A Sprawling Fraud Scandal Puts Minnesota’s Somali Community in the Spotlight
Quick Summary
Federal prosecutors allege over $1 billion in fraud in Minnesota’s social-services system, leading to nearly 60 convictions.
The fraud cases, which began in 2022, include schemes in child nutrition, housing, and autism-services programs.
House Republicans launched an investigation into the handling by the administration of Gov. Tim Walz of the widespread fraud allegations.
An artificial-intelligence tool created this summary, which was based on the text of the article and checked by an editor. Read more about how we use artificial intelligence in our journalism.
- Federal prosecutors allege over $1 billion in fraud in Minnesota’s social-services system, leading to nearly 60 convictions.
Massive fraud blamed on dozens of Minnesota residents of Somali descent has jumped to national attention, with House Republicans launching an investigation into how pervasive corruption in the state’s social-services system was allowed to fester under Democratic Gov. Tim Walz’s administration.
The probe by the GOP-led House Oversight Committee deepens scrutiny of the scandal in Minnesota, where federal prosecutors say the fraud exceeded $1 billion and that dozens of people bilked taxpayers by setting up scam social-services companies. Close to 60 defendants have been convicted, and federal prosecutors last week charged the 78th person in a prong of the cases that authorities called “the largest Covid-19 fraud scheme in the country.”
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Years after some of the Minnesota fraud cases came to light, the issue has stirred up the governor’s race and drawn in President Trump. On social media, he called the state “a hub of fraudulent money laundering activity” and said he would immediately end temporary protected status for Somali immigrants in Minnesota.
“Somali gangs are terrorizing the people of that great State, and BILLIONS of Dollars are missing,” he wrote. “Send them back to where they came from. It’s OVER!”
Ahmed Samatar, a Somali-American international relations professor at Macalester College in Minnesota, condemned the alleged fraud. “A small group of Somali-Americans here in Minnesota have engaged in what I think is a despicable act,” he said. “It is civic betrayal, particularly for a state that has welcomed the Somalis with enormous generosity.”
He also criticized what he called Trump’s “unhinged” comments about the community. Most people of Somali descent are law-abiding and have made big contributions as doctors, nurses and other professionals, he said, adding that as a Somali-American himself, he has educated countless American students over four decades.
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The sprawling fraud cases began in 2022, under the Biden administration, when the U.S. Attorney’s Office in Minneapolis charged 47 defendants with allegedly exploiting a federally funded child nutrition program during the Covid-19 pandemic.
Prosecutors said defendants claimed to open feeding sites across Minnesota that served thousands of children, and submitted bogus rosters of kids to receive government funds. In fact, prosecutors said, no meals were served at many sites, which in some cases were parking lots or vacant commercial spaces.
One 24-year-old defendant, who was sentenced last month to 10 years in prison after being convicted at trial, took in more than $900,000 in fraud proceeds, prosecutors said, and spent some of it on a honeymoon in the Maldives, $30,000 on jewelry in Dubai and $64,000 for Dodge Ram pickup truck.
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The cases expanded to include fraud in Minnesota’s housing and autism-services programs.
Luxury cars
In September, federal prosecutors charged eight defendants with illegally pocketing $300,000 to $400,000 each from a federally-funded program that provides housing for people with disabilities and substance-use disorders. Some defendants used the money for real estate in Kenya and luxury cars, prosecutors said. It was relatively easy for companies to enroll in the program, whose payouts ballooned from $21 million in 2021 to $104 million in 2024, prosecutors said.
Also in September, prosecutors charged a 28-year-old woman with wire fraud for allegedly participating in a scheme to defraud a state program that aids young people with autism. A company she registered bilked the state of more than $14 million from 2019 to 2024 by pretending to provide necessary treatment, prosecutors alleged.
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The defendant and other company owners allegedly paid kickbacks to parents in the Somali community to enroll their children for treatment, including children who didn’t previously have an autism diagnosis, prosecutors alleged.
“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,” Joseph Thompson, then acting U.S. attorney for Minnesota, said at the time. “Each case we bring exposes another strand of this network.”
In October, Minnesota said the housing program was being terminated “due to widespread fraud.” Days earlier, Walz also paused payments for 14 state Medicaid programs and ordered a third-party audit of them to look for signs of “suspicious billing activity.”
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“If you attempt to defraud our public programs and steal taxpayer dollars out from under the people who need them most—you will be stopped, and you will be held accountable,” Walz said at the time. His office didn’t respond to a request for comment Thursday.
Walz faces growing criticism within the state. The Democratic Party’s vice presidential nominee last year, he is seeking a third term as governor.
“This is probably the tip of the iceberg,” Minnesota House Speaker Lisa Demuth, a Republican who is running for governor, told Fox News. “This falls squarely on his shoulders.”
‘Bleeding heart’
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The fraud cases took on yet another dimension after a Nov. 19 report in a magazine published by the Manhattan Institute, a conservative think tank, alleged that millions of dollars in stolen funds from Minnesota were sent to Somalia and ended up with al-Shabaab, the Somali branch of al Qaeda. The report, co-written by conservative activist Christopher Rufo, blamed Minnesota’s “bleeding-heart bureaucracy” and “cynically deployed” accusations of racism against people who raised concerns about problems in the nutrition program.
U.S. House Speaker Mike Johnson (R., La.) shared the report, and on Nov. 21, Trump referenced fraud in Minnesota and said he would revoke the temporary protected status for Somalis there, a move that would affect several hundred people.
Treasury Secretary Scott Bessent said on X that his agency would investigate allegations that “hardworking Minnesotans’ tax dollars may have been diverted to the terrorist organization Al-Shabaab.”
The House Oversight Committee this week requested documents from Walz and Minnesota Attorney General Keith Ellison, also a Democrat, relating to the fraud accusations, giving them until Dec. 17 to respond.
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The committee “has concerns that you and your administration were fully aware of this fraud and chose not to act for fear of political retaliation,” committee Chairman James Comer (R., Ky.) wrote in a letter to Walz this week. It referenced a Nov. 29 New York Times article on the sweeping Minnesota scandal.
Walz said “we welcome” efforts to root out fraud but criticized rhetoric the governor said was “demonizing an entire population.” Minnesota is home to around 80,000 people of Somali descent. About 40,000 state residents were born in Somalia, according to 2024 estimates from the U.S. Census Bureau. Among them is Rep. Ilhan Omar, a Democrat whose district includes Minneapolis and some surrounding suburbs.
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Trump has sought to broaden his scrutiny of legal immigration from poorer countries, following the Nov. 26 shooting of two National Guard members—one of whom died—in Washington, D.C., allegedly by an Afghan refugee.
After the shooting, Trump again singled out Somali immigrants in Minnesota, saying they were “ripping apart that once-great state.”
Sen. Amy Klobuchar (D., Minn.) on Sunday defended Minnesota’s Somalis on CNN, saying they “work in our schools, work in our airports, help take care of our seniors.”
“Every state has a problem with crime,” she said, “but what the president has done here is taken a horrific crime that occurred in Washington, D.C.,…and then he went 2,400 miles away to Somalia and somehow indicted an entire group of people, 80,000 of them in my state.”
Write to Scott Calvert at scott.calvert@wsj.com and Jeanne Whalen at Jeanne.Whalen@wsj.com
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