<\/p>\n
MINNEAPOLIS (AP) – About half or more of the roughly $18 billion in claims paid out by Medicaid to Minnesota-run programs may have been fraudulent, and at least 14 programs were likely exploited, a federal prosecutor said Thursday.<\/p>\n
First Assistant U.S. Attorney Joe Thompson said the scale of fraud in Minnesota outpaces that of other states and puts services at risk for people who really need them.\u00a0<\/p>\n
While prosecutors typically see fraud manifest as providers overbilling, Thompson said during a news conference in Minneapolis that companies have been created to provide zero services while pocketing federal funds for international travel, luxury vehicles and lavish lifestyles.<\/p>\n
\u201cThe magnitude cannot be overstated,\u201d Thompson said. \u201cWhat we see in Minnesota is not a handful of bad actors committing crimes. It\u2019s staggering, industrial-scale fraud.\u201d<\/p>\n
The investigators\u2019 new findings may bolster President Donald Trump in his claims that Minnesota is a \u201chub of fraudulent money laundering activity\u201d under Gov. Tim Walz, who was the Democrats\u2019 vice presidential nominee in last year\u2019s presidential election.\u00a0<\/p>\n
Trump has capitalized on the fraud cases to target the Somalian diaspora in Minnesota, calling them \u201cgarbage\u201d and saying he doesn\u2019t want immigrants from the East African country in the U.S.<\/p>\n
More than 90% of the people charged in the major fraud cases announced before today were of Somali descent, according to the U.S. Attorney\u2019s Office for Minnesota.<\/p>\n
Walz has denounced Trump’s comments, saying an audit due for completion by late January should give a better picture on the extent of the fraud. He said his administration is taking aggressive action to prevent fraud in the future. A spokesperson for Walz did not immediately respond to an email seeking comment Thursday.<\/p>\n
Five new defendants have been charged in connection with a Minnesota housing services fraud, Thompson said. Two of them pocketed $750,000 instead of helping Medicaid recipients find stable housing, he said. Prosecutors allege they used the proceeds to travel to international destinations, including London, Istanbul and Dubai.<\/p>\n
One defendant submitted $1.4 million in fraudulent claims, using some of the funds to purchase cryptocurrency, Thompson said. Federal officials say he fled the country after receiving a subpoena.\u00a0<\/p>\n
The five charged include two Philadelphia residents who have been accused of \u201cfraud tourism\u201d after they registered as Minnesota providers, Thompson said, adding that for them the scheme was \u201ceasy money.\u201d<\/p>\n
They join eight others charged in September for their alleged roles in the scheme to defraud the Minnesota Housing Stability Services Program.<\/p>\n
Prosecutors also named a new defendant accused of defrauding another state-run, federally funded program that provides services for children with autism, alleging he submitted millions of dollars worth of claims for Medicaid reimbursement. One woman previously charged for exploiting that program pleaded guilty Thursday morning, officials said.<\/p>\n
Asked who is to blame, Thompson said the state \u201chas not done a good job of mining these programs.\u201d\u00a0<\/p>\n
Copyright 2025 The Associated Press. \u00a0
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