Minnesota faces an unprecedented wave of fraud that has drained billions from state coffers during Gov. Tim Walz’s administration.
Federal counterterrorism sources confirm that millions of dollars in stolen funds have been transferred to Somalia.
These funds ultimately reached the terror group Al-Shabaab. According to one confidential source, “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
Launched in 2020 to help vulnerable populations secure housing, The Minnesota Medicaid Housing Stabilization Services program featured low barriers to entry and minimal reimbursement requirements.
Officials initially estimated annual costs at $2.6 million.
Actual costs exploded beyond projections, however. City Journal reported that the program paid out more than $21 million in claims in 2021.
Annual costs then surged to $42 million, $74 million, and $104 million in subsequent years. During the first six months of 2025 alone, payouts reached $61 million.
Minnesota’s Department of Human Services terminated the HSS program on Aug. 1.
Officials noted that payment to 77 housing-stabilization providers had been stopped this year due to credible fraud allegations. Joe Thompson, then Acting U.S. Attorney for the District of Minnesota, stated that the “vast majority” of the program was fraudulent. Thompson announced criminal indictments for HSS fraud on Sept. 18.
Thompson indicated these indictments represent just the first wave of prosecutions. “Most of these cases, unlike a lot of Medicare fraud and Medicaid fraud cases nationally, aren’t just overbilling,” Thompson said at a press conference.
“These are often just purely fictitious companies solely created to defraud the system, and that’s unique in the extent to which we have that here in Minnesota.”
Many fraudulent firms operated from substandard locations.
Perpetrators targeted people recently released from rehab, enrolling them in Medicaid services they never intended to provide.
Thompson noted many company owners involved in HSS fraud operated multiple businesses billing various Medicaid programs.
“What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never ending,” Thompson said.
“I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away.”
Fraudsters have cultivated relationships with Minnesota’s elected officials.
Several individuals involved in Feeding Our Future donated to or appeared with Rep. Ilhan Omar, according to City Journal.
On Sept. 24, Thompson announced the first indictment in a federally funded autism services fraud case.
Asha Farhan Hassan, a member of Minnesota’s Somali community also charged in Feeding Our Future, allegedly participated in a $14 million fraud scheme targeting Minnesota’s Early Intensive Developmental and Behavioral Intervention program.
City Journal noted that autism claims to Minnesota Medicaid have skyrocketed. Claims rose from $3 million in 2018 to $399 million in 2023.
The number of autism providers increased from 41 to 328 over the same period.
Many in the Somali community established autism treatment centers, citing the need for culturally appropriate programming.
By the time authorities exposed the fraud, one in 16 Somali four-year-olds in the state had reportedly been diagnosed with autism—more than triple the state average.
“This is not an isolated scheme,” Thompson said.
“From Feeding Our Future to Housing Stabilization Services and now Autism Services, these massive fraud schemes form a web that has stolen billions of dollars in taxpayer money,” he added.
“Each case we bring exposes another strand of this network.”
