On December 18, 2025, First Assistant U.S. Attorney Joseph H. Thompson stood before cameras in Minneapolis and said something that state officials had spent years trying not to say. Providers in 14 state-run Medicaid programs had billed $18 billion since 2018. Half or more of it - exceeding $9 billion - was "possibly fraudulent." [2] He called it "industrial-scale fraud."
Governor Tim Walz disputed the number. He called it "sensationalism." But when heightened oversight began, spending across the 14 programs dropped 29% - $165 million - in a single quarter. [3] The money disappeared because the fraud disappeared. The fraud disappeared because someone was finally watching.
This article is not only about Minnesota. Minnesota is where the investigations started, where the numbers are most staggering, and where the pattern is most documented. But the same dynamic - insular immigrant communities exploiting American welfare systems at industrial scale while politicians look the other way - is now documented in California, Maine, Washington State, and at the federal level. The fraud is not an isolated failure. It is a systemic consequence of immigration policy that resettles large populations from high-corruption countries and never requires them to adopt American institutional norms.
Minnesota: The Epicenter
The $250 Million That Started It All
On September 20, 2022, the Department of Justice announced the largest pandemic fraud case in American history. The scheme was called Feeding Our Future. The mechanism was simple: operators created fake meal sites, claimed to be feeding thousands of children, and billed the federal government for meals that were never served. The money went to luxury cars, real estate in Kenya and Turkey, and overseas wire transfers through the hawala system.
The final numbers: 79 people indicted. More than 50 guilty pleas. Seven found guilty at trial. [1] The ringleader - Aimee Bock, the white founder of the nonprofit - received 28 years in prison in August 2025. Updated fraud estimates now exceed $350 million. [1]
Approximately 89% of defendants are Somali American. Attorney General Merrick Garland called it the country's largest pandemic relief fraud scheme.
Our earlier investigation documented this case in detail. What has emerged since is far worse.
The 14 Programs
Feeding Our Future was one program. The U.S. Attorney's office identified 14 state-run Medicaid programs riddled with fraud. The pattern across all of them is identical: programs designed to help vulnerable populations were exploited by providers who billed for services never rendered, recruited clients who didn't need the services, and operated within a closed community where providers, clients, and interpreters all shared ethnic and linguistic ties - making external detection nearly impossible.
Housing Stabilization Services - Minnesota became the first state to offer Medicaid coverage for housing stabilization in July 2022. The program was budgeted at $2.6 million per year - approximately $12 million over 4.5 years. Actual spending: $302 million over the same period. Twenty-five times the budget. By 2024, annual payments hit $104 million. [8] U.S. Attorney Thompson said most of the $302 million is fraudulent.
The scheme was straightforward. Providers rented apartments to Medicaid recipients and billed the state for housing services they never provided. Providers could bill $100,000 to $200,000 per client per year. Eight defendants were federally charged in September 2025, with five more in December.
The case also produced the term "fraud tourists." Anthony Waddell Jefferson and Lester Brown, both from Philadelphia, heard that Minnesota's housing program was "easy money" and a "good opportunity to make money." They traveled to Minnesota, enrolled companies, returned to Philadelphia, and submitted fraudulent claims remotely. Word had spread that Minnesota's welfare systems were unguarded.
Integrated Community Supports (ICS) - Spending went from $4.6 million in 2021 to $170 million in 2024. A 37x increase in three years. Providers rented apartments to Medicaid recipients and billed for services never provided - the same scheme as housing stabilization, in a different program.
Autism Therapy (EIDBI) - This is perhaps the most disturbing fraud category because it exploits children. Smart Therapy LLC, operated by Asha Farhan Hassan, obtained $14 million from Medicaid between 2019 and 2024. [6] The company recruited children from the Somali community - some of whom were not diagnosed with autism - and paid parents $300 to $1,500 per month in kickbacks to enroll their children. Hassan pleaded guilty to wire fraud in December 2025.
Star Autism Center LLC, operated by 27-year-old Abdinajib Hassan Yussuf, ran the same scheme for $6 million. [7] Workers were often 18 and 19-year-old relatives with no qualifications beyond high school. Children without autism diagnoses were helped to "qualify" for services. The license was revoked in January 2026.
