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Trump’s fraud czar nominee touts Minnesota blueprint to root out Obamacare fraud, senior scams
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The crackdown on fraud in Minnesota will serve as a blueprint for a new Department of Justice office focused on protecting taxpayer funds from scams, President Donald Trump’s pick to serve as the nation’s «fraud czar» explained in his nomination hearing Wednesday.
«The work in Minnesota has been pivotal. The work of the U.S. Attorney’s office there, and the personnel there, has been pivotal to highlighting the problems of fraud that permeate our taxpayer funded programs,» nominee to serve as assistant attorney general for a new Justice Department division tasked with rooting out fraud, Colin McDonald, said Wednesday.
«That sort of effort … is what the National Fraud Enforcement Division will be looking to do and scale to an extent that we’ve not seen before within the Department of Justice,» he continued.
Trump tapped McDonald as the nominee in January, just days after establishing the Department of Justice’s new division for national fraud enforcement that will «investigate, prosecute, and remedy fraud affecting the Federal government,» according to the White House. The new office follows a sweeping Minnesota fraud scandal, where hundreds of millions of dollars was allegedly swindled from taxpayers through welfare and social services programs.
Colin McDonald appeared before the Senate Judiciary Committee Wednesday morning, where lawmakers grilled the nominee about the new office, how it will operate and if it will operate independently of the White House. (Graeme Sloan/Getty Images)
«I will be working with the inspectors general community,» McDonald continued. «With our federal agencies and federal partners, with our state and local partners to ensure that we find the fraud where it’s occurring and that we have the resources to prosecute it, to investigate it and prosecute it, and ultimately ensure that the fraud that we’re seeing annually, perpetrated against these programs comes to an end.»
McDonald appeared before the Senate Judiciary Committee Wednesday morning, where lawmakers grilled the nominee about the new office, how it will operate and if it will operate independently of the White House.
Trump delivered his State of the Union address Tuesday evening and announced Vice President JD Vance will lead the administration’s «war on fraud.»
McDonald explained that his office will work to tackle all fraud bleeding taxpayers, citing Government Accountability Office data that estimates between $320 billion to $520 billion in taxpayer funds is lost to fraud on an annual basis.
«My commitment is to work tirelessly to build a division, a national fraud enforcement division, where no fraud is too big for the Department of Justice, and no fraud is too small for the Department of Justice,» he continued.
At the top of lawmakers’ minds were fraud concerns surrounding Obamacare and senior citizens.
Republican Texas Sen. John Cornyn cited that the Government Accountability Office could not reconcile over $21 billion in Obamacare marketplace subsidies in tax year 2023 during his questioning of McDonald.
Senator Chuck Grassley, a Republican from Iowa and chairman of the Senate Judiciary Committee, left, and Senator Dick Durbin, a Democrat from Illinois and ranking member of the Senate Judiciary Committee, during a confirmation hearing. (Graeme Sloan/Bloomberg via Getty Images)
HEAVILY-REDACTED AUDIT FINDS MINNESOTA MEDICAID HAD WIDESPREAD VULNERABILITIES
«I commit to working tirelessly to root out the sort of fraud that you’ve identified there, and to make sure that every single dollar that’s supposed to go to these programs actually goes to the programs, to the beneficiaries, the intended beneficiaries of these programs, and not to fraudsters. That is my commitment,» McDonald told Cornyn during the hearing regarding potential fraud surrounding Affordable Care Act subsidies.
Scams targeting the elderly also took the spotlight throughout the hearing. Judiciary Chair Chuck Grassley, R-Iowa, pressed McDonald on his efforts to protect seniors from scams, noting that America’s seniors lose $28 billion annually to financial schemes.
The fraud czar nominee pledged that the DOJ would work to protect seniors from the increasingly high-tech scams, which often include using artificial intelligence to confuse and swindle people, noting that the fraud affects entire families.
Quality Learning Center in Minnesota was found at the center of an alleged childcare fraud scandal in the state. (Madelin Fuerste/Fox News)
«It’s not just the grandmothers and the grandfathers, it’s also their family members who bear the weight of these scams and the fraud that’s perpetrated against them,» he said. «My grandmother, one of them, turns 89 years old in two days. And she has seen these … sorts of efforts toward her. And it’s a major issue that the Department of Justice is focused on, and we will be using all available tools to ensure that we combat that problem.»
