Prosecutor claims massive Medicaid fraud in Minnesota

He cites ‘staggering’ grift in the state, possibly helping back the president’s claims.

- BY HANNAH FINGERHUT AND GIOVANNA DELL'ORTO

About half or more of the roughly $18 billion in claims paid out by Medicaid to 14 Minnesota-run programs since 2018 may have been fraudulent, a federal prosecutor said Thursday.

First Assistant U.S. Atty. Joe Thompson said the scale of fraud in Minnesota outpaces that of other states and puts services at risk for people who really need them.

While prosecutors typically see fraud manifest as providers overbilling, he said, companies have been created to provide zero services while pocketing federal funds for international travel, luxury vehicles and lavish lifestyles.

“The magnitude cannot be overstated,” Thompson said during a news conference in Minneapolis. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”

The investigators’ new findings may bolster President 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 election.

Trump has capitalized on the fraud cases to target the Somalian diaspora in Minnesota, which has the largest Somali population in the U.S. The majority of the defendants in the child nutrition, housing services and autism program schemes are Somali Americans, and most are U.S. citizens.

Five new defendants were charged Thursday in connection with a Minnesota housing services fraud, in which they pocketed the money instead of helping Medicaid recipients find stable housing, Thompson said. One defendant fled the country after his company received a federal grand jury subpoena, the prosecutor said.