A March 2026 state audit found that the Minnesota Department of Human Services had authority to investigate autism program kickbacks for years but never used it. At least a dozen Feeding Our Future defendants also owned or were associated with autism centers.
Personal Care Assistance (PCA) - MN Professional PCA billed $9.5 million in fraudulent claims - the largest Medicaid fraud case ever charged by the Minnesota Attorney General's Medicaid Fraud Control Unit. [5] The investigation centered, in the AG's own words, "almost entirely within the Minneapolis Somali community." In one PCA fraud trial, the defense argued that "cultural misunderstandings" played a role in the fraud.
The Money Trail
Federal investigators tracked $136 million in bulk cash moving through John Glenn Columbus International Airport in Ohio since November 2023. U.S. citizens of Somali origin carried cash in luggage, flew to Minneapolis or Atlanta. From Minneapolis, couriers traveled to Dubai through Amsterdam.
Total cash from Minneapolis airport: $342 million in 2024 and $349 million in 2025. [10]
Treasury Secretary Scott Bessent confirmed the Treasury Department is investigating whether Minnesota welfare money reached al-Shabaab, the Somali terrorist organization. Al-Shabaab routinely takes a share of hawala transfers regardless of sender intent.
An important caveat: federal investigators have told CBS News there is no direct evidence that taxpayer dollars were specifically funneled to al-Shabaab. Prosecutors have not presented evidence linking individual fraudsters to terrorism. But the sheer volume of cash - hundreds of millions moving through informal transfer systems from a community documented to be engaged in billions of dollars of fraud - raises questions that demand investigation, not dismissal.
The Numbers Behind the Community
The Center for Immigration Studies analyzed American Community Survey data from 2014 to 2023 and found:
- 81% of Somali immigrant households in Minnesota consume some form of welfare
- 89% of Somali households with children receive welfare
- 54% receive food stamps
- 73% have at least one member on Medicaid
- 52% of children in Somali immigrant homes live in poverty
Minnesota's state demographer disputes these figures, noting that only 8% of people with Somali ancestry reported receiving "public assistance income" in the ACS. The discrepancy comes from definitions. CIS measures household-level participation in any major welfare program - Medicaid, SNAP, housing assistance, cash aid. The state demographer uses a narrow definition of "public assistance income" that excludes most benefit categories. Both numbers are technically accurate. The CIS number captures the actual scope of government dependency.
California: The $31 Billion Disaster
California's Employment Development Department admitted it paid as much as $31 billion to fraudsters during the pandemic - four times its initial estimate. [11] Of $114 billion in unemployment benefits disbursed since March 2020, approximately 10% was confirmed fraudulent, with an additional 17% potentially fraudulent. That means up to 27% of all unemployment benefits California paid went to fraud. [11]
In calendar years 2023-2024, estimated improper payments totaled $1.5 billion, with fraudulent payments exceeding $500 million in 2024 alone. Since 2020, nearly 1,800 fraud cases have been opened.
Transnational criminal organizations used the dark web and black-market Social Security numbers to submit fraudulent applications from overseas. The system was so poorly designed that applications could be filed with minimal identity verification, and the state prioritized speed of payment over fraud prevention.
A separate 2024 federal audit found California improperly claimed $52.7 million in federal Medicaid reimbursement for capitation payments made on behalf of noncitizens with unsatisfactory immigration status. [12] The state billed the federal government for healthcare it provided to people who were not eligible for federal reimbursement.
Individual cases tell the story:
- An Azerbaijani national in Sunnyvale submitted over 7,200 fraudulent Medicare claims seeking $137 million through his entity Vonyes, Inc. Beneficiaries were unaware of prescriptions and didn't need the equipment.
- A Southern California ring defrauded Medi-Cal of nearly $60 million through three home health agencies between 2016 and 2022.
- Five defendants were charged for a $10 million scheme defrauding the state's Family Planning, Access, Care and Treatment program using non-existent patients.
California's fraud problem is less ethnically concentrated than Minnesota's but equally systemic. The state's combination of generous benefits, minimal verification, and a massive noncitizen population creates an environment where fraud is not just possible but predictable.
