A Brief History of Fraud in Minnesota

“Minnesota is so rife with fraud that Trump had to send in ICE to handle it!”

So, obviously that argument doesn’t make sense. However, that hasn’t stopped it from being accepted as fact and repeated at scale. It’s not a secret that Minnesota’s social programs have a history of fraud – it was brought to light in 2019 and has been in the process of reform since.

In this post, I aim to examine the history of the fraud in MN, as well as dispel some rumors that have been used to disparage and discredit the officials here. To start with, I want to talk about Nick Shirley’s video that started the most recent rash of “fraud!” allegations.

Nick Shirley and his “Investigation”

I watched Nick Shirley’s video. It boiled my blood.

Nick Shirley shows up at the doors of a few Somali-ran daycare centers and attempts to “interview” the people who answer the door and gain entry to “validate there are kids present”. At some locations, no one is present. In all locations, the person answering the door is visibly uncomfortable and unsure of what to do.

Ya’ll. If two strange men and a cameraperson showed up at my kids’ daycare and asked to come inside, I sure as shit HOPE the teachers would tell them to take a hike.

Daycares are locked facilities for a reason, and parents have to sign a release for their kid’s photos to be taken and shared on social media or elsewhere.

If Shirley really wanted to look into the fraud, he could have called ahead and scheduled a tour. There is not a single daycare I’ve ever toured that would answer the door to a stranger and say “Oh yeah, come on in!”. Shirley’s sorry excuse at journalism makes me sick on behalf of the Somali community he was targeting.

Okay, now on to fraud in MN, historically speaking.

Fraud in MN – the History and Status

Another important disclaimer here: I think fraud should be investigated and prosecuted equally across the board. I’m not writing this in defense of fraud, to be sure. I’m writing this to dispel rumors about the fraud.

Using MPR’s timeline, the fraud clock in MN starts on March 13th, 2019.

“Two months after Walz replaces fellow DFLer Mark Dayton as governor, Legislative Auditor Jim Nobles releases a report on fraud in Minnesota’s Child Care Assistance Program (CCAP). Nobles’ review follows allegations reported by FOX 9 TV in 2018 that as much as $100 million in child care funds was being funneled overseas to a Somali terror group. While Nobles tells lawmakers that fraud in the program is a known problem, “we couldn’t find evidence to substantiate that there is $100 million in fraud in CCAP every year.” Nobles says he found no evidence that taxpayer funds were being sent to terrorists. “

5 days later, the Director of the MN Department of Human Services, Carol Ham, is put on administrative leave. Walz is quoted as saying, “We take this incredibly seriously. We are doing our own internal investigations, and our goal is to bring accountability to the system and move forward. And at this time, that’s about all I can say.”

In April 2020, Feeding our Future starts rapidly building up. By May 2021, the FBI started investigating the program, and by May 2022 the first conspirators please guilty. Overall, the program is estimated to have stolen $250M in state funding through their fraudulent scheme.

In another example of fraud being investigated and prosecuted, a December 2024 raid on Smart Therapy autism centers in Minneapolis and St. Cloud is executed. MPR states, “Feds allege that the operator of Smart Therapy in Minneapolis stole $14 million by recruiting parents in the Somali American community and “diagnosing” their children with autism regardless of the symptoms in a scheme to rip off Minnesota’s Early Intensive Developmental and Behavioral Intervention program. The operator of Star Autism Center in St. Cloud is alleged to have stolen $6 million in a similar manner”.

On January 3rd, 2025, Walz directs the Minnesota Bureau of Criminal Apprehension to create a centralized fraud investigation unit.

July 1st, 2025 saw new anti-fraud laws take effect in MN. This allows protection for whistleblowers and measures to freeze state payments to those suspected of fraud.

In August, 2025, DHS moves to terminate the problematic Housing Stabilization Services program.

On September 17th, 2025, Walz issues an executive order directing state agencies to take more action to prevent fraud. One day later, federal prosecutors charge with people with defrauding the Housing Stabilization Services program.

Then on December 12th, 2025, Walz appoints former Bureau of Criminal Apprehension Superintendent Tim O’Malley as the first “Director of Program Integrity” in state government. One week later, Walz calls the $9B fraud estimate “speculation” but still promises to take accountability.

Enter Nick Shirley. Dec. 26, 2025 – Conservative content creator Nick Shirley, with help from Minnesota Republicans, posts a video that alleges massive fraud in child care centers owned by Somali Americans. The state agency that oversees child care centers later determines that all nine sites that Shirley visited were “operating as expected.”  

That sums up the timeline listed on MPR. Since then, the following actions have been taken:

Payments have been suspended to businesses at “high risk” of fraud, adversely impacting legitimate businesses covered under these programs.

The Minnesota Department of Human Services has brought on 160+ more staff to help look for fraud with Medicaid Providers.

A federal review finds Minnesota’ rate of improper Medicaid payments is far below the national average.

For more, please visit the Program Integrity site.

Whatabout that Surplus?

As of 2023, MN had a surplus of approx. $17.5B. Many people are speculating that Walz somehow personally embezzled that surplus and is thus personally liable for tax fraud. Or something. I don’t really understand the argument other than it breaks down to “We hate Walz”.

So, what did happen to the surplus? Well, for starters, the two-year budget was increased about 40% to $72B. Major investments were made into K-12 education, health and human services, and transportation infrastructure. New initiatives like Paid Family and Medical Leave were funded, as well as free school meals and one-time tax rebates. Finally, some of the surplus was used for low-income family tax credits and reduction on the tax of Social Security Income.

Do I believe that the right answer would be to decrease overall taxes for all MN families? Yes. Do I support investing in transportation, K-12 education, free school lunches and paid family leave? Absolutely, YES.

Conclusion

Overall, I think it’s unfair to say that MN isn’t taking actions on its own to address alleged fraud. Yes, the fraud happened. No, Walz didn’t personally endorse or enable it, but he has taken accountability and done what I think he needed to do in order to properly address it. The surplus isn’t “missing”, it’s been used to better key area in the state for important members – kids, young families, and seniors.

What are your thoughts, dear reader?

Thanks for reading!