The massive Minnesota fraud case has reverberated across the nation, with federal Republican lawmakers reinvigorating calls to tighten and monitor the release of taxpayer funds to various programs, most notably social and welfare offices.
DR OZ DETAILS ‘WEAPONIZATION OF FRAUD’ IN MINNESOTA, ESTIMATES TOTAL MEDICAID FRAUD TO BE $100 BILLION
Trump spotlighted the fraud in his State of the Union address Tuesday, claiming the scams are even worse in states such as California, Massachusetts, Maine.»
«When it comes to the corruption that is plundering — it really, it’s plundering America — there’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer. Oh, we have all the information,» Trump said Tuesday.
U.S. President Donald J. Trump delivers the first State of the Union address of his second term to a joint session of Congress in the House Chamber of the United States Capitol in Washington, D.C., on Tuesday, Feb. 24, 2026. Seated behind him are Vice President JD Vance and Speaker of the House Mike Johnson (R-LA). (Kenny Holston /Pool via Reuters)
«And in actuality, the number is much higher than that, and California, Massachusetts, Maine and many other states are even worse. This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe,» he continued, before naming Vance as the administration leader taking on fraud.
The White House referred Fox Digital to Trump’s State of the Union comments and McDonald’s testimony when approached for additional comment on the federal fraud crackdown efforts.
FEDERAL WELFARE SPENDING IS A FRAUD MAGNET — AND TAXPAYERS ARE PAYING THE PRICE
Vance joined Fox News’ «America’s Newsroom» Wednesday, and said his efforts will include a «full, whole government approach» to investigating fraud concerns, and enlisting the Justice and Treasury Departments to lead probe on fiscal records.
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«There’s a whole host of tools that we have that have never been used, and the president and I talked about this a couple of months ago and said, ‘What if we just did everything that we could to stop the fraud that’s being committed against the American taxpayer?’ The president said, ‘Great idea, let’s do it,’ and we’re going to work on that very aggressively over the next year,» Vance said.
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Murió Antonio Tejero, el militar que protagonizó el intento de golpe de Estado en España en 1981
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Legal experts and commentators toed a careful line Wednesday in responding to President Donald Trump’s State of the Union address, with many using the moment to weigh in on the broader legal and political climate itself, rather than Trump’s actual remarks.
Some of the biggest moments of Trump’s address included his response to the Supreme Court’s 6–3 ruling that invalidated his use of a 1977 emergency law to impose tariffs on most U.S. trading partners, as well as his administration’s crackdown on violent crime in major U.S. cities, among other things.
«This is the golden age of America,» Trump proclaimed Tuesday night. «And you’ve seen nothing yet. We’re going to do better, and better, and better.»
Trump struck a notably measured tone in responding to the Supreme Court’s tariff ruling during the State of the Union, briefly describing the 6–3 majority decision as «unfortunate» before pivoting to highlight the 10% import fees his administration had announced shortly after the high court’s ruling under Section 122 of the U.S. Trade Act of 1974.
«Countries that were ripping us off for decades are now paying us hundreds of billions of dollars,» Trump said of the tariffs, which he previously described as «life or death» for the nation’s economy.
Four of the nine Supreme Court justices present for the State of the Union, including Chief Justice John Roberts, Justice Elena Kagan and Justice Amy Coney Barrett, who had ruled against Trump’s use of IEEPA to enact his tariffs. ( Chip Somodevilla/Getty Images)
«The good news is that almost all countries and corporations want to keep the deal that they already made» with the U.S., Trump said Tuesday night, «knowing that the legal power that I as president have to make a new deal could be far worse for them.»
«Therefore, they will continue to work along the same successful path that we had negotiated before the Supreme Court’s unfortunate involvement,» he added.
Four of the nine Supreme Court justices present for the State of the Union, including Chief Justice John Roberts, Justice Elena Kagan and Justice Amy Coney Barrett, who had ruled against Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to unilaterally enact his tariffs.
Trump’s comments marked a shift from his more abrasive tone in the immediate aftermath of the tariff decision, when he said the high court was «incompetent» and that the majority should be «absolutely ashamed» of themselves «for not having the courage to do what’s right for our country.»