Maine: Minnesota's Pattern Goes East
Maine has the fastest-growing immigrant population in New England, driven largely by Somali and other African refugee resettlement in Lewiston and Portland. And the fraud pattern that defined Minnesota is now emerging there.
Gateway Community Services, founded by Somali refugee Abdullahi Ali, received $28.8 million in MaineCare payments between 2019 and 2024. [13] In December 2025, the Department of Health and Human Services halted MaineCare payments to Gateway, alleging the company overbilled for interpreter services by more than $1 million.
Federal agents probed locations linked to Gateway's CEO, as well as locations connected to State Representative Deqa Dhalac, Representative Yusuf Yusuf, and Maine Immigrant and Refugee Services founder Rilwan Osman.
The interpreter fraud scheme is particularly revealing. Two interpreters targeted newly arrived refugees - largely from Somalia - and brought them to specific healthcare providers. The providers charged MaineCare for interpreter services that were overinflated or never happened, then gave the interpreters a cut. In February 2026, the U.S. Attorney's office charged three people.
A Maine police officer had warned of interpreter fraud five years earlier. The state is just now catching up.
A Maine whistleblower explicitly alleged "Minnesota-like fraud" in the state's Medicaid program. The pattern is identical: Somali-operated providers billing Medicaid for services that don't exist, operating within an insular community where oversight is nearly impossible because providers, clients, and interpreters all share the same language and social network.
Washington State: The Daycare Investigation
The FBI expanded its Minnesota fraud investigation to Washington State, which has one of the largest Somali populations outside Minnesota.
Of 25 home-based daycare providers within a one-mile radius in Federal Way, 12 are Somali-operated and accept multiple state subsidies. Asal Family Daycare in Seattle's Rainier Beach received $690,000 in subsidies in just five months - July through November 2025. [15]
Washington's Department of Children, Youth and Families identified 1,372 overpayments totaling $2.1 million from July 2024 to June 2025. No formal fraud charges have been filed yet, but the investigation is ongoing with federal involvement.
In December 2025, after a viral video alleged fraud at Somali-American child care centers in Minnesota, the Trump administration froze all federal childcare payments to Minnesota. FBI Director Kash Patel expanded the investigation nationwide. The Office of Inspector General conducted compliance checks at nine centers referenced in the video and found they were "operating as expected" - though broader investigations continue.
The Federal Picture
The national scope of immigration-linked fraud extends beyond individual states.
Operation Gold Rush
In 2025, the DOJ announced the largest healthcare fraud takedown in history: 324 defendants charged across 50 federal districts. Over $14.6 billion in intended losses. The government seized $245 million in cash, luxury vehicles, and cryptocurrency. [16]
The largest single scheme - Operation Gold Rush - involved a transnational criminal organization based in Russia that used foreign straw owners to buy dozens of U.S. medical supply companies. They submitted $10.6 billion in fraudulent claims using over one million stolen American identities. Medicare paid out approximately $900 million before the scheme was detected. [16] Four defendants were apprehended in Estonia.
The DOJ explicitly stated it is focused on "fraud schemes perpetrated by foreign actors that exploit U.S. health care programs."
COVID-era Fraud by Foreign Nationals
The pattern of foreign nationals exploiting American relief programs during COVID is documented across dozens of cases:
- Ikponmwosa Erhinmwinrose, a Nigerian national in Atlanta, stole $7.6 million from PPP, EIDL, and state unemployment programs.
- Yomi Jones Olayeye, a Nigerian national, was arrested at JFK Airport upon arrival from Nigeria, charged with conspiring to fraudulently obtain $10 million in COVID unemployment benefits from Massachusetts.
- Fatiu Ismaila Lawal, a Nigerian national residing in Canada, defrauded pandemic aid programs of more than $1 million. Extradited from Canada, sentenced to 54 months.
The DOJ's COVID-19 Fraud Enforcement Task Force has charged more than 3,500 defendants and recovered more than $1.4 billion.
Immigration Benefit Fraud
A December 2025 GAO report found that from May 2022 through September 2024, 774,000 noncitizens were granted parole across three humanitarian processes. [17] USCIS analysis of 2.6 million supporter applications found fraud indicators were "widespread" - including supporter information belonging to deceased individuals, thousands of applications with fictitious supporter information, over 1,400 applicants listing deceased U.S. citizens as sponsors, and at least one application using Elvis Presley's Social Security number.
