When news broke of the convictions for widespread fraud in several Minnesota pandemic programs, the $1 billion price tag and more than 90 charges were staggering. We now know that this is a very low estimate of the price Americans have paid to fund deeply corrupt, state-run welfare programs.
The criminal nature of the scandal rocked the country: A vast network of Somali nonprofits systematically ripped federal programs and denied Minnesota families essential services at the height of the pandemic. By defrauding nutrition, education and health care programs, the vast and sophisticated corporation has siphoned off billions in taxpayer dollars.
Thanks to lax oversight under Democrat Tim Walz, the governor of Minnesota, organized crime crept in and then flourished shamelessly. Even if there are dozens of whistleblowers repeatedly After raising his concerns with state regulators and his own office, Walz simply blamed racism and shrugged off the accusations.
The governor recently defended the state’s “generosity” that allowed Somali fraudsters to buy luxury cars, homes and vacations at the expense of hungry Minnesotans. The welfare state is widely regarded as a magnet for those who wish to become its beneficiaries. Alarmingly, Social Security is now the state’s largest annual expenditure—higher than education, highways and public safety.
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But new research has shown that fraud goes much deeper than initially suspected, including in the US Small Business Administration (SBA).
During the pandemic, the agency has made $1.2 trillion in loans, saving millions of small businesses and jobs. Much of those loans were legitimate, and many of the loans were forgiven, in accordance with the CARES Act legislation of 2020. But the program expanded in 2021 and became rife with fraud — at least $200 billion, much of which remained completely unsolved and largely forgiven under the Biden administration.
At my direction, SBA has launched an investigation to the Minnesota fraudsters. It took just days to source approximately $3 million in Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loans (EIDL) loans for numerous indicted nonprofits, including groups like Feeding our Future and Action for East African People.
With this disproportionate level of potential fraud – and continued allegations in other federal programs – we have expanded our scope to investigate every COVID-19 loan made in Minnesota. Within a few weeks, we uncovered as many as 13,600 PPP loans that were flagged for fraud but later approved, totaling approximately $430 million in potentially fraudulent funds that should have been used to save Main Street jobs and businesses. In many cases, the loans were completely forgiven.
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On December 23, I have informed The governor said the SBA has halted approximately $5.5 million in annual funding to Minnesota pending further review, in an effort to avoid taxpayer dollars in a state that clearly does not have the proper controls in place to responsibly manage federal funds. And we are actively working with our law enforcement partners to hold criminals accountable for the potential pandemic-era fraud now under investigation.
One thing is clear: The sheer scale of the fraud in Minnesota proves that the misuse of federal dollars is endemic to the state’s welfare system — and the logical consequence of socialist programs designed to siphon off funding without accountability. Other states need to take note.
The US Treasury Department has now done so rode to believe that some of the stolen pandemic funds went to Al-Shabaab, Somalia’s al Qaeda-backed terror wing. The U.S. Department of Agriculture has asked the state to recertify many SNAP recipients. Prosecutors believe at least half of the $18 billion the state has spent on Medicaid and related programs since 2018 was fraudulent.
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Americans have always known that Social Security leads to some degree of fraud, but in Minnesota—where socialist “generosity” is not a safety net but a way of life— criminal activity has taken root on an industrial scale.
Within a few weeks, we uncovered as many as 13,600 PPP loans that were flagged for fraud but later approved, totaling approximately $430 million in potentially fraudulent funds that should have been used to save Main Street jobs and businesses.
Accountability must be the result of these government-wide investigative efforts, including subpoenas, prosecutions, restitution, and prison sentences. But given the glaring failures in states like Minnesota, new welfare checks on federal programs, such as the work requirements included in the One Big Beautiful Bill Act, seem particularly prescient and urgent.
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With more than 80 federal welfare programs spending $1 trillion annually, there is a lot of work to be done. The Trump administration is aggressively pursuing bad actors and implementing reforms to protect welfare programs for real American families who need them — while ensuring they are a lifeline, not a lifestyle.
Minnesota leaders were not interested or able to accomplish this mission, and the developing scandals raise serious questions about what may be going on in states like California and Illinois. The Trump administration is determined to expose welfare abuse wherever it exists – and to enforce accountability in states that have allowed fraud to fester at the expense of law-abiding Americans and taxpayers.
