The U.S. attorney’s office gave an update on the scale of fraud in the North Star State—now a ‘fraud tourism’ destination, the first assistant attorney said.
U.S. First Assistant Attorney Joe Thompson announced indictments against a half-dozen new suspects in a pair of recently identified welfare fraud schemes.
Speaking at a news conference in Minnesota on Dec. 18, Thompson said investigators are working “around the clock” to dig into “staggering, industrial-scale fraud.”
Five more people have been charged in a “Housing Stabilization Services” program; a couple of those suspects had no connection to Minnesota but came to the state after hearing that “easy money” could be made through that program, Thompson said.
That so-called “fraud tourism” is a new phenomenon among the Minnesota fraud cases, he said, although prosecutors have heard of it occurring elsewhere.
It’s a shorthand way of explaining that fraud potential, not tourist attractions, motivated suspects to travel to new destinations.
A sixth person was charged in a separate case, dealing with fraudulently claiming to provide services to children with autism.
The housing and autism services deceptions both broke in Minneapolis in September, in the midst of a $240 million to $250 million racket involving a nonprofit called “Feeding Our Future.”
Since the initial charges broke in 2022, 78 people have been charged in that case, and dozens have been convicted.
Meanwhile, authorities executed a search warrant related to fraudulent Medicaid billing, and Medicaid officials are examining $18 billion worth of claims dating to 2018 for 14 services flagged for “significant fraud problems,” he said.
“How much was fraud? The answer is: Far too much. The magnitude of the fraud in Minnesota cannot be overstated,” Thompson said. “Every day we look under a rock and find … a new $50 million fraud scheme.”The new charges follow a string of significant developments related to the fraud cases—all within the past few days.
On Dec. 12, Gov. Tim Walz appointed an anti-fraud “czar.”
On Dec. 15, Education Secretary Linda McMahon called for Walz’s resignation over alleged failure to clamp down on fraud in his state, which she says included $12.5 million in government loans to nearly 2,000 “ghost students” who never attended college.
That same day, the U.S. Labor Department announced it was sending a “strike team” to investigate whether unemployment compensation was being abused in Minnesota.
This is a developing story and will be updated.
By Janice Hisle