Why This Happens
Corruption Is Cultural
Somalia ranks 179th out of 180 countries on Transparency International's 2024 Corruption Perceptions Index, scoring 9 out of 100. [19] It has held the lowest or near-lowest position for 13 consecutive years. It is, by any objective measure, the most corrupt nation on earth.
This is not a racial observation. It is an institutional one. In countries where every government interaction involves bribes, where public funds are routinely stolen, where there is no functioning rule of law - people develop survival strategies built around exploiting systems. These strategies do not disappear at the border. They are cultural practices, learned over generations, and they transfer directly to the American welfare state.
When the United States resettles tens of thousands of people from Somalia into concentrated communities in Minneapolis, gives them access to dozens of welfare programs with minimal oversight, and never requires them to adopt American institutional norms - the result is predictable. Not because Somalis are inherently criminal, but because the cultural toolkit they arrive with includes practices that are illegal in the United States and were normal in Somalia.
The "cultural misunderstandings" defense raised in Minnesota PCA fraud trials is revealing. It is an implicit admission that the defendants operated according to norms from their country of origin rather than American law.
Insular Communities Block Oversight
Every major fraud case in this article shares a structural feature: the fraud operated within a closed ethnic and linguistic community. Providers, clients, interpreters, and employees all shared the same background. External auditors could not easily verify services because they didn't speak the language. Clients were recruited through community networks. Employees were often relatives.
This is the direct consequence of concentrated resettlement without assimilation. When 107,000 Somalis live in the Twin Cities metro area, they form a community large enough to be economically self-contained. Services are provided in Somali. Business is conducted in Somali. When fraud occurs, it occurs in Somali - and the state agencies responsible for oversight don't speak Somali.
The interpreter fraud cases in Maine make this point directly. The interpreters themselves became the fraud vector - steering vulnerable refugees to specific providers, then billing for phantom services. The system designed to help non-English speakers access healthcare became the mechanism for stealing from it.
Politicians Who Benefit Have No Incentive to Investigate
Minnesota's Department of Human Services had authority to investigate autism program kickbacks for years and never used it. A Maine police officer warned about interpreter fraud five years before the state acted. The Minnesota AG's investigation into PCA fraud took place "almost entirely within the Minneapolis Somali community" - but officials were reluctant to say so publicly.
The reason is electoral. Governor Tim Walz, Minneapolis Mayor Jacob Frey, and Representative Ilhan Omar all depend on the Somali vote in Minnesota. The Somali community in the Twin Cities is a reliable Democratic voting bloc. Aggressive fraud investigations in that community risk alienating voters these politicians need. The calculus is straightforward: investigating fraud costs votes. Ignoring fraud costs taxpayer money. Politicians who depend on the immigrant vote consistently choose to protect the vote.
This is not unique to Minnesota. In California, Governor Gavin Newsom presided over $31 billion in EDD fraud losses and faced no political consequence. California's immigrant communities vote overwhelmingly Democratic. The political incentive to investigate fraud in those communities is zero. In Maine, the Somali community in Lewiston has become a significant voting bloc. In Washington State, the same pattern holds. The politicians who represent high-immigration districts benefit electorally from those communities and have no incentive to scrutinize how welfare dollars flow within them.
The pattern across every state is identical: immigrant communities that vote as a bloc create a political shield around the fraud occurring within them. Officials who investigate risk being called racist and losing elections. Officials who look the other way keep the peace and keep their seats. For years, Minnesota chose the second option. The price was $9 billion.
House Oversight Chairman James Comer has launched a congressional investigation. But the structural incentives have not changed. As long as politicians depend on ethnic bloc votes - the dynamic documented in our elections analysis - they will continue to have powerful reasons not to investigate fraud within those communities.
The Counterpoint
The Cato Institute analyzed federal conviction data and found that in 2024, noncitizens accounted for 6.7% of benefits fraud offenders and 6.6% of benefits lost to theft - while comprising 7.2% of the population. [20] By this measure, noncitizens are slightly underrepresented in federal fraud convictions.
