Half of all federal welfare funds sent to Minnesota since 2018 have been lost to fraud.
Half.
That’s $9 billion stolen from 14 programs. Autism services. Housing assistance. Child nutrition. Programs designed to help vulnerable Americans, looted by criminals who found out nobody was watching.
CMS Administrator Dr. Mehmet Oz went on the Alex Marlow Show and delivered a message to Tim Walz and every other governor enabling this theft:
“When you find fraud — and fraudsters are good at finding it — they’ll milk it for as long as they can. So you have to come down hard.”
The Trump administration is coming down hard. And Minnesota is about to feel it.
The $3 Million Program That Cost $400 Million
Dr. Oz explained one scheme that perfectly captures Minnesota’s fraud epidemic.
The autism services program was budgeted at $3 million per year.
Fraudsters stole $400 million from it.
How? Oz laid it out:
“They got parents of kids who did not have autism to lie and claim that their children did have autism. Then they had other parents get their kids or themselves trained up with this, you know, 40-hour fly-by-night course to be a so-called expert on this, and they would take the kids and babysit them. It’s one big scam.”
Fake diagnoses. Fake experts. Fake services. Real money — $400 million of it — flowing to criminals who then bought luxury cars, real estate in Nigeria and Somalia, and potentially funded terrorist organizations.
A program meant to help autistic children became a massive theft operation.
$822 Million in Documented Fraud — And Counting
The Department of Justice has documented $822 million in fraud from Minnesota programs:
- $300 million from Feeding Our Future
- $220 million from autism program fraud
- $302 million from Housing Stabilization Program
That’s just the documented amount. The actual losses are likely far higher.
Assistant U.S. Attorney Joseph Thompson said it plainly at Thursday’s press conference: Half of $18 billion in federal funds supporting 14 Minnesota programs has been lost to fraud.
“People come from all over the world to steal millions from U.S. government Medicaid, housing, and other programs,” Thompson added.
Come from all over the world. Minnesota has become a destination for international fraud operations.
The “Rinse and Repeat” Strategy
Oz explained how the fraud metastasized:
“These accusations started several years ago on some of the earlier programs that during COVID were created to feed kids. When these folks found out that no one was watching, they began to take that same tactic and rinse and repeat it over and over again to defraud us in other areas.”
The Feeding Our Future scam proved the concept: Minnesota wasn’t monitoring anything. The money flowed freely. Nobody asked questions.
So the criminals expanded. Same tactics, new programs. Autism services. Housing assistance. Medicaid. Anything with federal money attached.
Fourteen different programs. Fourteen opportunities to steal. And Tim Walz’s administration apparently watching none of it.
“Fix This in 60 Days or Start Looking Under Your Couch”
Dr. Oz already put Walz on notice.
“If we’re unsatisfied with the state’s plans or cooperation, we’ll stop paying the federal share of these programs,” Oz wrote. “The message to Walz is clear: either fix this in 60 days or start looking under your couch for spare change, because we’re done footing the bill for your incompetence.”
That’s not diplomatic language. That’s a threat — and one Oz has the authority to execute.
CMS controls Medicaid funding. If Minnesota can’t demonstrate it’s stopping the fraud, federal dollars stop flowing. Let Walz explain to Minnesota voters why their programs are being cut because his administration couldn’t bother preventing theft.
Walz’s “Damage Control” Response
Facing federal pressure, Walz announced a “Director of Program Integrity” position.
One person. To fix billions in fraud across 14 programs.
This is damage control theater. Walz ignored warnings for years. His employees — 500 of them — accused him of “systematically retaliating against whistleblowers.” He did nothing while criminals looted every program they could find.
Now he creates one position and expects the feds to be satisfied?
Dr. Oz isn’t buying it. And the 60-day clock is ticking.
Where the Money Went
The stolen funds didn’t disappear. They bought:
- Real estate in Kenya
- Apartments in Nairobi
- Land in Turkey
- Mansions in Minneapolis
- Luxury cars
- Property in Nigeria and Somalia
Some of it allegedly went to al-Shabaab, the al-Qaeda-linked Somali terror group.
American taxpayer dollars, stolen from programs meant to help children and the homeless, funding terrorism overseas and luxury lifestyles for criminals.
That’s what Tim Walz allowed to happen on his watch.
“No One Was Watching the Till”
Oz’s diagnosis of the problem is damning:
“There are 14 of these different projects that Minnesota got permission from us to do some advanced work on, progressive work. It doesn’t seem like they’re able to monitor well the financial implications of these, so they’re getting taken for a ride, and no one seems to have been watching the till.”
Minnesota wanted permission for “progressive” programs. The federal government granted waivers. Minnesota then failed to monitor any of it.
The state asked for flexibility and used it to enable theft. They wanted credit for innovative programs while doing none of the oversight those programs required.
Programs That “Sound Great” — Until They’re Weaponized
Oz acknowledged that the underlying programs had good intentions:
“A person is homeless, get them a place to stay for a little bit when they leave the hospital. Help transport people without the opportunity to get to a clinic visit so they can get that care. Advanced ways of helping children with autism cope with life by giving them services. It all sounds great, doesn’t it?”
It does sound great. And that’s exactly what fraudsters exploit.
“But if you weaponize that by allowing unscrupulous people to get access to the kitty, they’ll take you for a ride.”
Good intentions don’t prevent theft. Oversight does. Minnesota had the intentions and none of the oversight.
The “Bigger Lesson” for Government
Oz said Minnesota should teach officials everywhere a lesson:
“When you find fraud — and fraudsters are good at finding it — they’ll milk it for as long as they can. So you have to come down hard.”
The fraud didn’t stop because nobody stopped it. Criminals found a vulnerability and exploited it until they got caught. In Minnesota’s case, that took years and cost billions.
Every state running federal programs should be asking: Are we Minnesota? Are criminals exploiting our systems while we look the other way?
The Trump administration is asking those questions. States that can’t answer them should expect the same treatment Walz is getting.
The Housing Program Is Already Shut Down
Oz already took action on the housing program:
“The fraud in the housing program, which I shut down, is undebatable. That’s just not going to happen anymore.”
$302 million stolen from housing assistance. Program terminated.
More shutdowns are coming if Minnesota can’t demonstrate it’s capable of basic financial oversight.
60 Days
Tim Walz has 60 days to fix a fraud problem that took years to build.
He has to demonstrate real oversight, not a single “Director of Program Integrity.” He has to show criminals are being prosecuted, not just investigated. He has to prove federal money is going where it’s supposed to go.
If he can’t — or won’t — federal funding gets cut.
Dr. Oz isn’t playing games. The Trump administration isn’t accepting excuses. And Minnesota’s billion-dollar fraud epidemic is finally getting the response it deserves.
“You have to come down hard.”
They are.
