Fraud’s grip on Minnesota

The endless scandals plaguing the state demand change

Minnesota’s fraud scandal is so massive and complicated that it is easy to lose sight of the big picture. I previously wrote about this in the Spring 2025 issue of Thinking Minnesota, and since then, the scandal, fraud, and waste uncovered by federal authorities and investigators have exploded, resulting in eye-popping headlines — not just in the local news but worldwide. I wrote then that the political environment under the Walz administration has created an “entire industry of fraud, graft, and corruption.” This didn’t happen overnight or out of thin air. While we are just beginning to understand the scale and reach of the fraud, several things have become clear in the last several months.

First, Gov. Tim Walz, Lt. Gov. Peggy Flanagan, and Attorney General Keith Ellison have known about the fraud for a long time.

While details are still emerging, the claim by Democrats that the fraud “just happened” or that “it happens everywhere” rings hollow. As early as 2013, the childcare scandal was front-page news, with raids, charges, and convictions of multiple defendants. The childcare fraud was pegged at around $100 million, which seems quaint in retrospect.

In 2019, right after Walz, Flanagan, and Ellison were elected, the Office of the Legislative Auditor, the agency that audits state government, published two reports about fraud in childcare programs and the failure of internal controls. These reports also highlighted that $100 million was being moved out of the state to Somalia and likely funded terrorism.

Instead of taking these reports seriously, the Walz administration shut down the Department of Human Services’ criminal investigation unit and turned a blind eye to the fraud.

Second, Ilhan Omar supercharged the fraud with her role in authoring the MEALS Act in March 2020.

Instead of implementing controls to stop fraud, the MEALS Act loosened regulatory requirements for entities seeking federal funds to provide meals to children. Her bill waived site inspections and verification processes, allowed “grab-and-go” delivery outside traditional venues, and expanded eligibility.

Minnesota fraudsters took the MEALS Act and used it to create the Feeding Our Future (FOF) scandal, which former U.S. Attorney Andy Luger called “the largest pandemic fraud in the United States.” To date, 79 people have been indicted for fraud, and 58 have been convicted in the scheme. And, unsurprisingly given Omar’s involvement, 90 percent of those indicted in the scheme are of Somali origin.

Third, Feeding Our Future spawned webs of fraud.

FOF was not only a scandal in its own right, but it also taught fraudsters how easy it was to steal from the Walz administration. Criminals have applied the tactics of FOF to more than a dozen programs, such as Behavioral Health, Housing Stabilization Services, and autism centers. Even the Walz administration admits that half of those indicted in the FOF fraud scheme are listed as providers in other programs.

House Fraud Prevention and State Agency Oversight Policy Committee Chair Rep. Kristin Robbins outlined the details of a few of these webs during a recent hearing. One example stands out. Earlier this year, Fahima Egeh Mahamud was the 79th person charged in the FOF scandal. Ms. Mahamud opened a childcare center and participated in the FOF child nutrition scam, for which she was indicted. Post-FOF, she opened two assisted living facilities and an autism center. These facilities are still receiving payments from the state of Minnesota. Incredibly, this is despite the fact that Ms. Mahamud was arrested at the Minneapolis-St. Paul International airport trying to flee the country. And, worse yet, the day after Ms. Mahamud was arrested, another daycare center was opened at the address of her old childcare center, and this entity is also receiving state money.

Sadly, there are dozens of similar stories — in Minnesota, fraud has become a business model with scams across multiple state programs, with no end in sight.

Fourth, Democrats are still in denial.

Despite the massive, ongoing fraud, Gov. Walz recently claimed that reports of widespread fraud are “make-believe” and Minnesota was just like every other state. His former Department of Human Services Commissioner Jodi Harpstead similarly claimed in January 2025, “There’s a lot of rumors of fraud more than there is actual fraud.” Further, Omar is unrepentant about the effect of the MEALS Act, recently introduced a second MEALS Act, and is once again seeking to lower standards for providers. Incredible.

Worst of all, when Democrats are called out for allowing fraud to continue, their reflexive response is to charge those exposing the fraud as racist. When members of the Minnesota House Fraud Prevention Committee testified in front of the House Oversight Committee on Jan. 7, they were called racist and Islamophobic more than half a dozen times for making the obvious link between the Somali community and the fraud.

Similarly, whistleblower Faye Bernstein, a self-avowed Democrat and long-time state employee, reports that her efforts to expose fraud were met with a “smear campaign.” Instead of being praised for protecting taxpayers and the rule of law, she was called a racist, and her work responsibilities were diminished.

While it will take another column to fully outline the solutions to Minnesota’s fraud problem, it is clear that the first step is a change in leadership. We need to remove those who tolerated and ignored the fraud and replace them with leaders who are truly committed to cleaning up this mess. Only then can Minnesota return to the honest, trustworthy government that once defined us.