This data point is real and should be acknowledged. But it has two critical limitations. First, it counts only federal convictions - and the vast majority of the Minnesota, Maine, and Washington cases are prosecuted at the state level or are still under investigation. The Feeding Our Future case alone - 79 indictments, mostly Somali defendants - represents more defendants than Cato's entire 2024 national count of 63 noncitizen fraud offenders.
Second, the aggregate national number conceals the concentration problem. Immigration-linked fraud is not evenly distributed. It is concentrated in specific communities, in specific states, exploiting specific programs. The fact that the national per-capita rate is roughly proportional does not change the reality that Minnesota faces $9 billion in fraud overwhelmingly linked to one community.
The Policy Failure
The fraud documented in this article is not a failure of law enforcement. The FBI, DOJ, and state attorneys general are prosecuting cases aggressively. It is a failure of immigration policy.
The United States resettled tens of thousands of Somali refugees into concentrated communities in Minnesota, Maine, and Washington without requiring English proficiency, without dispersing populations to prevent enclave formation, and without any mechanism to ensure that arrivals from the world's most corrupt country adopted American institutional norms.
The result was predictable: parallel communities that operate by different rules, exploit systems designed for people who play by American rules, and are shielded from accountability by language barriers, community insularity, and political correctness.
The solutions are the same ones the Center for Assimilation advocates across every issue:
- Geographic dispersal - End the concentrated resettlement that creates insular communities large enough to sustain parallel institutions
- English proficiency requirements - Require functional English before granting permanent residency, so all residents can interact with American institutions directly
- Reduced numbers - Process fewer refugees at a pace that allows genuine integration rather than enclave formation
- Cultural assimilation standards - Require demonstrated understanding of American legal and institutional norms as a condition of permanent residency
- Real oversight - Staff fraud detection units with bilingual investigators and eliminate the political taboo against investigating fraud in immigrant communities
The $9 billion question in Minnesota is not whether the fraud happened. The question is how a state could lose $9 billion before anyone was willing to say what was happening and why.
Sources
- U.S. Attorney's Office, District of Minnesota, Feeding Our Future Press Releases
- Minnesota Reformer, "U.S. Attorney: Fraud Likely Exceeds $9 Billion in Minnesota-Run Medicaid Services," December 2025
- CBS News, "What to Know About Minnesota's Fraud Scandal," 2025
- IRS Criminal Investigation, Feeding Our Future Sentencing Press Releases, 2024-2025
- Minnesota Attorney General's Office, MN Professional PCA Fraud Charges, August 2023
- Minnesota Legislative Auditor, DHS Autism Program Oversight Audit, March 2026
- KNSI Radio, "St. Cloud Autism Center Owner Pleads Guilty to $6 Million Medicaid Fraud Scheme," March 2026
- DOJ, Housing Stabilization Services Fraud Charges, September 2025
- CBS News, "Minnesota Fraud Tourists Indictments," 2025
- City Journal, "Minnesota Welfare Fraud, Somalia, and al-Shabaab," 2025
- California State Auditor, EDD Fraud and Improper Payments Report, 2025
- HHS Office of Inspector General, "California Improperly Claimed $52.7 Million in Federal Medicaid Reimbursement for Noncitizens," 2024
- The Maine Wire, "Feds Probe Locations Linked to Alleged Somali Medicaid Fraud in Lewiston," December 2025
- Bangor Daily News, "A Maine Cop Warned of Interpreter Fraud 5 Years Ago," December 2025
- KOMO News, "Washington State Child Care Subsidies Under Audit Amid Fraud Allegations," 2025
- DOJ, "National Health Care Fraud Takedown Results in 324 Defendants Charged," 2025
- GAO, "U.S. Citizenship and Immigration Services: Implementing GAO's Recommendations Would Help Manage Fraud Risks," December 2025
- Center for Immigration Studies, "Somali Immigrants in Minnesota," Welfare Usage Data
- Transparency International, Corruption Perceptions Index 2024, Somalia
- Cato Institute, "Noncitizens Were Underrepresented in Welfare Fraud Convictions, 2024"
- Heritage Foundation, "Somali Welfare Fraud in Minnesota Has Cost American Taxpayers Billions"
- Imprimis / Hillsdale College, "Learning from Minnesota's Somali Fraud Scandal"