TRUMP TAKES DIRECT SOTU SWIPE AT DEMOCRATS OVER TAXES: ‘TO HURT THE PEOPLE’
Legal experts and commentators toed a careful line Wednesday in responding to President Donald Trump’s State of the Union address. (Bonnie Cash/UPI/Bloomberg via Getty Images)
Trump’s remarks during the State of the Union were a nod to his new tariffs he invoked under Section 122, or a statute that allows a sitting president to impose sweeping tariffs for up to 150 days in response to either large or serious U.S. «balance-of-payments deficits,» or in response to situations that pose «fundamental international payments problems» for the U.S. Congress can extend them once the 150-day period ends.
But some experts have questioned the legality of using Section 122 to invoke the broad global tariffs — signaling what could be more legal challenges to come.
Gita Gopinath, Harvard economics professor and former senior International Monetary Fund official, noted on social media: «As long as there is plenty of demand for US debt and equities, which is the case, the US does not have a ‘payments’ problem. It can finance its trade deficits easily.»
«The first thing to note is that the statute does not apply to the current US international payments position,» the Peterson Institute’s Kimberly Clausing and Maurice Obstfeld said Monday. «Indeed, the president’s own lawyers argued in the IEEPA case that Section 122 was no substitute for IEEPA, since balance of payment deficits are conceptually distinct from the current account and trade deficits that Trump has characterized as an emergency.»
Separately, Senate Minority Leader Chuck Schumer, D-N.Y., vowed that his caucus would not approve Trump’s bid to extend tariffs beyond the 150-day period.
«We will not extend those tariffs,» Schumer declared, urging Republicans to join Democrats in blocking them.
Schumer linked the tariffs to higher costs of groceries, cars, and homes.
«Americans are suffering, because (Trump) is raising tariffs,» Schumer said.
Trump also used his remarks to tout the significant drop-off in violent crime during his first year back in the White House, reiterating his administration’s claim that the U.S. murder rate dropped to its lowest point in 125 years in 2025.
FROM GRIEF TO GOLD MEDALS, TRUMP’S SOTU GUEST LIST TELLS A BIGGER STORY
President Donald J. Trump delivers the first State of the Union address of his second term to a joint session of Congress. (Kenny Holston /Pool via Reuters)
White House press secretary Karoline Leavitt previously pointed Fox News Digital and other outlets to recent data from the Council on Criminal Justice that she said shows that Trump is «delivering overwhelmingly on his promise» to restore law and order in the U.S.
«A study from the Council on Criminal Justice shows that the murder rate across America’s largest cities plummeted in 2025 to its lowest level since at least 1900,» Leavitt told reporters. «Let me repeat to put this in perspective, this marks the largest single-year drop in murders in recorded history.»
Nationwide homicide data released later in 2026 could show killings in 2025 falling to roughly 4.0 per 100,000 residents – the lowest rate ever recorded in law enforcement or public health data dating back to 1900 and the largest single-year percentage drop on record.
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Reactions to the speech — and Trump’s policies — vary, but the president did win some praise from across the aisle.
«As a voter, I may not like him. I may find his long form exhausting. But when he speaks, he never wavers from American exceptionalism,» Michael Ceraso, a Democratic strategist with a background in speechwriting, told Fox News Digital.
«I see someone protecting our cities against those he deems a threat to democracy, revving up the economy, managing global partners, and defeating terrorism.
Fox News Digital’s Charlie Creitz, Emma Colton and Michael Ruiz contributed to this report.
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Iran’s supreme leader runs ‘state within a state’ through secret 4,000-person network, report says
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FIRST ON FOX: A new report detailing the inner workings of Ayatollah Ali Khamenei’s office says the Islamic Republic’s real command structure lies not in Iran’s visible government, but in a shadow apparatus designed to preserve regime control even if the supreme leader himself disappears from public view.
The report, Unmasking the Bayt: Inside the Supreme Leader’s Office, published by United Against Nuclear Iran (UANI) and authored by Saeid Golkar and Kasra Aarabi, describes the Bayt, the Office of the Supreme Leader, as a vast institutional network embedded across Iran’s military, economy, religious institutions and state bureaucracy.
«It is the hidden nerve center of the regime in Iran… it operates as a state within a state,» Aarabi said in an interview with Fox News Digital.
Iranian Supreme Leader Ali Hosseini Khamenei meets with Islamic Republic of Iran Air Force commanders and Islamic Republic of Iran Air Defense Force officers at the Imam Khomeini Husayniyya in Tehran, Iran on Feb. 05, 2024. ((Photo by Iranian Leader Press Office / Handout /Anadolu via Getty Images))
According to Aarabi, the system allows Khamenei to oversee and influence decision-making at every level of the Islamic Republic, including nuclear policy, war planning and internal security.
