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Massive Medicaid fraud scheme puts Minnesota’s federal funding at risk — and fallout could widen
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Minnesota is facing threats that the federal government may pull its funding for Minnesota’s Medicaid program until it cleans up its act amid investigations into multiple alleged fraud schemes plaguing the state’s social services system.
Minnesota is coming under heightened scrutiny as President Donald Trump has labeled Minnesota a «hub of fraudulent money laundering activity,» due to several key fraud schemes targeting the state’s Medicaid program, and other federally funded programs that feed children. More than 80 people have faced charges in the state in connection with these schemes.
Chris Edwards, the Kilts Family Chair in Fiscal Studies at the libertarian think-tank the Cato Institute, said that federal-state funding programs are ripe grounds for fraudulent activity.
«Federal aid-to-state programs are especially vulnerable to fraud and scams because the Feds mainly pay for them,» Edwards said in a Tuesday email to Fox News Digital. «The states administer and they care little about waste because the Feds are paying. The states would have more incentive to run efficient programs if they were funded by state taxes. The states must balance their budgets every year, so politicians must make tradeoffs and focus on efficiency.»
«By contrast, the federal government runs massive deficits, so the politicians don’t care much about waste,» Edwards said. «There’s a double-problem with aid-to-state programs: the states don’t care about waste because it’s federal money, and the Feds don’t care either because they run massive deficits.»
MINNESOTA FRAUD SCHEME UNEARTHS MILLIONS IN LUXURY PROPERTY, CARS: DOJ
A protestor holds a sign at protect Medicaid lights up Capitol amid budget showdown, on May 07, 2025 in Washington, DC. (Leigh Vogel/Getty Images for Caring Across Generations)
Included in this series of alleged fraud schemes is one stemming from a new program known as the Housing Stability Services Program, which offered Medicaid coverage for housing stabilization services in an attempt to help those with disabilities, mental illnesses, and substance-use disorders receive housing.
The Justice Department so far has charged less than a dozen people for allegedly defrauding the program that runs through Minnesota’s Medicaid service, but more charges are expected.
Additionally, the Trump administration and lawmakers have launched probes into Minnesota’s «Feeding Our Future» $250 million fraud scheme that allegedly targeted a children’s nutrition program the Department of Agriculture funded and that Minnesota oversaw during the COVID-19 pandemic. At least 77 people have been charged in that scheme, which took advantage of the U.S. Department of Agriculture’s decision to waive certain Federal Child Nutrition Program requirements.
Some fraud cases in Minnesota have collapsed though, and Hennepin Country judge overturned a guilty verdict for Abdifatah Yusuf in a Medicaid fraud case in November. Minnesota Attorney General Keith Ellison announced in August that Yusuf was found guilty of six counts of aiding and abetting theft by swindle, and claimed that Yusuf used his agency Promise Health Services, LLC to fraudulently obtain Medicaid funds for services that were not provided or were billed based on inaccurate documentation.
Minnesota is dependent on the federal government for a significant portion of its funding. In 2023, federal funding toward Minnesota’s Medicaid program totaled $11 billion — amounting to roughly 58% of all federal funding Minnesota receives, according to the House’s Energy and Commerce Committee. Ultimately, the federal government covers approximately 51% of Minnesota’s Medicaid costs.
In every state, the federal government splits Medicaid costs using the Federal Medical Assistance Percentage formula, which is calculated by comparing the state’s per capita income to U.S. per capita income. Percentages determining how much the federal government covers vary by state, with the federal government absorbing between 50% of Medicaid costs in states like California and Colorado, and up to nearly 77% in Mississippi, according to the Congressional Research Service.
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It’s unclear exactly how many federal dollars went toward fraudulent providers in Minnesota. The U.S. Centers for Medicare & Medicaid told Fox News Digital Tuesday that an audit will further examine how federal funds were used.
«CMS is using all our resources to investigate and address this egregious fraud scheme in Minnesota…As part of a comprehensive audit, CMS will isolate how much of these funds were misused,» CMS spokeswoman Catherine Howden said in a statement to Fox News Digital. «Given the complexity of this situation, along with Minnesota’s lack of transparency, this review will be complex and time intensive.»
Minnesota’s Department of Health and Human Services did not respond to a request for comment from Fox News Digital by deadline.
Edwards said that it is easier than ever for criminal gangs to partake in these fraudulent schemes, due to the fact that benefits and subsidies are now paid automatically by federal computers, rather than through paper forms.
«The only solution is to devolve these federal-funded programs to the states and let them fund,» Edwards said. «There is no magic money tree in Washington. Welfare programs should be funded and administered at the state level.»
