At least 14 state-run programs in Minnesota have been flagged for fraud, a prosecutor said Thursday as he announced new charges in several schemes.
First Assistant U.S. Attorney Joe Thompson said during a news conference that federal officials suspect a significant portion of roughly $18 billion paid out by Medicaid to Minnesota programs was fraudulent.
“What we see in Minnesota is not a handful of bad actors committing crimes,” Thompson said. “It’s swamping Minnesota.”
Investigators’ new findings may bolster President Donald Trump in his claims that Minnesota is a “hub of fraudulent money laundering activity” under Gov. Tim Walz, who was the Democrats’ vice presidential nominee in last year’s presidential election.
Trump has capitalized on the fraud cases to target the Somalian diaspora in Minnesota, calling them “garbage” and saying he doesn’t want immigrants from the East African country in the U.S.
Thompson said 14 state-run programs have been flagged as having significant fraud problems, and many of the defendants were getting money from multiple Medicaid programs.
“What we’re seeing is programs that are entirely fraudulent,” he said.
Five new defendants have been charged in connection with a Minnesota housing services fraud, Thompson said. Two defendants pocketed $750,000 instead of helping Medicaid recipients find stable housing, he said. Prosecutors allege they used the proceeds to travel to international destinations, including London, Istanbul and Dubai.
One defendant submitted $1.4 million in fraudulent claims, using some to purchase cryptocurrency, Thompson said. Federal officials say he fled the country after receiving a subpoena.
The five new defendants join eight others charged in September for their alleged roles in the scheme to defraud the Minnesota Housing Stability Services Program.
Prosecutors also named a new defendant accused of defrauding another state-run, federally funded program that provides services for children with autism, alleging he submitted millions of dollars worth of claims for Medicaid reimbursement. One woman previously charged for exploiting that program pleaded guilty Thursday morning, officials said.
He called Minnesota an outlier, saying that the scale of fraud outpaces that of other states and that he sees more red flags than legitimate business in the claims providers are submitting. Asked who is to blame, Thompson said the state “has not done a good job of mining these programs.”
The fraud puts government-run services at risk for people who really need them, Thompson said.
“There’s real patients, real clients, real people who need services and aren’t getting them,” he said.
