Tim Walz’s administration enabled over $1 billion in taxpayer fraud to flow through Minnesota’s social programs while officials feared being labeled racist for stopping the theft.
Story Highlights
- Federal prosecutors convicted 59 people for stealing over $1 billion from Minnesota social programs under Walz’s watch.
- Democrat officials allowed fraud to continue after being threatened with racism lawsuits by nonprofit groups.
- President Trump calls Minnesota a “hub of fraudulent money laundering activity” and targets the immigration status of perpetrators.
- Three major schemes targeted child feeding programs, homeless assistance, and autism therapy services.
Walz Administration’s Billion-Dollar Failure
Minnesota taxpayers lost more than $1 billion to fraudulent social service schemes during Tim Walz’s governorship, and federal prosecutors convicted 59 individuals in three major plots.
The stolen amount exceeds Minnesota’s entire annual Department of Corrections budget.
Federal prosecutor Joseph Thompson warned that continued fraud threatens the state’s way of life, stating, “No one will support these programs if they continue to be riddled with fraud.” This represents one of the most significant state-level fraud scandals in recent American history.
A damning quote on Tim Walz’s failure to stop the fraud consuming Minnesota.
"No one was doing anything about the red flags," he said. "It was like someone was stealing money from the cookie jar and they kept refilling it."
WOW. pic.twitter.com/jRLvSZ9HVa
— Dustin Grage (@GrageDustin) November 29, 2025
Political Correctness Enabled Criminal Enterprise
State officials continued funding fraudulent operations after being threatened with racism accusations and negative media coverage.
The nonprofit Feeding Our Future warned Minnesota Department of Education officials that denying applications from “minority-owned businesses” would result in racism lawsuits “sprawled across the news.”
Minnesota’s Legislative Auditor confirmed that threats of litigation and negative press directly influenced how state officials exercised regulatory oversight. Federal prosecutor Thompson identified race sensitivities as “a huge part of the problem,” noting that racism allegations can be “reputation or career killers.”
Fake Services, Real Luxury Purchases
Fraudsters created elaborate schemes billing millions for nonexistent services across multiple programs.
The child feeding program reimbursed claims for tens of thousands of meals that were never served, with perpetrators spending funds on luxury cars, houses, and overseas real estate.
A homeless assistance program ballooned from a $2.6 million budget projection to over $104 million annually, with hundreds of providers claiming reimbursement for services never rendered.
The autism therapy scheme involved recruiting children, falsely certifying them for treatment, and paying parents kickbacks for cooperation.
Red Flags Ignored, Fraud Flourished
State agencies ignored obvious warning signs while continuing to approve new feeding sites and process suspicious invoices. Defense attorney Ryan Pacyga, representing multiple defendants, said perpetrators became convinced that “state agencies were tolerating, if not tacitly allowing, the fraud.”
He described the situation as “someone stealing money from the cookie jar and they kept refilling it.” Minnesota Department of Education officials raised early concerns about the plausibility of invoices but continued processing payments after facing legal threats and accusations of discrimination.
Trump Takes Action as Republicans Mobilize
President Trump denounced Minnesota as a “hub of fraudulent money laundering activity” and ended temporary legal status allowing hundreds of Somali immigrants to live and work in the United States.
Republican House Speaker Lisa Demuth launched her gubernatorial campaign by accusing Walz of raising taxes while letting “fraud run wild.”
The scandal provides Republicans with a powerful attack line as they seek to reclaim the governor’s office in 2026. Trump’s decisive action contrasts sharply with Walz’s reactive approach of creating task forces and implementing safeguards only after billions were already stolen.