TIM WALZ CALLED OUT BY WASHINGTON POST FOR REFUSING TO TAKE RESPONSIBILITY FOR MINNESOTA FRAUD SCANDAL
In September, the Justice Department announced that it had charged eight defendants with wire fraud for their roles in the Housing Stability Services Program Medicaid fraud scheme. Acting U.S. Attorney Joseph Thompson said in a statement that the charges marked the «first wave» expected in connection with the case.
«I want to be clear on the scope of the crisis,» Thompson said in a statement in September. «What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never ending. I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away.»
In July 2022, Minnesota stood up its Housing Stability Services Program, which offers Medicaid coverage for housing stabilization services. But instead, those charged in September obtained and «misappropriated millions of dollars in program funds that were intended as reimbursements for services provided to those people,» according to the Justice Department.
MINNESOTA’S $70 MILLION FRAUD EXPOSES HOW DEMOCRATS BUILT A SYSTEM DESIGNED TO BE ROBBED
Tim Walz speaks onstage durning 2025 SXSW Conference and Festival at the Austin Convention Center on March 08, 2025 in Austin, Texas. (Tibrina Hobson/Getty Images)
Although the Housing Stability Services Program was expected to cost $2.6 million annually, the program paid out $42 million in 2022, $72 million in 2023, and $104 million in 2024.
Ultimately, a federal investigation found that many program providers had defrauded the system by acquiring names of program-eligible beneficiaries from addiction treatment centers and other facilities, and then used those individuals’ information to send in bogus reimbursement claims — ultimately raking in taxpayer money fraudulently, per the Justice Department.
Among those charged in September in connection to the Housing Stability Services Program were Moktar Hassan Aden, 30; Mustafa Dayib Ali, 29; Khalid Ahmed Dayib, 26; and Abdifitah Mohamud Mohamed, 27. Together, they allegedly enrolled Aden’s company Brilliant Minds Services LLC as a Housing Stability Services Program provider in April 2022 and then claimed that they provided program-reimbursable consultation services, the Justice Department said.
Altogether, Brilliant Minds submitted reimbursement claims racking up to $2.3 million between September 2022 and April. Each defendant allegedly pocketed between $300,000 and $400,000 between April 2023 and May 2025 through Brilliant Minds, according to the Justice Department.
TREASURY SECRETARY LAUNCHES PROBE INTO MINNESOTA TAX DOLLARS ALLEGEDLY FUNDING AL-SHABAAB TERRORISTS
Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz issued a stern warning to Minnesota Gov. Tim Walz Friday, and threatened to slash federal Medicaid funding unless Minnesota restored the «integrity» of its program.
Specifically, Oz said that more than $1 billion had been stolen through the alleged fraud scheme within Minnesota’s Somali community, and asserted that some of the funds «may have even made its way to the Somalian terrorist group (al-Shabab).»
«Our staff at CMS told me they’ve never seen anything like this in Medicaid — and everyone from Gov. Tim Walz on down needs to be investigated, because they’ve been asleep at the wheel,» Oz said.
WHAT TO KNOW ABOUT MINNESOTA’S ‘FEEDING OUR FUTURE’ FRAUD AT THE CENTER OF TRUMP’S LATEST CRACKDOWN
Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz on Friday warned Minnesota Gov. Tim Walz that the state could lose federal Medicaid funding if it does not «restore the integrity» of its program. (@DrOzCMS via X)
Walz’s office did not immediately respond to a request for comment from Fox News Digital.
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As a result, Oz said that Walz must send weekly updates on anti-fraud measures to the Centers for Medicare and Medicaid Services freeze enrollment of high-risk providers for six months, verify all current providers as «legitimate» or remove them, and send CMS a corrective action plan to prevent fraud in the future within the next 60 days.
«If we’re unsatisfied with the state’s plans or cooperation, we’ll stop paying the federal share of these programs,» Oz said.
Fox News’ Sophia Compton and Breanne Deppisch contributed to this report.
minnesota fraud exposed,somali immigrant community,white house,justice department,terrorism
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Rubio se reúne con el primer ministro Orbán en Hungría para impulsar acuerdos energéticos y reforzar la cooperación bilateral
El secretario de Estado de Estados Unidos, Marco Rubio, llegó a Budapest para reunirse con el primer ministro Viktor Orbán, en el tramo final de una gira por Europa marcada por la seguridad, la guerra en Ucrania y el respaldo político de Washington al líder húngaro en plena campaña electoral.
La visita se produce antes de las elecciones legislativas del 12 de abril en Hungría, donde Orbán enfrenta un desafío relevante por parte de la oposición. Las encuestas ubican al partido gobernante Fidesz por detrás del TISZA, encabezado por el dirigente opositor Péter Magyar.