«This is what gives Khamenei absolute control. It’s not the visible state, this is the invisible state,» he said.
The report estimates roughly 4,000 people operate inside the Bayt’s core structure, with tens of thousands more working through affiliated institutions across the country.
«There’s around 4,000 close employees… think of them as commissars… the real policymakers,» Aarabi said. «Beyond that, the Bayt’s umbrella has 40,000 individuals working for it… entrenched at every single layer of policy, every single state entity.»
The report maps a tightly controlled inner circle at the top of the Bayt, including Khamenei’s sons, particularly Mojtaba Khamenei, who is described as operating like a «mini-supreme leader» within his father’s office.
It details how the structure reaches directly into Iran’s military chain of command, with senior promotions requiring approval from the Supreme Leader’s office and parallel counterintelligence bodies monitoring loyalty across the armed forces. The Bayt, the report says, also plays a decisive role in nuclear negotiations and wartime decision-making, ensuring ultimate authority remains concentrated around the supreme leader.
The network, Aarabi said, effectively duplicates state ministries inside Khamenei’s office, allowing direct oversight and ideological enforcement across government agencies, universities and cultural institutions.
TRUMP ISSUES STERN IRAN WARNING AS TEHRAN ANGRILY REACTS TO SPEECH AMID MUTED WORLD REACTION
Military members of the Islamic Revolutionary Guard Corps (IRGC) in western Tehran, Iran (Morteza Nikoubazl/NurPhoto via Getty Images)
The report also outlines how the Bayt sustains regime durability through control of the economy, religious institutions and the education system. Networks of foundations and conglomerates tied to the supreme leader oversee major sectors of Iran’s economy, while clerical institutions, universities and cultural bodies are monitored by embedded representatives tasked with enforcing ideological compliance and suppressing dissent.
«Think of the Bayt as the nucleus of the core power of the regime,» Aarabi said.
The findings come amid renewed speculation about Khamenei’s health and reduced public visibility, as well as growing regional tensions and the possibility of military confrontation involving Iran.
Aarabi pushed back on suggestions that Khamenei’s absence from public appearances signals weakening authority or internal fragmentation.
«We saw this during the 12-day war… even if he is hiding in a bunker, he is in full control. The Bayt has been tightening Khamenei’s grip on power,» he said.
The structure, he argued, was deliberately built to function even without the supreme leader physically present.
«Even if he is eliminated, the Bayt as an institution enables the supreme leader to function,» Aarabi said. «Think of the supreme leader as an institution rather than just a single individual.»
The report places the Bayt at the top of Iran’s power hierarchy, above the Islamic Revolutionary Guard Corps and the formal government.
PRESIDENT TRUMP’S IRAN WARNING IS SERIOUS — BUT AMERICANS NEED THE FULL FACTS
Iran’s Supreme Leader, Ayatollah Ali Khamenei pictured sitting next to senior military official in Iran. (Getty Images)
«The Bayt is the core apparatus… the strategic policymaking body that is driving the ballistic missile program, the nuclear program, [and] regional destabilization,» Aarabi said.
The implications, he added, are significant for policymakers in Washington and across the region, particularly as the U.S. weighs options for confronting Iran’s nuclear program and regional activities.
«Eliminating Khamenei in isolation on its own is not enough… you have to dismantle this extensive apparatus that he has created,» Aarabi said.
Instead, any effort to weaken the regime would require targeting the broader institutional structure surrounding the supreme leader, not just the individual at its center.
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Iranian worshippers are praying under a banner featuring a giant portrait of Iran’s Supreme Leader, Ayatollah Ali Khamenei, during a ceremony commemorating assassinated Hamas Leader, Ismail Haniyeh, at the Imam Khomeini Grand Mosque in Tehran, Iran, on August 9, 2024. Ismail Haniyeh was killed in his residency in northern Tehran the day after the inauguration ceremony of Iran’s new president, Masoud Pezeshkian. (Morteza Nikoubazl/NurPhoto via Getty Images)
«It involves a comprehensive strategy… cyber operations, sanctions, [and] a military component,» he said. «For any meaningful change in Iran… you have to go after the core nucleus of power within the Islamic regime, and that is the Bayt.»
He said on reports of Khamenei being a target that, «the elimination of Khamenei alone is not enough… dismantling the extensive apparatus of the Bayt is essential,» he added.
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