The federal investigation into fraud in Minnesota is unfortunately just the tip of the iceberg. The extent of fraud and corruption in state and federal government programs, along with the lack of proper controls to prevent fraud, can be one of the biggest problems Americans face.
In March, President Donald Trump issued an executive order creating a task force to root out fraud. It will be chaired by Vice President J.D. Vance, who will direct agencies to identify vulnerabilities in their systems to help prevent fraud before it happens. This is crucial.
When my team at Gingrich 360 investigated the widespread corruption in Minnesota, we were shocked by the amount of fraud and corruption that existed. We have posted an article about our findings.
As you may remember, Feeding Our Future in Minnesota is falsely claimed to serve 125 million meals to children and submit a false attendance record listing 2,040 children, only 20 of whom matched district school attendance records. The Minnesota Office of the Legislative Auditor’s June 2024 investigation found that the Department of Education ignored at least 30 complaints about Feeding Our Future and failed to verify its statements before approving funds.
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FBI and law enforcement officers raid Mini Childcare (formerly Mako Childcare) in south Minneapolis on Tuesday, April 28, 2026. Mini Childcare was one of 22 locations targeted Tuesday morning as part of a fraud investigation in Minnesota. (Anthony Souffle/The Minnesota Star Tribune via Getty Images)
When we investigated this, we discovered that this is not an isolated case.
A February 2025 Department of Health and Human Services audit of Colorado’s Department of Health found that the state’s Medicaid program made at least $7.3 million in payments on behalf of deceased enrollees.
A January 2026 report from the FCC Office of Inspector General found that between 2020 and 2025, $5 million in federal funds intended for subsidized internet for the poor was sent to nearly 117,000 deaths. Most alarmingly, many of these individuals were enrolled and claiming benefits in multiple states within the same month after their death.
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It is critical to shift the focus from recovering stolen money to preventing fraud altogether. While recovering stolen money is necessary, stopping fraud before it happens ensures government funds get to those who really need them.
The Government Accountability Office estimates that the federal government loses between $223 billion and $521 billion annually to fraud, based on data from fiscal years 2018 through 2022. As of 2024, the Treasury Department successfully prevented and recovered more than $4 billion in fraud and improper payments, a small portion of total losses.
Firstly, we must carry out checks before the money leaves the bank.
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The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the Pandemic Response Accountability Committee (PRAC) to oversee pandemic spending. As a test, the PRAC issued a fraud alert in June 2025 on social security numbers used to access relief funds from three programmes.
The committee sampled documents and asked the Social Security Administration three simple questions: Was the Social Security number valid? Do name and date of birth match? Was the individual still alive? This identified $79 billion in potential fraud involving 1.4 million stolen or invalid SSNs. If these checks had taken place before the pandemic, they could have prevented this massive fraud.
It is critical to shift the focus from recovering stolen money to preventing fraud altogether. While recovering stolen money is necessary, stopping fraud before it happens ensures government funds get to those who really need them.
Second, we need to ensure that different departments communicate effectively. The PRAC found more than 40,000 cases in which applicants reported higher income to the Small Business Administration than to Housing and Urban Development. This indicated possible fraud. Better information exchange could have brought this to light earlier.
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Third, we must use AI to prevent fraud before money leaves the treasury. The PRAC’s Fraud Prevention Engine assesses 20,000 requests per second to detect anomalies. Tests on 5 million SBA disaster loan applications found one case in which 100 applicants filed 450 applications in 24 states, raising $2.6 million.
Finally, we must strengthen existing controls, such as the Treasury Department’s Do Not Pay Initiative, which provides agencies with open access to databases to verify eligibility for payments.
Despite its potential, agency adoption and compliance are inconsistent. In fiscal year 2024, only 4% of agencies met regulatory requirements to access these databases. The Congressional Research Service reported that it is unclear how many agencies regularly use the databases and to what extent.
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HUD’s audit for fiscal year 2024 found inconsistencies in the database because a computer matching agreement with the Treasury Department expired in 2019. Even after HUD regained access in February 2025, HUD continued to use the database inconsistently.
The Do Not Pay Initiative faces limitations due to the Privacy Act of 1974, which slows data collection. In March 2025, President Trump issued an executive order expanding the program to more agencies and waiving the four-year contract requirement. While positive, the Treasury Department is still seeking authority to access data sources such as the National Directory of New Hires and Fair Credit Reporting Act information.
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The time has come for Congress and state legislatures to prioritize preventing government fraud before it occurs. At Gingrich 360, we wrote a white paper explaining this problem. We encourage everyone to read this to understand the full extent of the problem.
We simply cannot afford to let people steal billions of dollars from taxpayers.
Rachel Peterson is Director of Research and National Security Affairs Coordinator for Gingrich 360.
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