Rubio aterrizó en la capital húngara el domingo por la noche y tiene previsto mantener conversaciones este lunes por la mañana con Orbán antes de regresar a Washington. La reunión sigue a su participación en la Conferencia de Seguridad de Múnich y a su visita a Bratislava, donde se habló con el primer ministro eslovaco Robert Fico, otro dirigente nacionalista cercano a la Casa Blanca.
El presidente estadounidense Donald Trump expresó su respaldo al mandatario húngaro días antes del encuentro. En una publicación en redes sociales, destacó que Orbán logró resultados “fenomenales” en Hungría y le deseó suerte de cara a los comicios de abril.
En Budapest, Rubio y el ministro de Exteriores húngaro, Péter Szijjártó, tienen previsto firmar un acuerdo de cooperación en materia de energía nuclear. Según el jefe de comunicación internacional del Gobierno húngaro, Zoltán Kovács, en la agenda también figuran los contactos sobre Ucrania y la cooperación bilateral.
Kovács señaló que ambos dirigentes debatirán “los esfuerzos por la paz” en Ucrania y otros asuntos estratégicos. Tras el encuentro, está prevista una rueda de prensa conjunta para informar sobre el resultado de las conversaciones.
Desde Bratislava, Rubio defendió la relación con Europa y el papel de Estados Unidos dentro de la alianza atlántica. En un mensaje dirigido a los socios europeos, afirmó: “No estamos pidiendo a Europa que sea un vasallo de Estados Unidos. Queremos ser su socio. Queremos trabajar con Europa. Queremos trabajar con nuestros aliados”.
Durante su intervención en la Conferencia de Seguridad de Múnich, el secretario de Estado pidió a los países europeos que se sumen a la estrategia de Trump frente a la inmigración masiva, en un discurso que también incluyó referencias a la defensa de la civilización occidental. Al mismo tiempo, buscó transmitir calma sobre la posición estadounidense respecto de la OTAN y Groenlandia.
En Hungría, el Gobierno considera que la guerra en Ucrania será uno de los temas centrales del encuentro. El ministro Szijjártó sostuvo que “los políticos europeos intentan socavar sistemáticamente los esfuerzos de Donald Trump para lograr la paz (en Ucrania)”, según el portal independiente 444.hu.
Orbán, que gobierna con mayoría absoluta desde 2010, mantuvo un discurso duro contra sus adversarios internos y externos en un acto reciente. Allí aseguró que continuará su lucha contra “organizaciones pseudo-civiles, periodistas, jueces y políticos comprados”. También atacó a la “maquinaria opresiva de Bruselas”, en referencia a las autoridades de la Unión Europea, con las que mantiene desacuerdos desde hace años.
Los líderes comunitarios cuestionan a su Gobierno por presuntas restricciones a las voces críticas en el poder judicial, el ámbito académico, los medios y la sociedad civil, además de acusarlo de atacar a las minorías. La cercanía política con Rusia y el vínculo con el presidente Vladimir Putin aumentan la tensión con Bruselas.
Hungría mantiene una fuerte dependencia energética de Moscú. El país adquiere de Rusia el 85% del gas y el 65% del crudo que consume. Tras una visita de Orbán a la Casa Blanca en 2025, Trump concedió a Hungría una exención a las sanciones contra las importaciones de petróleo y gas rusos vinculadas a la invasión de Ucrania.
En noviembre pasado, el primer ministro anunció que su país también recibió excepciones sin límite temporal a las sanciones estadounidenses contra las petroleras rusas Rosneft y Lukoil.
Orbán se convirtió en una figura destacada para muchos simpatizantes de Trump por su postura contra la migración durante la crisis de refugiados sirios. Desde entonces, visitó varias veces el resort Mar-a-Lago en Florida y sostuvo una relación política cercana con el mandatario estadounidense.
El líder húngaro figura entre los dirigentes que viajarán a Washington la próxima semana para asistir a la reunión inaugural de la denominada “Junta de la Paz” impulsada por Trump, una iniciativa que críticos consideran diseñada para competir con el Consejo de Seguridad de la ONU.
(Con información de EFE y AFP)
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Waltz calls UN a ‘cesspool for antisemitism’ as Trump administration pushes major reforms
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EXCLUSIVE: U.S. Ambassador to the United Nations Mike Waltz is calling for sweeping reform at the world body, placing the fight against antisemitism at the top of the agenda as the Trump administration pushes for changes across the institution.
In an exclusive on-camera interview, Waltz argued that confronting antisemitism should be a central pillar of any overhaul of the U.N., alongside a broader return to what he described as the organization’s core mission of peace and security.
«The U.N. has an atrocious history and record when it comes to antisemitism. Number one, it’s a cesspool for antisemitism in many ways,» Waltz said. «This administration is determined to fight it.»
