A fraud scandal centered around Minnesota’s Somali community has become one of the most significant cases of welfare theft in American history, with prosecutors claiming that more than $9 billion in taxpayer funds have been stolen from the state’s social service programs. The scale of the theft, equivalent to about ten times what Minnesota spends annually to run its entire Department of Corrections, has outraged the public and sparked a national debate over immigration policy, welfare oversight and the political calculations that may have allowed the fraud to persist for years.
Federal prosecutors report that 86 individuals have been charged with defrauding Medicaid and federal child nutrition programs, with 59 already convicted. According to the House Oversight Committee, the vast majority of those charged are citizens or legal residents of Somali descent. The cases present a pattern of fraud that prosecutors say has become embedded within portions of Minnesota’s Somali diaspora, creating what one investigator described as a “playbook” passed among fraudsters who learned how to bilk the state systematically.
The mechanics of the fraud schemes followed a consistent pattern across multiple programs. Individuals would set up companies and register sites claiming to provide services to children, either meals during the pandemic or ongoing childcare and therapy. These operators would then submit invoices to state agencies showing they had fed or cared for large numbers of children, often using fabricated attendance rosters. In one particularly brazen example, prosecutors discovered that operators had generated fake names for children by using a website called “listofrandomnames.com.” State agencies, overwhelmed by applications and hesitant to scrutinize claims too closely for fear of appearing discriminatory, would process the invoices and send reimbursement checks. In reality, many of the facilities had few or no children present; some appeared to be completely shuttered, with blacked-out windows and no signs of activity. The money that should have gone to feeding or caring for vulnerable children instead went into the pockets of the operators, who spent it on luxury vehicles, expensive homes and even real estate investments abroad. In the autism treatment schemes, providers would recruit families to bring in children who didn’t actually have autism, falsely certify them as needing therapy, pay the parents kickbacks of up to $1,500 per month per child and then bill Medicaid for intensive one-on-one behavioral health therapy that was never provided.
The largest single scheme involved a Minneapolis nonprofit called Feeding Our Future, which claimed to provide meals to tens of thousands of children during the COVID-19 pandemic. Instead, prosecutors say, most meals were nonexistent, and business owners spent the stolen $250 million on luxury cars, mansions and real estate projects abroad. Former Attorney General Merrick Garland called it the country’s largest pandemic relief fraud scheme.
Perhaps most troubling to investigators is evidence suggesting that the fraud persisted partly because state officials feared accusations of racism. When Minnesota Department of Education officials began asking questions about suspicious invoices in 2020, Feeding Our Future warned that failing to approve new applicants from “minority-owned businesses” would result in a lawsuit featuring racism accusations “sprawled across the news.” The group later sued the agency, which then continued processing claims and approving new sites rather than risk public accusations of discrimination.
Kayseh Magan, a Somali American who worked as a fraud investigator for the Minnesota attorney general’s office, said elected officials were often afraid to take assertive action. “There is a perception that forcefully tackling this issue might cause political backlash among the Somali community, which is a core voting bloc for Democrats,” he explained.
Joseph H. Thompson, the federal prosecutor overseeing the fraud cases, said race sensitivities played a major role in allowing the fraud to flourish, particularly as pandemic assistance was being disbursed while Minnesota reeled from George Floyd’s killing in May 2020. “This was a huge part of the problem,” Thompson said. “Allegations of racism can be a reputation or career killer.” He warned that, “no one will support these programs if they continue to be riddled with fraud. We’re losing our way of life in Minnesota in a very real way.”
Minnesota is home to the largest Somali community in the United States, with approximately 80,000 residents. Between 1990 and 2025, an estimated 140,000 to 167,000 Somali immigrants settled in the United States, up from just 2,500 in 1990, primarily through refugee resettlement following Somalia’s descent into civil war.
President Trump has seized on the scandal as vindication of his immigration policies, calling Minnesota “a hub of fraudulent money laundering activity” and suggesting that Somali perpetrators should be sent “back to where they came from.” Those remarks have drawn criticism from civil rights advocates, who say the language mirrors xenophobic tropes and stigmatizes immigrant communities. The Trump administration has dispatched federal officers to Minnesota, halted federal taxpayer dollars for child care payments to the state, and made the fraud cases a centerpiece of its broader immigration enforcement efforts. The Department of Homeland Security declared it “will not stop until we’ve rooted out this rampant fraud plaguing Minnesota.”
Citizen journalists have also impacted this debate. Conservative social media personality Nick Shirley recently filmed a viral video that showed shuttered daycare centers, run by members of the Somali community, that had received in excess of $100 million in funds. While there appeared to be some truth to his claims, Star Tribune reporter Jeff Meitrodt, who investigated this case, urged caution and noted that, while fraud was in fact rampant, at least one of the daycares Shirley visited was operational.
Governor Tim Walz, who ran as Kamala Harris’s Vice President in 2024, has come under intense criticism for the fraud. Republicans are accusing Walz of raising taxes while letting “fraud run wild.” Walz has defended his administration’s response, saying officials may have erred on the side of generosity during the pandemic but have since cracked down on fraud. His administration has also shut down the Medicaid- funded housing program altogether, acknowledging that it was riddled with fraud and could not be salvaged.
Walz has also attempted to turn the tables politically, accusing Trump of politicizing the issue to defund programs that help Minnesotans, claiming “this has been his plan all along.” Still, on Jan. 5th, Walz announced that he will not be seeking reelection for Governor.
Many Somali Americans say they are unfairly bearing the stigma of crimes committed by a small group. Jaylani Hussein, Minnesota director of the Council on American-Islamic Relations, claimed that the fraud victimized low-income Somali families who depend on these programs and described the Somali community as a success story of immigration that was being targeted because of their achievements.
As the federal investigation continues, prosecutors say they are investigating over a dozen additional programs for potential fraud. Thompson, the federal prosecutor overseeing the fraud cases, warned that “what we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never-ending.” The GOP has already weaponized the scandal against big government welfare programs and open border immigration, while Democrats struggle to articulate support for large-scale welfare without seeming to sanction the fraud that has infiltrated it. Recently, the controversy has widened further, generating a new scandal centered on federal ICE tactics in immigrant communities and intensifying scrutiny of how enforcement practices intersect with political accountability. Additionally, the recent killings of Alex Pretti and Renee Good have fueled increased outrage and the withdrawal of over 700 ICE agents from Minneapolis. The political fallout from this case is likely to extend into the 2026 midterm elections.
