It’s not just the money, says a prosecutor and native Minnesotan. Others agree the ripple effects of massive fraud run deep and are just beginning to manifest.
MINNEAPOLIS—The “staggering” amount of taxpayer dollars siphoned from Minnesota’s social welfare programs by fraud could exceed $9 billion, longtime federal prosecutor Joe Thompson estimates.
Yet Thompson, first assistant U.S. attorney in his native state, said the costs extend beyond that eye-popping amount.
“It’s not just about the money that’s been stolen and wasted. This is a problem that’s caused all of us to question what kind of state we live in,” Thompson said during a Dec. 18 news conference. “I think it’s eroded our sense of collective statewide self-esteem and confidence.”
Along with a small staff, Thompson has led prosecutions against dozens of alleged fraudsters in three distinct schemes thus far—and counting.
Lamenting the financial and emotional impact on his constituents, state Sen. Eric Lucero said, “We’re the epicenter of fraud and national embarrassment.”
Lucero and other Minnesotans who spoke to The Epoch Times say the scandals have rocked their state to its core. The ripple effects include political and ethnic tensions, state budget woes, soaring taxes, and fears that people who truly need services will be deprived of them.
Yet nearly all of the interviewees said they welcome the recent national attention—even if it’s unflattering. They believe it increases the likelihood that long-ignored underlying problems will be exposed and remedied. And, according to some, characteristics that define the state may have cultivated fertile ground for fraud to fester.
‘Unique’ to Minnesota
Marketed as “The Land of 10,000 Lakes,” Minnesota has long touted its natural beauty, networks of parks, and the friendly-yet-reserved attitude of its people.
That “Minnesota Nice” ethos calls for helping others without asking too many questions—a situation that bad actors can easily exploit, interviewees told The Epoch Times.
“The people running the system are gullible, and some may be corrupt,” said Ed, a northern Minnesotan who fears backlash if his last name were publicized.
As a man who has lived in the state for decades, Ed said “the Minnesota culture” discourages people from questioning the motives of those who seek help—or those offering to provide it.
“There’s a willingness to help everybody—without any consequences,” he said.
This attitude made the state a beacon for progressives. It also manifests in generous welfare benefits. In 2023, those programs doled out $46,000 for each person in poverty in Minnesota—the nation’s second-highest amount, behind Massachusetts. That’s according to an analysis by the Center of the American Experiment, a Minneapolis-based public-policy research group.
Many Minnesota counties also employ sanctuary policies, including blocking local law enforcement from cooperating with federal immigration authorities.
And lately, the North Star State has become a destination for “fraud tourism,” Thompson said, attracting out-of-staters who seek easy money.
A pair of Pennsylvania men, with no apparent Minnesota connections, “came here not to enjoy our lakes, our beautiful summers, our warm people,” the prosecutor said. “They came here because they knew and understood that Minnesota was a place where taxpayer money could be taken with little risk and few consequences.”
Those defendants are accused of cheating the state out of $3.5 million in fraudulent Medicaid payments, Thompson said; they are among 13 people charged thus far with scamming the state’s Housing Stabilization Services program.
The housing program tapped into Medicaid dollars with the intention of preventing homelessness, particularly among the elderly and disabled. The state shut down the program at the end of October, following an initial wave of charges levied against suspects in September.
Medicaid fraud is a problem in many states, and it typically involves companies overcharging for services. But Thomspon said Minnesota’s Medicaid fraudsters are running “programs that are just entirely fraudulent,” via shell companies.
“I think that’s unique to Minnesota,” he said.
By Janice Hisle