TRUMP ADMIN WEIGHS TERRORISM SANCTIONS AGAINST UN PALESTINIAN AID AGENCY OVER HAMAS ALLEGATIONS
U.S Ambassador to United Nations Michael Waltz speaks with Israel’s Ambassador to the United Nations Danny Danon before a meeting of the United Nations Security Council to consider a U.S. proposal for a U.N. mandate to establish an international stabilization force in Gaza, at U.N. headquarters in New York City, Nov. 17, 2025. (Eduardo Munoz/Reuters)
He framed the issue as both urgent and historic, linking rising global antisemitism and the aftermath of the Oct. 7 Hamas terrorist attacks to what he said must be a renewed commitment inside international institutions.
«We have to live up to the mantra of never again,» Waltz said. «As we see antisemitism on the rise around the world… after October 7th, in particular, we have to live up to that mantra.»
Waltz pointed to Holocaust remembrance and survivor testimony as essential tools in combating denial and historical revisionism, saying education must be central to any U.N. response.
«It’s about education. It’s about fighting back on these ridiculous denials of the Holocaust,» he said. «But most importantly, while we still have them, it’s about hearing from the survivors and hearing their personal stories.»
Memorials at the site of the Oct. 7 Hamas terror attack on the Supernova music festival near Kibbutz Re’im, Israel, on Monday, May 27, 2024. (Kobi Wolf/Bloomberg via Getty Images )
He added that U.N. forums should elevate survivor testimony rather than political messaging.
«My recommendation to the U.N. is, get the diplomats and the politicians out of the way, let’s just hear from the survivors because their stories are compelling, they are tragic, they need to be heard and documented, and they certainly can’t ever be denied,» Waltz said.
The ambassador’s remarks come as the administration calls for broader structural reform at the United Nations, including changes to how it approaches development aid, humanitarian operations and leadership.
WALTZ TO ROOT OUT ANTISEMITISM, ELIMINATE ‘WOKE’ PROGRAMS, GET ‘BACK TO BASICS’ AT THE UNITED NATIONS
A view of the United Nations Headquarters building in New York City, United States on July 16, 2024. (Jakub Porzycki/NurPhoto via Getty Images)
Waltz said Washington wants to see a more focused institution centered on conflict prevention and peacekeeping, with less reliance on traditional aid frameworks.
«I see, and I think what the president sees, is a much more focused U.N. that we have taken back to the basics of promoting peace and security around the world and enforcing peace when conflict breaks out through its peacekeeping forces,» he said.
The push for reform comes against the backdrop of longstanding criticism from U.S. officials and watchdog groups over how Israel is treated within the U.N. system and concerns about antisemitism linked to some U.N.-affiliated bodies.
UNRWA, the U.N. agency responsible for Palestinian refugees, has faced mounting scrutiny in recent years. Reports by education monitoring organizations documented content in materials used in UNRWA-linked classrooms that delegitimizes Israel or includes antisemitic themes.
Media investigations after Oct. 7 further intensified attention on the agency, with allegations involving staff and militant ties triggering donor freezes and internal probes.
An independent review commissioned by the United Nations acknowledged neutrality challenges and recommended stronger oversight and vetting mechanisms.
ISRAEL’S NETANYAHU DEMANDS WESTERN GOVERNMENTS ACT TO BATTLE ANTISEMITISM: ‘HEED OUR WARNINGS’
Photos released by the Israeli Defense Force show three individuals that the Israeli military claims are Hamas terrorists inside an UNRWA compound in Rafah. (IDF)
Beyond UNRWA, critics have pointed to structural patterns across the U.N. system. Israel remains the only country assigned a permanent agenda item at the U.N. Human Rights Council, mandating discussion at every session.
At the General Assembly, Israel has frequently been the subject of more country-specific resolutions than any other state in many annual sessions.
Successive U.S. administrations have described that focus as disproportionate.
U.N. officials reject the characterization of institutional antisemitism, arguing that scrutiny reflects the scale and duration of the Israeli-Palestinian conflict and humanitarian concerns, and pointing to reforms underway within agencies including UNRWA.
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U.S. Ambassador to the United Nations Mike Waltz raises his hand to vote in favor of a draft resolution authorizing an International Stabilization Force in Gaza on Nov. 17, 2025. (Adam Gray/Getty)
Waltz said confronting antisemitism must remain a priority as the U.N. prepares for leadership changes and debates over its future direction. He placed combating antisemitism within that broader reform push, alongside other policy priorities and future leadership decisions at the world body.
«So those are just some of the things in addition to… taking on antisemitism… getting… good, strong leadership in the U.N. going forward that we hope to get done during our time here.»
anti semitism,united nations,israel,state department,holocaust
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