandal to justify its deployment of thousands of federal agents to the Twin Cities, which has ramped up since an ICE agent shot and killed Renee Good.

In late December, the Trump administration pledged to freeze $185 million in child care payments to Minnesota after a conservative influencer posted a video that claimed to uncover widespread fraud at Somali-run day cares in Minneapolis.

A judge ruled Jan. 9 that the president can’t for now block federal money for child care subsidies flowing to multiple Democratic-led states, including Minnesota. But rumors about day care fraud in the Twin Cities have continued to swirl.

The Star Tribune looked into the day cares that the conservative influencer, Nick Shirley, visited in his 43-minute-long recording and found none of the owners had faced fraud charges, though some locations had racked up safety violations. Minnesota regulators visited nine day care centers highlighted by Shirley and found children at all except one that hadn’t yet opened for the day.

More funding freezes have followed in the meantime. The Trump administration announced Jan. 9 it would suspend money for food stamps in Minnesota amid allegations of widespread fraud in the state.

Walz has recently stepped up his efforts to fight fraud, tapping former FBI agent and Bureau of Criminal Apprehension superintendent Tim O’Malley as his point man on high-profile cases. The governor also announced his administration would contract with an outside firm run by former law enforcement and federal agents to establish a fraud prevention plan.

The state also announced recently it would freeze enrollment of new providers in 13 Medicaid programs considered to be at high risk for fraud, including integrated community supports, intensive residential treatment services and adult day services. And scrutiny on state programs recently deepened after an audit found widespread problems in DHS oversight of behavioral health grants.

Republicans have repeatedly criticized Walz for not doing enough to root out fraud in their bid to unseat the two-term governor.